Company: UP
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001819516-25-000012
Chunk: 35

Company: Wheels Up Experience Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 1A
Chunk 35
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 reasonably estimated. Any unexpected increase in lease return costs, whether due to the condition of the aircraft or the availability and cost of any parts or equipment necessary to put the aircraft in the required return condition, may adversely impact our financial position and results of operations. In addition, any other costs or notice requirements associated with the termination or expiration of an aircraft lease may result in significant financial payments or limit our ability to strategically optimize our fleet, which may adversely impact our cost and fleet optimization initiatives.

We are exposed to operational disruptions and costs due to maintenance and repairs to our aircraft.

Our aircraft fleet requires regular maintenance work, which may cause operational disruption. If we are unable to perform timely maintenance and repairs to our aircraft, our aircraft may become unavailable for extended periods or otherwise underutilized, which could have an adverse impact on our business, results of operations and financial condition. On occasion, airframe or engine manufacturers and/or regulatory authorities require mandatory or recommended modifications to be made across a particular fleet, which may mean having to ground a particular type of aircraft for extended periods while maintenance is performed or parts become available to be installed. This may cause operational disruption to, and impose significant costs on, us. Furthermore, we frequently operate in remote locations where delivery of components and parts or transportation of maintenance personnel could take a significant period of time, which could result in delays in our ability to maintain and repair our aircraft. We often rely on commercial airlines to deliver such components and parts or transport maintenance personnel. Any such delays may pose a risk to our business, results of operations and financial condition. Moreover, our maintenance costs could potentially increase as our fleet ages or as we shift the types of aircraft that comprise our fleet as part of our fleet modernization strategy, and we may be unable to manage the composition of our fleet in a manner that reduces costs due to the availability and prices for replacement aircraft and parts.

We perform certain maintenance activities internally and may be unsuccessful in balancing the mix of maintenance activities handled at our MRO facilities and by third parties, which could impact our relationships with key vendors and have an adverse effect on our future business and results of operations.

We operate MRO facilities and strategically shift certain maintenance and repair activities between our MRO facilities and those of third parties. The availability of third-party maintenance and repair services is finite and geographically dispersed throughout North America. Any increase in the amount of maintenance or repair work that we perform at our MRO facilities could adversely affect our relationships with third parties that have historically provided MRO services to us, and from whom we