Mark Huber is an aviation industry veteran who has worked in the flight training, aircraft sales, aircraft component, and airport development businesses. He has flight time in more than 50 different and diverse aircraft, including helicopters, aerobatic aircraft, vintage warbirds, jet fighters, business jets and turboprops, and transport-category aircraft. He has jumped out of several of these—on purpose—with a parachute. His defense and aviation journalism has been published in a variety of national and international periodicals.

Contributor

Mark Huber

Wheels Up filed suit against FlyExclusive yesterday, claiming that the company arbitrarily and illegally terminated its charter flight agreement over the July 4th weekend. The move had the potential to disrupt&nbsp;the flights of 75 Wheels Up passengers. For its part, FlyExclusive claims Wheels Up has an unpaid bill of $917,000.
In a <a href="https://acrobat.adobe.com/link/review?uri=urn:aaid:scds:US:182d3ac2-d063-4d7e-babc-7719f79653d5">complaint filed with the U.S. District Court for New York’s Southern District</a>, Wheels Up accused FlyExclusive of “baselessly” demanding $600,000 in two separate additional payments for flights over the weekend that Wheels Up said it had already paid for via “tens of millions of dollars in deposits” provided to FlyExclusive under a “fleet guaranteed revenue program agreement” (GRP). The agreement has been in force since Nov.&nbsp;1, 2021, and was scheduled to run for 18 months of normal operations and a 10-month “draw-down” period to allow FlyExclusive to reintegrate capacity allocated to Wheels Up into FlyExclusive’s regular operations. Wheels Up said the deposits were sufficient to cover six months’ worth of flight activity.&nbsp;The GRP provided Wheels Up access to specific FlyExclusive aircraft and guaranteed FlyExclusive a set number of flight hours for each aircraft assigned to Wheels Up, reconciled on both a monthly and quarterly basis.&nbsp;
FlyExclusive claims that Wheels Up was in breach of its agreement by not paying invoices from May and June, which Wheels Up denies. The initial 18-month agreement period expired on May 1, 2023, but the 10-month draw-down period would not begin until one of the parties formally provided notice of termination, according to Wheels Up.&nbsp;
FlyExclusive, which operates approximately 90 aircraft and is the fifth-largest provider of private lift in the U.S., is privately held by Thomas J. "Jim"&nbsp;Segrave, and it was Segrave who personally terminated the agreement with Wheels Up via email on the evening of June 30, then temporarily recanted after the first $300,000 payment was made. Wheels Up alleges that when Segrave demanded a second $300,000 payment to cover flights on Sunday, it declined to do so and made other flight arrangements for its customers. Wheels Up characterized the payment and payment demand as “coercive” and accused Segrave of acting in “bad faith” by “improperly” terminating the agreement between the two companies.&nbsp;
However, numerous termination escape clauses are built into the agreement, including any material breach not cured within 30 days, failure to make timely payments within 10&nbsp;business days, or if either side “had become the subject of bankruptcy or receivership proceedings or committed an act of insolvency.” What exactly constitutes an “act of insolvency” is open to broad interpretation. But Wheels Up saw its cash position fall from $585 million to $363 million during Q1 2023. If its cash position falls below $125 million, it will be in breach of its aircraft financing covenants. Wheels Up will announce its second-quarter financial results in a few weeks.&nbsp;
FlyExclusive claims Wheels Up has outstanding unpaid invoices that place it in breach of the agreement. In its suit, Wheels Up alleges that it never received proper notice of any unpaid invoices and always promptly paid its bills to FlyExclusive. However, in its court filing, Wheels Up admits that a $917,000 bill for fuel and other services for the period ending April 30 and dated June 22 remains at issue “for discussion and approval” and that it was obligated to pay it no later than July 2, 2023.&nbsp;
For now, Wheels Up is seeking damages in “excess of $75,000,” an amount that is implied to recoup the weekend payments as well as the balance of deposits held by FlyExclusive.&nbsp;The lawsuit comes two days after publicly traded Wheels Up filed documents with the U.S. Securities and Exchange Commission announcing a substantial compensation increase for acting CEO Todd Smith. In early trading this morning, Wheels Up stock was down nearly 12 percent on the day at $1.15 per share.&nbsp;

News and issues concerning the aviation charter and fractional-ownership industries and markets, including company announcements, regulations, new developments and labor issues.

Wheels Up Sues FlyExclusive over Contract Dispute

Wheels Up claims FlyExclusive illegally terminated an agreement to provide supplemental lift.

2024 Corporate Aviation Leadership Summit

Charles Alcock

News and developments about airplanes, helicopters and unmanned air vehicles used in all varieties of operations, including airlines, military, business, commercial, general aviation and private.

News and issues relating to business, corporate and private aviation, primarily regarding turbine-engine-powered airplanes and helicopters. Subjects include aircraft, engines, maintenance, operations, personnel, acquisitions, accidents, safety, security, and training.

The Hong Kong-based operator now has almost 50 business aircraft

China’s Sino Jet Expands Charter Fleet with Second G700

Jessica Reed

Program launches with HondaJet HA-420 and Bombardier Challenger 3500

Honda Aircraft Unit Backs Thrive Fractional Jet Program

Amy Wilder

Elite Jets, MaxAir keep names, add Priester co-brand

Priester Aviation Unifies Companies under One Brand

Program lets non-members compare pricing before booking

BlueSky Extends Pricing Access to Non-members

Hourly rates range from turboprops to VIP airliners

Paramount Business Jets Guide Details 2026 Charter Rates

Kerry Lynch

News about bills, laws, regulations and other governmental decisions affecting aviation and aerospace. Topics include FAA re-authorizations, taxes on fuel and aviation activities, environmental legislation, ICAO decisions, governmental mediation of labor conflicts and World Trade Organization disputes and decisions.

In this article

Wheels Up

More In Charter & Fractional

China’s Sino Jet Expands Charter Fleet with Second G700

The Hong Kong-based operator now has almost 50 business aircraft

Honda Aircraft Unit Backs Thrive Fractional Jet Program

Program launches with HondaJet HA-420 and Bombardier Challenger 3500

Priester Aviation Unifies Companies under One Brand

Elite Jets, MaxAir keep names, add Priester co-brand

BlueSky Extends Pricing Access to Non-members

Program lets non-members compare pricing before booking

Paramount Business Jets Guide Details 2026 Charter Rates

Hourly rates range from turboprops to VIP airliners

ACA Forum Probes Broker Role in Fighting Illegal Charter

Brokers need to verify operations based on a standard

ACA Forum Explores Changing Role of Air Charter Brokers with AI

ACA is hosting its second U.S. forum as membership grows

FAI Grows Charter Fleet with Second Global 6000 Bizjet

Ultra-long-range jet is now available for worldwide charter

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN