Company: UP
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001819516-25-000012
Chunk: 33

Company: Wheels Up Experience Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 1A
Chunk 33
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 in the market value of the long-lived assets, a significant change in the condition of the long-lived assets or our use of such assets and operating cash flow losses associated with the use of the long-lived assets. If the estimated residual value of any of our aircraft types is determined to be lower than the residual value assumptions used in our depreciation policies, the applicable aircraft type in our fleet may be impaired and may result in a material reduction in the book value of such aircraft types or we may need to prospectively modify our depreciation policies. An impairment on any of the aircraft types we operate or an increased level of depreciation expense resulting from a change to our depreciation policies could result in a material adverse impact to our financial results. Similarly, any factor that may cause an impairment on any of the aircraft types we operate may result in lower appraised values for such aircraft, which in turn could cause adverse impacts to us under the agreements governing our indebtedness obligations.

Significant reliance on relatively few original equipment manufacturers of aircraft, engine and parts poses risks to our business and prospects.

A substantial majority of our controlled aircraft fleet were manufactured by Bombardier Inc. (“Bombardier”), Embraer S.A. (“Embraer”) and Textron Inc. (“Textron”), and as part of our fleet modernization strategy, we intend to transition more heavily to Bombardier and Embraer jets while continuing to operate many Textron aircraft. We also rely, or expect to rely, on Honeywell, Pratt & Whitney and Rolls-Royce aircraft engines to power our controlled aircraft. We have negotiated preferred rates with certain OEMs and other third-party service providers for maintenance services, certain component repair services and to purchase and exchange parts. Parts and services from  OEMs and other third-party service providers are subject to their product and workmanship warranties. If any of these OEMs or other third-party service providers fail to adequately fulfill their obligations towards us or experience interruptions or disruptions in production or provision of services due to, for example, bankruptcy, natural disasters, labor strikes or disruption of their supply chain, we may experience a significant delay in the delivery of, or fail to receive, previously ordered aircraft, engines and parts, which would adversely affect our revenue and results of operations and could jeopardize our ability to meet the demands of our program participants. Due to the limited number of OEMs and other third-party service providers that are qualified to service our aircraft or that produce parts available, we are also exposed to potential rising costs passed through by such parties. In addition