Jet cards have been getting a lot of press lately, and with good reason. For the right type of flyer, they can save both money and time. But a private jet card may not be the best option for you. It really depends on your flights, and where you fly, how often you fly and when you fly. In this article, we take a look at jet cards and the various alternatives.
A number of companies offer jet cards and although the types of aircraft vary, the programs tend to be reasonably similar. They are typically structured in increments of 25 hours of flight time on a specific type of plane. There are also some which are structured in terms of a dollar deposit amount rather than hours, typically in increments of $50,000. In either structure, you are basically locking in the hourly rate that you’ll pay to use the aircraft. For example, you could lock in a price of $6,500 per hour on a light jet.
Once you’ve bought your jet card, you don’t need to search for a charter operator each time you need to fly somewhere. The legwork is done. You simply need to make your reservation with your card provider. Most cards offer guaranteed availability with as little as 24 hours’ notice, although travel during peak periods will usually need more notice.
Some providers also offer memberships, which have similar features to jet cards - notably fixed hourly rates - but require an annual membership fee.
Jet card companies may have their own closed fleet of consistent aircraft, or they may use a select set of charter aircraft from the open market.
If you fly between 20 to 50 hours a year, a jet card may be the right choice for you. They are particularly beneficial if you do a lot of one way flights, since you've locked in the hourly price, and usually don't have to pay for any repositioining or empty legs.
If you fly very infrequently, a jet card may not be the best investment. This is when a simple on-demand aircraft charter is your best bet. The only commitment you make is for the use of the aircraft on this one particular journey, making it ideal for one-off trips. There are no upfront payments or ongoing fees. Just pay for what you use. Through the help of a charter broker or charter operator, you can choose the exact type of aircraft to match your needs. However, once you reach the point where you are flying 20 or more hours a year, charters may prove expensive. In that event, a jet card may be a worthwhile investment.
Charter flights are a good alternative for the infrequent flyer. But if you fly more than 50 hours a year, there are other options that may make better financial sense. With a fractional ownership, you buy a share of an aircraft and are allocated a certain number of hours for annual use, which varies depending on the share size you purchase. This can range from as little as 50 hours to as many as 400 hours per year. Some programs allow you to carry over some unused flight hours to the next year. At the end of the contract term (usually 5 years), you have the option to renew your contract or to sell back your share. The amount you receive back will depend on the market at the time of sale.
Benefits of fractional ownership include the ability to buy a share in an aircraft that is best suited to your needs, and the knowledge that an aircraft from the company’s fleet can usually be made available with as little as 4-6 hours’ notice. Before purchasing a fraction, do be sure of all the costs involved, including the fees for acquisition, monthly maintenance, and hourly usage, and talk to your accountant about the tax benefits of depreciation.
Finally, if you travel more than several hundred hours per year, if you want a very specific type of aircraft that will suit all of your flight needs, if you want to be guaranteed absolute availability, or if you simply want the prestige that comes with aircraft ownership, you may want to consider buying a plane outright. Costs will vary enormously based on aircraft type and whether you buy new or used. An aircraft broker can ensure that you get the best deal and that all of the paperwork is in order. In addition to the initial cost, there will be ongoing expenses such as maintenance, storage, and crew. However, in return, you have a level of control and customization that fractional ownership or jet cards will not bring.
To get some idea on the costs involved in owning a plane, read these articles about an Embraer Phenom 300, a Bombardier Challenger 605, and a King Air 350.
In summary, there are a number of private aviation options and the best one for you will depend on several factors, including cost and particularly usage. When considering options, be realistic about what you need, how often you need it, and what you are willing/able to pay. Be prepared to shop around so that you are getting the best flight hours for your buck.
If you are at an early stage of reviewing options, then download our Guide to Private Aviation here. If you want detailed side by side comparisons of the leading jet card, membership and fractional programs, then sign up for membership of SherpaReport for $250 here.