It seems like everyday there is a new company or app or membership program popping up in the private aviation space and even as someone who works in the industry, it can be confusing. A lot of these companies market themselves as offering a unique service, but at the end of the day there are really four model for private air travel.
- Fractional Ownership
- Jet Card
- On-Demand Charter
Jet Cards and On-Demand are the two models that the majority of private flyers use and what I am going to focus on today.
Let’s start with Jet Cards. There are a LOT of different types of Jet Cards. Some allow you to fly on a specific type of jet each time, some a specific category of jet, others any jet within a given fleet. What they all have in common is that you pay in advance for your hours and in doing so lock down a fixed rate for those hours.
Sounds good but Jet Cards also tend to have A LOT of rules regarding how and when you can use those hours and with some cards, those hours can even expire. If you are considering a Jet Card, do your due diligence. Find out whether your hourly rate includes the 7.5% Federal Excise Tax, segment tax and airport fees. Determine whether there are international fees and surcharges, fuel surcharges, overnight fees, if you’re charged for taxi time, peak day surcharges and any black-out dates. What at first might seem like a good deal can end up costing more once the flurry of fees are tacked on.
Also ask how your deposit is held because you will be laying down a considerable amount of money. The minimum commitment is typically $50k although many programs start at $100k and up. Make sure the money you commit is put in an escrow account and there are proper procedures put in place for drawing it down because it isn’t unheard of for a Jet Card company to go bankrupt and then poof, your deposit is gone. I’m not saying all Jet Cards will do this, I’m just saying do your due diligence.
On-Demand Charter differs in that it allows you to pay only when you fly. There is no commitment in terms of money or hours, the only commitment you make is for your specific trip and you only pay for what you use.
So naturally you are wondering which is better?
That’s actually not an easy question to answer and there is a time and place for both.
If you are flying fewer than 25 hours a year, a jet card probably does not make sense for you and you are better served by sticking with On-Demand Charter.
Overall, On-Demand Charter tends to be more transparent in its cost structure as there is an exact price associated with your trip and you don’t need to factor in membership dues and the opportunity cost of having a large sum of money tied up on deposit. Also, if you end up with fees and surcharges for use outside the set parameters of your Jet Card, your hourly rate can end up a lot higher than expected.
Another advantage of On-Demand Charter is that you can choose the exact plane that fits your travel needs, whether it’s a light jet to take a handful of people to a meeting 700 miles away or a larger jet to fly across the continent. You aren’t restricted by a single fleet or type of aircraft as you tend to be with Jet Cards.
Some flyers end up using both models depending on their needs. If your jet card imposes a minimum flight time then it can make short trips expensive and it makes more sense to use On-Demand Charter in this instance. On-Demand Charter also tends to be less expensive for round trip flights with a short turnaround time. Jet Cards charge the same hourly rate for both legs of the trip whereas with On-Demand Charter the return leg is at a discounted rate. Lastly, with On-Demand Charter you can take advantage of possible empty legs. If you tend to book last-minute trips or have a flexible schedule, this can be especially advantageous.
I hope you found this information useful in helping you determine which model of private charter is best for your needs. If you have further questions, please don’t hesitate to reach out to us and we’d be happy to offer more guidance or provide pricing for your trip.