Delta Air Lines (DAL) - Get Delta Air Lines Inc. Report definitively agreed to partner with, and take an equity position in, Wheels Up, a New York provider of private-aircraft services.
The deal connects Wheels Up with Delta's Private Jets unit, creating one of the world's largest fleets of private aircraft, the companies said in a statement.
The effort "will democratize private aviation, making the convenience of private-jet travel accessible to more consumers," Delta Chief Executive Ed Bastian said in the statement.
Wheels Up operates no aircraft, but rather acts as an agent, connecting members with licensed air carriers participating in its program.
The current 6,700 members of Wheels Up can make a phone call or use its application to search from flight inventory and book flights.
The system, the company says, gives passengers much more flexibility to fly where and when they want compared with scheduled carriers.
Wheels Up has three levels of membership, requiring dues and then hourly rates for use of aircraft.
Terms of the Delta-Wheels Up transaction weren't disclosed. Subject to conditions including regulatory clearances, the deal is expected to close early in 2020.
The transaction won't affect the 2019 financial outlook for Atlanta-based Delta Air.
Wheels Up CEO Kenny Dichter, an entrepreneur in his early 50s, started up his company in 2013. He'll continue in that role when the deal closes.
His background includes founding the aircraft-sharing company Marquis Jets, which in 2010 was sold to Berkshire Hathaway's NetJets.
In August Wheels Up raised $128 million in a funding round, including participation by Franklin Templeton, T. Rowe Price and Fidelity Management and Research.