Wheels Up, eh?

Kenny Dichter’s energy fills the Skyservice lobby. He paces back and forth, a cell phone glued to each ear, as he carries on two conversations at once. On the one hand, he’s got his sister wishing him a happy birthday. On the other, he’s about to make a sales pitch to a customer. He’s been in Toronto but a few moments, having just flown in from New York in the brand new Beechcraft King Air 350i sitting out on the ramp. The turboprop is pristine, sporting a sharp blue on white paint scheme. You can’t miss the word “UP” on the tail. 

Dichter has come north to promote his latest venture, the membership-based private aviation company, Wheels Up. The lifelong entrepreneur became an industry name when he founded Marquis Jet in 2001, launching the first-ever fractional jet card program. After generating more than US$4 billion in revenue, the company was purchased by Warren Buffet’s NetJets in 2010. Since then, he’s worked with NetJets and later dabbled in a number of other ventures, including developing the “ultra-premium” spirit Tequila Avion; investing in New York-based organic raw food and juice company, Juice Press; and lending his expertise to SportYapper, a global communications platform for talking sports, among other pursuits.

Dichter has been called a visionary – someone with a bang-on interpretation of current market trends and the ability to predict what consumers will want next. When it comes to Wheels Up, he’s convinced they want the “further democratization” of private aviation. 

Wheels Up was established on Aug. 1, 2013, appearing on industry radar when it announced a record-breaking order for 105 King Air 350i aircraft. The company immediately began selling memberships, taking delivery of nine King Airs by the end of 2013, and logging its first member flight in November. Eighteen additional aircraft are expected to arrive this year, with the same number scheduled for 2015. They are being operated for Wheels Up by Connecticut-based Gama Charters. 

The premise behind Wheels Up is simple: expand the base of the private aviation “pyramid” to allow even more people to experience the benefits. 

“We were very close to what the marketplace wanted [at NetJets],” Dichter told Canadian Skies when he visited Toronto on Jan. 16. “That experience told me as an entrepreneur that there was another brick to add to the pyramid, one that would further democratize private flying. And that brick fits in between the charter and jet card markets – it delivers all of the safety, security, and verification that come with the fractional and card programs, but with less of a commitment.”

Wheels Up members pay a one-time initiation fee of US$15,750, which includes their first year’s dues (each subsequent year’s dues will cost US$7,250). For that, they get access to the company’s closed fleet of aircraft, all professionally managed, maintained and crewed. Members pay only for time flown, at a rate of US$3,950 per hour. 

“That includes wheels up to wheels down occupied hours,” explained Dichter. “So if you want to fly Toronto to New York, or Boston, all we’re charging for is the actual physical time in the air. It would be the occupied time only – a flat fee, all inclusive price from wheels up to wheels down. You don’t have to pay to reposition the aircraft, either.”

Members don’t need to commit to fly a block of hours, although block packages will be sold. “Think of it like cable,” said Dichter. “You can buy basic cable, or you can buy this package, or that package with an upgrade.”

Members will be able to book their flight time through a custom app, which will allow them to reserve a private flight, or offer various options for sharing the trip with other members. 

Wheels Up is betting that its lower-cost entry fee – “less than some country club dues” – will attract a whole new private aviation customer base. So far, the company has signed up more than 200 members in total; by the end of 2014, the membership target is 1,400. Of those, Dichter and his team expect about 100 to be from Canada.

On Jan. 13, Wheels Up announced it had selected Skyservice as its exclusive Canadian sales agent. With fixed base operations in Toronto, Montreal and Calgary, the company is another on the list of “exceptional partners” that Dichter said will deliver only the highest level of service to Wheels Up members. 

For now, Canadian clients are being served on trans-border routes to the U.S. only. That’s because Wheels Up doesn’t have any Canadian-registered King Airs right now, preventing domestic flights. The plan is to have some based in this country by year’s end, depending on demand. According to Marshall Myles, president and CEO of Skyservice, the Wheels Up product offerings will “fill a void in the marketplace.”

Rod Williams, who has 25 years of business aviation experience with Bombardier Aerospace, is the chief marketing officer and president of the Wheels Up Canadian operation. He too is enthusiastic about the company’s potential north of the border.

“We think Canada’s going to be a great market for Wheels Up. The King Air 350i is perfect for trans-border flights,” commented Williams. “Small private jets are used inefficiently today – you’re much better off with an efficient and comfortable turbo-prop like the King Air for a one-hour flight. The time difference between the two is negligible, and you’re saving 40 per cent in costs.”

Williams told Canadian Skies it’s the same story with a regional jet versus a turboprop airliner – and that’s why Bombardier’s Q400 has enjoyed such global success.  

He’s also confident that Canadians will respond positively to the Wheels Up business model. “For a relatively low entry point, you get all the benefits of flying privately: high levels of security and safety, access to a closed fleet, and guaranteed availability with 24 hours’ notice.”

The King Air 350i is expected to be particularly useful in Canada, where many regional airports have shorter runways. And, said Williams, the aircraft “fits with the Canadian culture – it’s a relatively conservative way to fly privately. It’s very efficient; it makes sense.”

When it comes to customer care, Dichter said the Wheels Up vision is clear. “We want to emulate what Issy Sharp created with the Four Seasons brand,” he said. “We want that kind of halo around our membership all year round.”

In fact, the Wheels Up customer experience might originate on the airport ramp, but it goes far beyond transportation from A to B. Dichter’s exclusive “Wheels Down” lifestyle and events service will offer some unforgettable members-only programming, usually centred around travel and entertainment packages at big events such as the Super Bowl, the Academy Awards, or the Toronto International Film Festival. 

Dichter finishes with a final thought before his cell phone begins to ring once again: “We have what we call an ‘8760 culture’ – representing the number of hours in a year. We aspire to recognize and cater to our members’ needs in every hour, of every day, all year long.”