July 27--The founder of Wheels Up bounded down the steps of the company's Citation Excel jet after it touched down at Ohio State University Airport recently, hugged everyone in sight and commanded his troops to "huddle up" for a pep talk.
Kenny Dichter, 46, originated the concept of selling a set number of flight hours on an aircraft. He partnered with Columbus-based NetJets to introduce the program as the Marquis Jet Card in 2001 and later sold the company to NetJets.
The serial entrepreneur's new venture, Wheels Up, is a similar -- but lower-cost and membership-based -- version of Marquis that's based in New York.
"We wouldn't be here without you," Dichter told the employees of the company's Worthington-based flight operations office as they gathered around him on the tarmac.
"Last Friday, we had 32 flights, a new record. And 32 will become 50, and 50 will become 100 ... We will be a huge business, I guarantee it!"
Wheels Up began flight operations in November with the backing of 300-plus investors. It has about 60 employees, including 10 in Worthington.
Dichter predicted revenue will grow to between $8 million and $10 million a month by December.
Aviation-industry experts say Wheels Up fills a niche and has a chance to succeed.
"They're not going head-to-head against NetJets," said Brian Foley of Foley Associates, a New Jersey-based aviation advisory firm.
"They're going after the value-oriented user and will be operating turboprops and pre-
owned business jets," he said. "They are being very conservative, starting in the Northeast, the biggest market, and expanding from there."
Wheels Up charges a one-time membership fee of $15,750 for individuals and $25,000 for corporations. Annual dues start in the second year and are $7,250 for individuals and $10,000 for companies.
Members fly on the company's two primary aircraft for a set hourly fee: $3,950 for the Beechcraft King Air 3501s and $6,950 per hour in the Cessna Citation Excel jets.
Wheels Up has about 530 members, and its fleet will include 27 King Airs and 10 Excels by the end of the year. The company has a $1.4 billion contract with Beechcraft for 105 aircraft and full maintenance service. The Excels are pre-owned. The King Airs and Excels hold eight to nine passengers each.
By comparison, a Marquis card from NetJets, which uses jets exclusively, starts "at about $135,000 for 25 flight hours and goes up from there," said company spokeswoman Christine Herbert.
NetJets also sells fractional ownership shares of its aircraft, which Wheels Up does not offer.
Because of the lower cost, "our market is five times as big," Dichter said. "But I don't see us as a direct competitor with NetJets. There's limited crossover."
Dichter's timing was good because there were changes in the business-aviation marketplace. Specifically, another fractional-ownership company, Florida-based Avantair, collapsed in June 2013 in the wake of financial and safety issues. It flew turboprop aircraft and served the lower end of the business aviation market that Wheels Up targets.
"They had 1,000 customers, and every one of these fliers is a natural for us," Dichter said.
The improved economy is also helping business aviation. Data from aviation-services firm Argus International indicates flights were up 3 percent in June compared with the previous year. This marks the seventh consecutive month of year-over-year increases for this market segment.
"The rising tide floats all boats, and the rising Dow (Jones industrial average) lifts all airplanes," Dichter said.
Dichter's first entrepreneurial effort was Alphabet City, a sports-marketing company that he started soon after he graduated from the University of Wisconsin in 1990. He sold it to SFX Entertainment in 1998, stayed with SFX and was introduced to business travel.
"I thought 'Wow, this is an unbelievable product set,'??" Dichter said. "I saw people and companies owning entire aircraft, fractional ownership at NetJets ... and nothing in between."
This led to the idea for Marquis.
He pitched the Marquis idea to NetJets, which eventually purchased it in 2010 for an undisclosed price, and Dichter left the following year after signing a two-year noncompete clause.
While on what he calls his sabbatical from NetJets, Dichter co-founded Avion, a high-end tequila that was part of the plot line of the Entourage TV series. Pernod Ricard recently purchased the company "for north of $100 million," he said.
Dichter also helped start Juice Press, a chain of shops that sell juices, smoothies and healthy snacks.
Other current projects he's involved in include: Cyc, a chain of gyms that offer fitness classes on a stationary bike; Cirrus Fitness, which puts college and professional team logos on fitness equipment; and Tour GCX, the golf equivalent of Wheels Up, in which golfers buy a membership that allows them to play on private courses around the world.
"Kenny's an entrepreneurial addict, and I say that in a loving way," said Dan Rosenthal, president of Milestone Aviation, a helicopter-leasing company with a Columbus office, and a former official at NetJets. "From a marketing and idea and passion and exuberance perspective, I've never met anyone like Kenny."
--The key to being an entrepreneur isn't complicated, Dichter said: You know your plan inside out, can defend it, and "have 110 percent confidence you can execute the plan."
Creativity is also important.
"I look at the business world as a big white canvas, and I bring my brush and I paint all day," he said.
Copyright 2014 - The Columbus Dispatch, Ohio