- 24 Nov 2022
- René Armas Maes
- Jet Charter
If you’ve outgrown ad hoc charter, but can’t justify Fractional Ownership, a Jet Card is likely to be the best option. René Armas Maes discusses areas to negotiate with the Card provider to ensure yours is truly tailored to your needs…Back to Articles
In the following scenario, a busy Flight Department has been using occasional ad hoc charter to supplement the company jet when it’s not available. For the past 18 months, this has allowed the operation to efficiently transport personnel to different places simultaneously.
Although ad hoc charter has worked well, the requirement for supplemental lift has been steadily increasing over the past year, in line with company’s growth projections. And with an extended period of downtime due in the coming year for the company aircraft to undergo scheduled maintenance, the Flight Department manager is looking at the options.
Though the increase doesn’t yet justify joining a fractional ownership program (ideal for those needing between 75- and 200-hours flying time annually), demand for supplemental lift is certainly expected to exceed 25 hours during the next 12 months – and probably nearer to 50 hours.
Through its use of ad hoc charter, the Flight Department has developed a good relationship with one provider, which offers a consistently good level of service and favorable pricing to loyal customers. However, with a growing need, a higher level of commitment will be needed from both the Flight Department and the charter provider – leading the Flight Department to consider a Jet Card, sold in blocks of 25, 50, or 100 hours of flying time by the charter provider.
Jet Card programs bring many benefits, guaranteeing a set number of annual flight hours at fixed rates within a predetermined area of operation (known as the primary service area). As fuel prices are highly volatile, a fixed rate is an attractive benefit for Jet Card holders which isn’t available to ad hoc charter users. However, fuel surcharges may still apply.
But despite this clear benefit of buying a Jet Card, to realize the full value of a Jet Card program, it is necessary to negotiate a program membership that works for your need, specifically. How should you approach this, and what areas should you focus on?
Program Offering vs. Flight Profile
First, scrutinize the provider’s offering and contract clauses, comparing it against other Jet Card programs. Uncover any hidden costs, including the additional charges. What is the program’s primary service area, and what does the Jet Card provider consider to be flights outside of this area that entail extra charges, including repositioning fees.
If you expect your flying activity to occasionally extend outside of the provider’s primary service area it would be worth seeking to negotiate a better deal regarding the extra fees and charges.
Moreover, benchmark several programs to ascertain which ones offer extra flexibility in terms of zero blackout date guarantees. Several may guarantee peak day availability for an additional surcharge that ranges between 10-50%, depending on the aircraft type and location. Find out what the extra charge is, and under what conditions it could be reduced or waived (based on the contract value and number of hours flown per year).
Also relating to matching your flight profile to the program offering, you’ll need to understand daily flight hour minimums, cancellation deadlines and fees, administration fees and de-icing costs (among other surcharges) to negotiate a better deal.
And finally, would the Jet Card membership make you eligible for round-trip discounts? Several providers either offer, or will negotiate, a discount if a larger percentage of your projected flight activity is for out-and-back round-trips.
Points, miles, and rewards are typically offered to frequent flyers in the airline business, but only the savvier Business Aviation users will know how to negotiate this with a charter provider. If you are a frequent charter flyer, the door will nevertheless be opened for doing so.
Let’s assume you have purchased two 50-hour jet cards during the last 18 months. You are likely to be in a strong position to negotiate shorter wait-to-service time, for example, or perhaps receive four hours free charter on non-peak days – especially if your provider has a large volume of aircraft at their disposal.
Additionally, you may consider negotiating with your provider what loyalty benefits you are entitled to, including for introducing a new customer to the program. At the very least, you should be discussing fee waivers on certain services such as de-icing and pet cleaning.
Cabin Type and Extra Fees
Depending on the Jet Card program and details of the specific package chosen, flight hours are likely to be for a specific aircraft type or cabin size (e.g. Mid-Size Jet). To access multiple aircraft types and sizes especially a larger cabin product from the providers fleet, a premium fee will generally be required.
In your case, there may be a very occasional need to carry additional passengers or access an airport with a short, unpaved runway, but not enough to justify the premium fee for multiple aircraft types/sizes. If so, it is still worth comparing rates across several programs before negotiating a fee with your preferred provider tailored to your anticipated need.
Other Negotiating Considerations
Find out which programs offer additional perks. For example, standard versus premium catering, free (or lower cost) Wi-Fi, and more. Could such perks be used as leverage to negotiate with your preferred Jet Card provider?
Likewise, benchmark providers concerning their refund policies for any unused hours. Typically, Jet Card programs are non-refundable, and most programs expire after a set number of months or years. Yet, this is another potential area to negotiate, based on the type of program you purchased and your flying activity.
Even though a monetary refund may not be available, can you negotiate rolling unused hours over, or using them towards a premium service level if/when you renew?
If a jet card is the right travel solution for you based on your monthly and annual utilization assessment, the next step is to approach and benchmark potential jet card program providers. In order to negotiate on key areas, it is vital to evaluate, understand, and read Jet Card programs contracts, including the fine print.
As you do so, assess what the program costs are, the extra fees, yearly inflationary adjustment (based on Customer Price Index fluctuations) and what aircraft are offered, from connectivity to galley and toilet among other areas.