- 07 Feb 2022
- René Armas Maes
- Aircraft Ownership
What are the key differences between Private Jet Memberships and ad hoc charter? Who gains the most advantage from each? René Armas Maes provides some detail…
While understanding the differences and benefits between a private jet membership and on-demand charter are important, even more essential is to execute a thorough analysis of your travel patterns to determine the right solution for you.
This should include the number of hours you fly per month, the average passenger load, how many same-day return trips versus overnight stays, the average length of trip, regular start and destination airports, and more. A better understanding of your travel patterns will help you ascertain the type of travel structure that’s right for you.
AMSTAT data showed there was less than 3.5% of the active business jet and turboprop fleet available for sale, as on April 12, 2022, representing a historic low. The shortage of pre-owned aircraft inventory continues to put pressure on Part 135 operators to expand their fleets to meet ever-increasing demand from the market. For many, the pressure has been high for the past year, and continues to increase.
In terms of aircraft utilization in 2021, the charter sector showed a 45% increase compared to (pre-pandemic) 2019.
Who Does Charter Suit?
Ad hoc private jet charter is typically designed to suit travelers with the need to fly up to 25 hours annually. For those with the need to fly between 25 and 100 hours, however, a jet membership program is likely to make better financial sense.
As highlighted in Figure 1 (below), essentially customers with flight requirements between one and one hundred hours annually should be looking primarily at ad hoc charter and jet cards as the most logical options to meet their needs. (For many first-time private flyers who will progress to own an aircraft, charter provides an ideal opportunity to test the water first, before taking on the commitment of ownership.)
Private Jet Memberships
Also known as jet card memberships, private jet memberships allocate holders a set number of guaranteed annual flight hours at fixed hourly rates. This service is pre-paid, and is commonly available in 25-, 50- and 100-hour increments.
Depending on the packages chosen, jet card programs might offer customers flight hours on a specific aircraft type, or access to multiple aircraft types and categories (usually for a higher price). Many will offer additional perks, including guaranteed back-up lift (through their own core fleet, or via preferred charter partners), zero blackout dates, catering, Wi-Fi, and more.
With that said, some private jet membership programs may guarantee peak day availability for a surcharge, while others offer a “no peak-day surcharge” policy if an enhanced program is chosen by the customer.
Regardless, by using a jet card membership, aircraft availability becomes predictable (especially when booking up to 48 hours before departure), as does price.
Ad Hoc Charter
In contrast to private jet membership schemes, on-demand charter is a pay-as-you-go service. In times of high demand – such as the current marketplace – availability of aircraft can be restricted and the marketplace competitive, especially on peak days and seasons (such as holidays).
Relating to aircraft availability, a charter provider delivers its ad hoc charter services on a first come, first served basis, which may mean your preferred aircraft is unavailable when you need it – especially if you book less than 48 hours prior to departure.
Owing to current high demand and skyrocketing jet fuel prices, charter prices have risen, and those who use charter on an ad hoc basis may experience some unpredictability in the cost of charter as a result.
Moreover, ad hoc charter requires a separate contract for each flight, meaning each flight is billed separately and requires a separate payment. Therefore, the costs of ferry flights (repositioning the aircraft into the location you require it to pick you up, or empty legs flown) may increase your bill too.
On the plus side, ad hoc charter requires no prepayments, and few (if any) contractual matters that need to be negotiated. The agreement between you and the charter provider begins and ends with the flight in question – so there is virtually no commitment involved.
What to Conclude?
If you believe private charter to be the right travel solution for you, first understand your monthly and annual utilization. Having identified your travel patterns and annual flight hours, the next step will be to approach, and benchmark, potential providers.
Whether ad hoc charter or a jet membership program is the best solution, be sure to evaluate and understand a potential charter company’s aircraft availability, pricing structure (peak and off-peak days), and which services are complementary, versus extra.
Uncover the “hidden costs” (in particular additional charges for flights outside of the service area, daily minimums, cancellation fees, administration fees, de-icing, and special catering requirements). And as important as cost-predictability is the guarantee of a consistent and safe travel experience.
Finally, if you are a frequent flyer, ask your provider about loyalty points and rewards, referral program benefits, and the possibility to waive certain service fees (such as de-icing costs). These will all count towards cost-effective, predictable, efficient travel for you, your colleagues, and your family.