Wheels Up Experience Inc. Q3 FY2023 earnings call

• George Mattson aims to position Wheels Up as the best run global private aviation company, leveraging partnership with Delta and Air Partner for customer choice in travel modes. • Launched new up for business corporate program focused on Delta's SME customers, with 150 new prospects in first six business days. • Shifted focus from growth to performance, fleet optimization, and reliability, regionalizing programmatic flying in primary service areas for cost advantage and better member pricing. • Consolidated facilities into Atlanta member operation center modeled after Delta's, led by veteran operations leader, improving communication and coordination. • Closed $350 million term loan from Delta and new investors, with active discussions for remaining $50 million of $500 million investment, Delta and new investors owning ~95% equity post-investment. • Expect nearly all controlled fleet flying to be on new regional program within next year to harness network density and reduce fleet size.

Revenue for the third quarter was $320 million. Membership revenue was down slightly year-over-year, largely due to reduction in program offering though existing customers remained strong. Flight revenue was down 9% sequentially and 23% year-over-year, reflecting industry volume slowdown and company-specific market concerns before capital infusion. Adjusted contribution margin was 11% in the quarter, including $5.9 million of onetime software license revenue; excluding that, underlying adjusted contribution margin was 9.2%, the highest in over two years. Charter margins have improved.

• Expect to achieve positive adjusted EBITDA in 2024. • Goal to lead industry in operating performance while adding customers with exceptional service. • Continued improvements in operating performance expected, leveraging collaboration with Delta and network strengths to drive asset utilization and efficiency. • Year-end cash balance expected to be flat to up versus third quarter, reflecting improving profitability and remaining proceeds from term loan.

• Industry challenges and market speculation prior to funding completion negatively impacted prepaid blocks. • Need to continue working on achieving high service levels for customers, as there is still work to improve service to desired levels. • Ensuring successful execution of fleet consolidation and program changes to maintain profitability in primary service areas while managing charter operations outside those areas.