Deal Collapses Ahead of Holiday Rush
The relationship unraveled just before the July 4, 2023 holiday weekend, when FlyExclusive abruptly terminated the agreement. The company cited material breaches, including past-due payments, and raised concerns about Wheels Up’s alleged financial instability.
At the time, bankruptcy rumors swirled around Wheels Up. A month later, Delta Air Lines led a $490 million rescue package, stabilizing the company.
In his termination notice, FlyExclusive Chairman Jim Segrave wrote that Wheels Up’s failure to pay amounts due for May and June constituted material breaches that were not cured within the required 10 business days.
Competing Narratives Over Payments
Wheels Up has forcefully rejected those claims. In its court filings, the company argued that holding its large cash deposit was itself the strongest assurance of payment.
“There is no better guarantee for payment of future services than holding another’s cash deposit that fully covers those services,” the filing states.
Wheels Up maintains it never defaulted on finalized bills and was never subject to bankruptcy or insolvency proceedings. The company also alleges FlyExclusive coerced a $300,000 payment after issuing the termination notice, covering flights booked by Wheels Up members over the July 4 holiday.
