Wheels Up Founder Kenny Dichter Steps Down as CEO

Some 10 years after founding private flight provider Wheels Up, Kenny Dichter is stepping down as the financially-challenged group’s CEO, the company announced early today. While Dichter will retain a seat on the board of directors, CFO Todd Smith is taking over as interim CEO and current board member Ravi Thakran is now executive chairman.

Last month, Wheels Up posted an overdue 2022 annual report through a 10-K filing with the Securities and Exchange Commission that showed a $555 million loss on revenues of $1.58 billion. The New York Stock Exchange-listed company's shares were trading at 49 cents at market close on Monday, having declined in value by around 94 percent since it went public in July 2021.

“The changes we are making position Wheels Up to deliver attractive returns and profitability for shareholders and amazing experience for members,” commented Smith, who joined Wheels Up in 2022 from General Electric.

Thakran added, “I’d like to thank our founder, Kenny Dichter, for his vision and work to make Wheels Up what it is today—the leading on-demand charter operator in the U.S. with more than $1.5 billion in revenue, more than 12,000 members and customers, and an iconic brand. I look forward to building on this foundation as we embark on the next phase for the company and its stakeholders.”

Berkshire’s NetJets, FlightSafety Soar in First Quarter

First-quarter revenues at aircraft fractional provider NetJets and aviation simulation training company FlightSafety International (FSI) climbed 18.8 percent year-over-year, said parent company Berkshire Hathaway in its latest investor update. The higher revenues these companies reported were “primarily due to increases in the number of aircraft in shared aircraft ownership programs and in flight hours across NetJets’ various programs, as well as higher average rates,” Berkshire noted in its first-quarter financial report.

Berkshire’s services group—which besides NetJets and FSI includes electronics components company TTI and Dairy Queen, among others—reported a 17.6 percent rise in first-quarter revenues, to $5.319 billion, compared with the same period a year ago. While Berkshire doesn’t specify revenues of each of its services subsidiary companies, it implied that slightly more than half of the $796 million increase was attributable to NetJets and, to some extent, FlightSafety.

Pre-tax first-quarter earnings at the parent company’s services group was $837 million, up $113 million from last year. “The earnings increase was primarily attributable to higher overall margin rates in aviation services businesses, primarily due to changes in business mix,” Berkshire said.

Boeing Business Jets Names New President

Boeing elevated Joe Benson to president of VIP jet division Boeing Business Jets, the company announced yesterday. He succeeds Erika Pearson, who was recently named v-p of Boeing Commercial Airplanes sales and marketing in Southeast Asia and Oceania.

Benson joined Boeing in 2010 and has held leadership, strategic business development, and sales and marketing roles across the company. Most recently, he served as Boeing Business Jets deputy to the president and business director. In his new role, Benson will oversee sales, support, and operations for Boeing Commercial Airplanes’ portfolio of business jets operated by heads of state, VIP, corporate, and charter customers.

“I am honored to lead [Boeing Business Jets] and continue our decades-long history of building the most capable and reliable business jets on the market,” Benson said. “As we look to the horizon, we are well positioned to meet the strong business aviation demand by providing our customers with an unrivaled travel experience and best-in-class economics.”

Boeing Business Jets was founded in 1996 and has sold more than 260 bizliners, including the BBJ Max, BBJ 787, and BBJ 777X. The jets can be uniquely customized for private, business, or governmental use.

Kern Urges ‘Thinking Differently’ about Aviation Safety

In his keynote presentation this morning at the Business Aviation Safety Summit (BASS) in New Orleans, Convergent Performance CEO Tony Kern argued that more recent social and business aviation industry changes have created a need for rethinking safety approaches and programs. “We are in an unprecedented time, and we cannot use old modes of thinking,” he said, pointing to a generational hand-off, life-work balance pressures, and staffing shortages as among the factors behind shifts affecting safety.

Kern provided attendees at BASS, which is co-organized by NBAA and the Flight Safety Foundation, with guidelines for “learning to think differently,” starting with developing a beginner’s mind—or “Shoshin” in Zen Buddhism. “Experience tends to blind us to changes and new threats,” he said, as those regarded as knowledgeable “go back to what’s worked in the past—the ‘experts curse.’”

According to Kern, safety management systems and other safety programs should be built on a foundation of empathy and compassion, rather than regulatory compliance.

Going forward, he said professionals must also “assume less, verify more,” and “communicate more and communicate better—not just with people, but with machines.” Kern noted that as a result of these changes, psychological issues are having a greater impact on safety, and he urged the industry to “address mental health challenges, absolutely, positively head on.”

Wilson Air Center – Houston Debuts Newly Renovated Terminal

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Amstat: Preowned Aircraft Sales Pace Slows

In its latest business aircraft preowned market update, industry data provider Amstat noted a relative slowdown in resale transaction activity. Despite this, the company said sales activity is more brisk in many aircraft segments than in pre-pandemic years.

According to the report, there is still a lower percentage of the active fleet available for resale than historical averages, but preowned inventory saw significant increases year-over-year. Inventory build-up was led by light jets, which is now at 5.4 percent of the in-service fleet, and large-cabin jets at 5.3 percent.

For super-midsize jets, the 5.1 percent market availability represents a 151 percent increase from a year ago. Large-cabin jets were next, with a 94.3 percent rise over last May’s inventory. The turboprop segment saw the lowest surge in inventory with a 16.6 percent inventory climb. All segments saw a rise in median resale values, with super-midsize jets leading with a 31 percent increase.

In terms of asking prices, Amstat’s analysts observed continued high expectations from sellers, with midsize jets experiencing a 72 percent price increase from a year ago. “Seller expectations remain high with the average asking price of preowned medium jets continuing to rise despite weakening demand and an increase in preowned supply,” the report said.

Bankruptcy Commissioners Seek More Bids For Piaggio

Officials handling the long-running bankruptcy proceedings for Piaggio Aerospace are making yet another attempt to find a buyer for the Italian aircraft manufacturer. Tomorrow, the “extraordinary receivership governing body” will publish details of the latest bidding process in selected Italian and international newspapers, as well as on its own website.

Prospective bidders for Piaggio’s assets will have until June 12 to submit the required documentation. Once this deadline passes, eligible applicants, which could include approved foreign interests, will be given 30 days to conduct due diligence on the company data before having to make binding offers.

This week, Adolfo Urso, Italy’s minister of industry, extended the deadline to complete the sale process by 12 months so that it will run through May 13, 2024. Three new commissioners have been appointed to the extraordinary receivership governing body, namely Carmelo Cosentino, Davide Rossetti, and Vincenzo Nicastro. The government-backed sale process has had several false starts since it was started in November 2019, having most recently failed to close a deal in 2022.

According to the receivers, Piaggio Aerospace has a backlog of orders worth around €556 million ($609 million). The Genoa-based company produces the Avanti Evo twin-pusher business turboprop, as well as a multirole patrol aircraft and uncrewed air systems for defense customers. It is also involved in aircraft engine manufacturing under licenses from several international OEMs.

Union Coalition Blasts JSX as Model for SkyWest Charters

Scheduled Part 135 charter operator JSX has become the target of an alliance of pilot and transport worker unions bent on stopping regional airline SkyWest from establishing its own Part 135 operation. In a letter to Transportation Secretary Pete Buttigieg, the AFL-CIO’s Transportation Trades Department (TTD) charged SkyWest with attempting to skirt Part 121 pilot flight time and retirement age requirements as part of a plan that it says mirrors JSX’s business model. TTD calls that business model “an end run” around the FAA’s effort to hold scheduled Part 135 carriers to “one level of safety.”

The FAA’s alternative Essential Air Service (EAS) program allows charter flights where the agency deems regularly scheduled service under the long-established EAS program infeasible. “It is quite another proposition, however, to run a massive number of regularly scheduled operations in the same markets already well served by airlines, using lower safety and security standards as a competitive advantage,” read the letter. According to TTD, JSX operated 56,326 flights last year.

JSX flights depart from FBO facilities and use the TSA’s Secure Flight pre-screening program, which allows passengers to bypass “invasive” security screening at airport terminals. “JSX’s evasion of these standards has inspired others to attempt a similar model, degrading the safety and security of air travel while also distorting competition, increasing aviation emissions, and worsening airspace congestion,” said TTD.

Vertical Vx4 eVTOL Certification Pushed To Late 2026

Vertical Aerospace expects it will need at least an additional 12 months to certify its VX-4 eVTOL. In a letter to shareholders marking the end of the first quarter, the UK-based public company said a review of the program timeline has resulted in a decision by the management team to target certification by late 2026. Vertical previously indicated the four-passenger vehicle could be approved in 2025.

The letter summarized ongoing work with air safety regulators in the UK, Europe, the U.S., and Japan, indicating that gaps in regulatory requirements partly explain the need to take more time. “While we apply both new and already-proven technology to these novel aircraft, we do not have a rulebook to follow that sets the highest standards of safety­—the same as large-transport-category airplanes,” they stated. “We believe this is necessary to win the trust of passengers.”

As of March 31, the company had cash reserves totaling £104 million ($131 million), which is markedly less than several other frontrunners in the race to bring an eVTOL to market. It also reported a £23 million operating loss in the quarter. Vertical said its current funding is sufficient to “achieve our goals throughout 2023 and 2024,” though it conceded that a further round of fundraising will be started this year.