Company: UP
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001819516-25-000012
Chunk: 36

Company: Wheels Up Experience Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 1A
Chunk 36
---
 expect to continue to require maintenance and other services that are in high demand. We may be unsuccessful in balancing the mix of maintenance activities handled at our MRO facilities and by third parties, or be unable to expand our MRO activities commensurate with demand as we execute our fleet modernization strategy, which could have an adverse effect on our future business and results of operations. In addition, performing such services in-house internalizes the risks and potential liability for the performance of such services. If maintenance or repair services are not performed properly, this may lead to significant damage to aircraft, injury or loss of life, adverse publicity and legal claims against us, each of which could have an adverse impact on our business, prospects, results of operations and financial condition.

Significant increases in fuel costs could have a material adverse effect on our business, results of operations and financial condition.

Fuel is essential to the operation of our aircraft and to our ability to carry out our transport services. Fuel costs are a key component of our operating expenses. A significant increase in fuel costs may impact flight activity by our 

27

members and customers, and otherwise adversely impact our revenue, operating expenses and results of operations, including our margins. Pursuant to our agreements with members, members pay an indexed fuel surcharge that is applied when the cost of Jet A fuel, as published by the Argus U.S. Jet Fuel IndexTM, is more than $2.00 per gallon, which is calculated based on estimated billable flight time. Given our contractual ability to pass on increased fuel costs, in whole or in part, to certain of our customers and mitigate the risk with others, we do not maintain hedging arrangements for the price of fuel. However, increased fuel surcharges may adversely affect our member retention, the demand for flight services, revenue and margins if a prolonged period of high fuel costs occurs. In addition, potential increased environmental regulations that might require alternative fuels (e.g., sustainable aviation fuel or electrical propulsion) could lead to increased costs. To the extent there is a significant increase in fuel costs that affects the costs of our flight operations or the amount our members and charter customers choose to fly with us, it may have a material adverse effect on our business, prospects, results of operations and financial condition.

Aviation businesses are often affected by factors beyond their control including:  air traffic and ground congestion at airports; airport capacity restrictions; air traffic control inefficiencies; increased and changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; any of