By Allison Lampert and Shivansh Tiwary
(Reuters) -Wheels Up Experience said on Wednesday there was "substantial doubt" about its ability to continue operations, even as it disclosed short-term funding from Delta Air Lines (NYSE:DAL), sending its shares plunging 42%.
The company, which charters planes by the hour, has taken a slew of restructuring measures this year including job cuts and management changes as private jet traffic, which soared on demand from wealthy travelers during the pandemic, has slowed.
North American business flights were down 3.6% compared with July 2022, according to data from Argus International.
Delta said in a statement that it was providing a short-term capital infusion in the form of a secured promissory note to Wheels Up, which is pursuing strategic partnerships. It did not disclose the size of the funding.
There was a huge growth in private jet travel because people avoided commercial airlines during the pandemic, but as commercial travel has recovered, it has hit private operators, Delta CEO Ed Bastian told Reuters in an interview last month.
Wheels Up, which canceled an earnings call scheduled for Wednesday, said U.S. private jet operator Airshare had entered into a non-binding agreement with the company to acquire its non-core aircraft management business.
Airshare said with this potential acquisition it would have aircraft management customers across the U.S.