Several years ago, the fractional aviation industry realized that it was grossly underutilizing a costly asset: its aircraft. At that time, fractional fleets flew only 25 to 30 percent of a given year and spent the rest of the time in hangars gathering dust.
One of the industry’s solutions to this problem was to offer those travelers who wanted to fly privately—but did not want to invest in a jet—access to an entire fleet of aircraft at a price considerably lower than the cost of fractional ownership. These travelers would purchase a jet card that allowed them to fly a certain number of hours on the issuing company’s planes. With this solution, everybody won: The fractional industry acquired more paying customers to use its aircraft, and jet card customers enjoyed commitment-free, private jet travel.
Today the popularity of jet cards continues to grow. Some owners of fractional shares purchase cards to use when their own aircraft may be offline for maintenance, or in the event that they need to use more than one jet simultaneously. In response to this trend, card programs are proliferating and their structures are evolving to meet specific customer needs. The variety of programs ranges from simple debit card accounts, from which issuers deduct flight fees as customers travel, to more elaborate structures that allow travelers to use a specific aircraft type for a set number of hours. Depending on the program, cardholders can utilize a wide range of aircraft to meet their travel needs. They can also enjoy significant cost savings if their travel schedules are flexible.
The number and complexity of jet card programs can make choosing the best plan difficult. There is a lot of information to wade through; some of it is useful, some not. As an aviation consultant, I work with clients to help them better understand their own travel needs and then match those needs to a specific offering. As you survey the jet card market—with its numerous program structures, sources of supply, and operational nuances—keep the following eight points in mind. They explain jet card basics and hopefully will help you find the right card at the best price.
1. Jet cards offer impressive benefits—at a greater cost.
Jet card programs offer many of the perks of aircraft ownership without the commitment and up-front capital outlay. When you purchase a jet card, you are simply buying access to a fleet or network of aircraft that someone else owns and maintains. While this may sound like traditional aircraft-charter services, it is, in fact, quite different: Unlike charter companies, jet card providers do not charge customers who are flying in primary service areas individual positioning fees for things like deadhead or positioning legs, or crew overnight lodging. Generally, you pay for flight time, and that is all.
Yet fewer positioning fees do not necessarily translate into lower overall costs. On the contrary, jet card customers pay some of the highest hourly costs in the aviation services industry. Because of this, cards typically make financial sense for travelers who fly fewer than 50 hours per year. With so little time spent in the air, these individuals cannot cost-justify aircraft ownership, whether outright or fractional.
2. Know your independent provider.
All of the major fractional companies offer jet card programs (see “Jet Card Programs at a Glance,” pages 168–169). A traveler who prefers to fly regularly in aircraft managed by a single provider will be more inclined to choose one of these programs.
Many charter companies and independent firms that have relationships with third-party charter providers also offer jet card programs. Should you choose to work with an independent jet card provider, it is important to understand how that company qualifies the third-party providers it uses. Who owns the jets, who maintains them, and who are the pilots flying them? Many charter brokers do, in fact, maintain high standards for the aircraft they offer their customers. A few, however, may not. As with any purchase, investigate the product thoroughly before committing.
With that in mind, it is also worth noting that fractional providers reserve the right to utilize charter aircraft when their own jets are not readily available. Whether you are considering a fractional, charter, or independent card provider, always read the fine print.
3. Just because you purchased a 25-hour card does not mean you get to fly for 25 hours.
Most jet card programs determine the number of hours they charge per flight by taking the total number of flight hours for each segment flown (a segment includes one takeoff and one landing) and adding two-tenths of an hour to account for takeoff and landing. So, for example, if you take six flights to use 25 hours, you will actually fly only 23.8 hours, and 1.2 hours will be allocated for takeoffs and landings. Obviously, the longer your flight segments, the lower the impact on your allotted hours. Correspondingly, the shorter the flight, the bigger the impact. So to get the greatest value from a jet card, use it for longer, direct flights.
4. Jet card operators often charge extra for certain destinations.
If you use a jet card to fly within the continental United States or within about 200 miles of the border, you will probably not be affected by service-area restrictions. However, if you travel to places like the Caribbean, Mexico, Canada, or Bermuda on a regular basis, your card provider may charge fees for crew overnight expenses, repositioning, or other miscellaneous costs. Additionally, depending upon location and travel date, some providers require advance notice for travel outside the primary service areas.
5. Some card programs penalize customers for leaving.
One of the benefits of a good card program is the ability to leave the program without penalties. Before signing on with a provider, it is vital that you understand your options for getting out of the program at a later date. A majority of jet card programs allows customers to roll over unused hours into a new card or a new annual contract. They also refund the value of unused hours upon request. However, some programs do not make refunds for smaller incremental hourly cards (less than 25 hours) or during an initial contract period.
6. Travel notice requirements: The bigger the provider, the better.
Providers generally require their jet card customers to provide 10 to 24 hours’ notice for travel during nonpeak periods. For travel outside their service area, they require 48 to 72 hours’ notice. Flights on peak-period days will generally require five to seven days’ notice. The rule of thumb with travel notice requirements is this: the bigger the provider, the larger the number of aircraft available, and therefore the shorter the required notice.
7. Want to upgrade to a better plane? You can, but be ready to pay for it.
Jet card programs that are aircraft-specific will often offer customers the option of upgrading or downgrading based on an established interchange ratio. While this is a valuable option to have, upgrading on a regular basis can be very costly.
Travelers who require various aircraft sizes would be wise to work with a program structured around deposits that are debited down as trips are flown, rather than one that offers a specific number of hours on a specific aircraft type.
8. Avoid short-leg flights like the plague.
Flights lasting less than one hour are called short legs. For jet card holders, these excursions can be financially deadly, because most programs deduct a minimum of one hour from your account even if your actual segment flight time is less than that. The hours lost to short-legging, when combined with those lost to takeoffs and landings, can balloon quickly and turn what was a financially advantageous travel option into an expensive gimmick. Bottom line: Long, nonstop flights offer the best bang for the jet card buck.
Lee Rohde is president of Aviation Management Systems (www.amsinc.aero), a consulting firm in Portsmouth, N.H., that serves the business- and commercial-aviation markets.