The heightened demand being seen by the private aviation industry as COVID-related fears motivate people to travel on charter flights is good for Wheels Up Experience (OPTT). However, the challenges related to high costs and growing competition make the company’s growth prospects questionable. Furthermore, given that UP’s financials look bleak, the question is, will the stock be able to recover from a decline this year in its share price? Read ahead to learn more.Private aviation company Wheels Up Experience Inc. (UP), which is headquartered in New York City, provides on-demand flights across various private aircraft cabin categories, aircraft acquisitions and sales, commercial travel, and a suite of other services. On July 14, 2021, UP went public through an SPAC merger. A substantial increase in demand across all cabin classes and a compelling membership model have contributed to the company’s accelerating revenue growth in its last reported quarter.
However, closing yesterday’s trading session at $7.74, UP’s stock is trading 48.4% below its 52-week price high of $15. In addition, the stock has lost 4.5% in price over the past month and 23.6% year-to-date, indicating bearishness. Indeed, UP is currently trading lower than its 50-day and 200-day moving averages of $8.74 and $9.83, respectively, which indicates a downtrend.
Although pandemic-related anxieties have fostered a growing consumer preference for flying by private aircraft, the pricing may be a deterrent for many. Moreover, since UP is still a small company in the competitive aviation industry, the stock could experience more dramatic price swings in the near term.