Delta Air Lines is spinning off Delta Private Jets through a deal with private aviation membership company Wheels Up.
As part of the agreement announced Thursday, Atlanta-based Delta will be an equity holder in Wheels Up, a privately-held company based in New York. The companies did not disclose terms of the transaction.
Delta Private Jets is a subsidiary based at Cincinnati's airport, and it's the only private jet charter company affiliated with a major commercial airline.
On its website, Delta Private Jets says: "As a wholly owned subsidiary of Delta Air Lines, Delta Private Jets is a transparent and financially stable company."
But, Delta CEO Ed Bastian said in an interview with The Atlanta Journal-Constitution, “Delta Private Jets has suffered under, you know, big Delta... given that that’s not our principal business line.”
A website called privatejetcardcomparisons.com in a summary of Delta Private Jets says it's surprising how many "aren't familiar with Delta Private Jets, didn't know they sell jet cards or had some other misperception. It could be that while it's an asset to trade on such a powerful brand as Delta, it also makes it harder to make a name for yourself and stand apart from the mother ship."
Bastian said combining Delta Private Jets with a private aviation charter management team focused on that industry “gets more focus and better allocation of resources.” He said Wheels Up’s technology platform can also bring in more customers.
“We think consolidation in this space makes a difference,” Bastian said.
The companies say the deal will “create one of the world’s largest owned and managed fleets of private aircraft” with more than 190 private aircraft and more than 8,000 members and customers.
Delta Private Jets started out in 1984 as Comair Jet Express. Delta acquired Comair Holdings, which was based at the Cincinnati/Northern Kentucky International Airport, and changed the name of the private aviation operation to Delta AirElite. Then in 2010 Delta AirElite acquired Segrave Aviation and changed its name to Delta Private Jets.
With the new deal expected to close early next year, the combined company will operate under the name Wheels Up and will continue to be led by Wheels Up founder and CEO Kenny Dichter. Bastian said Delta “will be active equity owners in the company and we’ll be on the board.”
Wheels Up says it “is committed to providing career opportunities for Delta Private Jet employees.”
