Wheels Up Experience Inc. Q2 FY2024 earnings call

• Operational performance: In Q2, completion rate was 99% and on-time performance was 87%, and there were 31 brand days, a new record. Wheels Up is leading the industry in operational transparency.
• Product portfolio: In June, a streamlined and enhanced product portfolio was announced, including Wheels Up Charter for ad hoc trips and Wheels Up Membership with benefits like guaranteed availability. Upgrades to mobile app, website, and pricing platform were made.
• Partnership with Delta: Block sales for the quarter were up over 25% sequentially and over 50% year-over-year. Working with Delta SkyMiles loyalty team to engage high-net-worth individual customers.
• Operational improvements: Consolidated flight operations in Atlanta Member Operations Center, bolstered management ranks with Delta execs, focused controlled aircraft line where there's network density, and completed consolidation of FAA operating certificates for certain fleets, improving economies of scale and costs.

In Q2, revenue was $196 million, flat to the first quarter. Total charter flight transaction value (FTV) increased over 30% sequentially and over 15% year-over-year. Total charter FTV as a percent of total FTV now represents over 60%. Adjusted contribution margin approached 8% in the quarter, a nearly 7-point margin increase over the first quarter.

• Adjusted contribution margin is expected to improve significantly in the third quarter, driven by higher asset utilization, reduced fixed cost and continued charter growth, with further improvement also in the fourth quarter.
• Adjusted EBITDA loss was $37.4 million for the quarter, improved from a $49.2 million loss in the first quarter.
• Operating cash outflow was down 63% from the first quarter and down 87% year-over-year, showing improved cash management.
• Intention to invest in and modernize fleet across the portfolio, with more details to be shared later in the year.
• Recent block sale trends, including a strong start in July, indicate positive customer response and confidence in return to growth.