Private jet firm takes off
Flying on a private jet is an uncommon experience for the average traveler. But a new locally owned business called Wheels Up has made it more accessible, and some of its clients say it is a worthwhile investment in time management, convenience, and personal service.
Founded by Bill Allard of Cohasset and his longtime business partner, Kenny Dichter of New York, Wheels Up offers club memberships for private air travel. Only six months old, it has already had an effect on an industry with which the owners are very familiar: Dichter founded Marquis Jet Partners, and Allard was chairman and chief executive officer of the company until NetJets, a Berkshire Hathaway Inc. subsidiary, bought it two years ago.
Last year the duo joined forces again with Wheels Up. Allard said they were “noodling around with private aviation,” but wanted to go with a different model and created the membership concept.
The idea has caught the eye of Boston Red Sox ownership, which recently signed a multiyear contract with Wheels Up to be the new sponsor of Fenway Park’s premium seat holders’ clubhouse. Previously called the Absolut Club, the left-field Clubhouse will become known as the Wheels Up Club, giving the company access to host client dinners and events. The Red Sox organization also bought a Wheels Up corporate card to use for its executives and personnel.
“Its a multi-faceted partnership that we’re very excited about,” said Allard.
Investors apparently have taken to Wheels Up’s membership concept as well. The founders set a goal to raise $55 million, but hundreds of investors later, they closed at $68 million, with individual investments ranging from $100,000 to $2.5 million.
“We didn’t want to be a ‘me too’ charter service,” said Allard, who led the sales growth of Marquis to $500 million in just five years. “We knew there was a better way to offer private air travel with superior personal service, flexibility, and the highest safety standards possible, and fill a new niche in the private jet service industry.”
Flying locally in and out of Logan International Airport, Hanscom Field, Norwood Memorial Airport, and Plymouth Municipal Airport, Wheels Up has signed about 250 members since August 2013. Allard likened it to a golf club membership. Members pay a one-time fee of $15,700, and $7,250 annually. For each hour of travel on a Beechcraft King Air 350i, members pay a flat $3,950, including fuel and in-flight food and beverage service. Larger jets for longer distances and international travel have higher hourly rates.
“There are no hidden costs,” said Allard.
Benefits include the aviation experience and commitment to safety, a “Wheels Down” membership perks program, and new technology for making reservations, said Allard. The company is launching an app that will enable members to reserve flights more quickly, and through the flight-share technology it can invite other members who may be traveling the same route onto their flight, reducing the cost for travel.
Headquartered in New York with a local office in Norwell as well as Florida and California, Wheels Up employs 45 people, plus the services of about 40 pilots.
The company has an exclusive deal with Beechcraft to buy more than 100 eight-seat King Air 350i prop-jets exceeding $1 billion in value, and a partnership with VistaJet gives it access to larger planes operated by General Dynamics’ Jet Aviation subsidiary. The partnerships, said Allard, as well as hiring pilots through a contract training program, give the club complete control over safety because of how it is able to monitor it.
“Pilots are required to receive simulator training twice a year at Flight Safety International, an aviation training company with 40 centers across the globe. We continuously monitor the safety management systems of the operator to ensure adherence to those standards,” said Allard.
Providing top-notch service is also of utmost importance to Wheels Up, he said.
Mike Milner, a Harvard Business School graduate who lives in Knoxville, Tenn., recently found out just how far the company would go for its members. Milner’s daughter was flying from Atlanta to visit him after he had lung surgery, but the ice storm that paralyzed the city in January grounded her commercial flight. Milner, a new member, scheduled a jet for her, but Hartsfield-Jackson Atlanta International Airport closed before Wheels Up could land. It rerouted to a nearby airport, and Milner’s daughter was able to safely fly to Tennessee.
“I think without Wheels Up she might still be in Atlanta,” said Milner.
Wheels Down is part of what makes the service unique, said Allard, giving members access to invitation-only events, business connections, sports, and entertainment at no additional cost. Wheels Up hosted 1,000 members and investors and their families at a Super Bowl party in New York, featuring celebrities and athletes. It will also host events at the Masters golf tournament in Augusta, Ga., in April, the 2015 Sundance Film Festival, and other venues. Other perks include merchandise worth up to $10,000 from business partners, as well as Wheels Up gear.
Timothy Pinch, a senior partner at financial advisory company GW & Wade, said he became an investor and a member of Wheels Up because of the founders’ success at Marquis, and the “tremendous amount of flexibility” Wheels Up offers.
“It takes away the hassle of commercial flying, the security lines, and layovers,” said Pinch, a Hingham resident. “I can travel from Boston to Hilton Head with my family for the same price per hour whether there are two or eight of us, and it saves me about four hours travel time. With a wedding in September and in-laws with health issues that make it difficult to fly commercial, using Wheels Up to get them to the wedding will work out perfectly.”
With much of the sales and business development being led from the South Shore, the membership roster includes a number of local people as well as celebrities like restaurateur Ming Tsai, former Red Sox pitcher Tim Wakefield, and former Joint Chiefs of Staff chairman Admiral Mike Mullen.
National Financial Partners managing director John Thorbahn of Duxbury said Wheels Up helps company chief executives “do more with less as dictated by the economic downturn in 2008.” Thorbahn, a member and investor, said Wheels Up travel is more economical than standard charter service and saves time, allowing a chief executive to create more revenue by selling his business across the country.
Allard said the club feels “a deep obligation to succeed.”
“Kenny and I have done this before,” he said. “We treat our people well, we think about our members and investors, and we treat our employees well. Our brand is a promise, and it’s our job to exceed that promise.”