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Block Charter & Jet Cards

Traditionally- you charter a business aircraft on an “as-needed” basis with no commitment beyond the current scheduled flight. If you consistently make use of charter- however- you may be able to purchase hours in blocks of time for a set price. Block Charter and Jet Cards are both pre-paid arrangements to receive a specific number of charter hours.

Jack Olcott   |   1st June 2013
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Block Charter & Jet Cards:
What are they- and when are they right for you.

Traditionally- you charter a business aircraft on an “as-needed” basis with no commitment beyond the current scheduled flight. If you consistently make use of charter- however- you may be able to purchase hours in blocks of time for a set price. Block Charter and Jet Cards are both pre-paid arrangements to receive a specific number of charter hours.

The Jet Card commonly refers to a formalized program whereby you purchase a “card” that entitles the holder to a prescribed number of charter hours. The idea probably came from the gift cards that are available from credit card companies and merchants. Essentially Block Charter achieves the same purpose- sans the card image and branding. With both- you agree to purchase a set amount of charter from a single provider. From here on- therefore- I will use the term Jet Card to apply to all methods of pre-purchasing a block of charter.

The provider of Jet Cards may be a single company (such as Marquis NetJets)- or a broker (such as Air Partner) that deals with several charter providers. So- what are the advantages and disadvantages of this form of charter? First- let us look at what Jet Cards offer.

While program specifics vary from provider to provider- a typical Jet Card plan has the following features: A block of 25-hours is purchased for a set price (e.g.- 25-hours for $150-000).

• The type of aircraft is specified (e.g. light jet)- along with a specific service provider or category of provider.
• There is a single point of contact for scheduling.
• The price guarantee and length of contract has a time limit of a year; most programs will allow the use of unused amounts after contract end- but at a different price.
• Availability may be guaranteed if booked in advance. You may get an aircraft with as little as 24-hours advanced notice for example.
• The provider guarantees the level of service.
• Some programs also offer concierge services by booking ground transportation- hotels and even obtaining tickets to special events or restaurant reservations.

ADVANTAGES
Cost Savings: Purchasing charter in advance secures a guaranteed price that does not increase during the length of the contract. Many programs do stipulate a variable fuel cost surcharge to account for the volatility of fuel prices.

Availability: With traditional charter- you do not have a guaranteed aircraft when you call. If the aircraft you require is not available- you may have to book a larger- more costly aircraft- or look elsewhere. With a Jet Card- if your aircraft category is not available- the provider will supply the equivalent or superior aircraft. So if the Hawker 900XP is not available- for example- you may get a larger- Gulfstream G200 at the same price.

Service Consistency: Using a single provider should enable you to enjoy the same level of service each time you fly. Service levels may even improve as the provider learns your needs and preferences (Diet Coke- no ice. Cashews- not peanuts).

DISADVANTAGES (i.e.- CAVEAT EMPTOR)

You need to be confident that you will use the allotted hours during the contract time. If you purchase a Jet Card and find the service is no longer needed- you may not be able to get a refund for the unused hours. If you do not use the allotted hours during the contract length- you may not be able to extend the contract without paying additional fees. Read carefully the terms of the contract:

• Does the company provide for a refund of unused funds? Can you apply the unused funds to a new card?
• Does the service provider have different sizes/capability aircraft? A client of ours flies a mix of short trips with few passengers and longer trips with many passengers. For them- a light jet and a mid-size jet are needed. • Be sure your special needs are specified in advance and are met by the terms of your Jet Card agreement.
• Does the card have a pre-defined service area? If you travel internationally- does the provider offer the opportunity for charter in those regions? One client of ours is evaluating charter travel from the US to China. If the card provider also has the ability to offer charter within China- that would make the logistics of the trip planning much simpler.
• What if the company providing the card goes out of business? This may be more of a risk with a smaller charter company- but even large companies are not immune to market forces.

If traditional charter works for you- but you need 25 to 50 hours per year- the Jet Card can be a cost effective means of accessing Business Aviation.

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