Will private jets run out for vacation?
You can’t get a new car – or at least the one you want. Your new sofa is out of stock. It could be delivered in January. Is the shortage of private jets the next step?
Sentient Jet, who invented the jet card, and Jet Linx Aviation, the sixth largest charter operator in the United States, stopped selling jet cards to new members at the end of last week. The advertisement, which took place 24 hours apart, followed similar moves in August by market leader NetJets and its aircraft management arm, Executive Jet Management.
The reasons are both complex and simple. The simple answer is that the business is too good. In the past four weeks, private flights in the United States have increased 14% from pre-Covid levels in 2019, according to WingX. In Florida there was 41% more private flights than two years ago. Argus TraqPak predicts record flight levels through the end of the year.
As demand for private flights has reached unprecedented levels, jet card programs and memberships offering fixed or capped fares with guaranteed short booking windows are under pressure to find these flights cost-effectively.
As prices for on-demand charter flights have skyrocketed in recent months, private travelers who had booked one-way flights have turned to jet cards, seeking to lock in both what they will pay and what they pay. ‘make sure they can get a plane when they call.
By announcing a pause in taking on new customers, all service providers spoke of their desire to take care of existing customers as a priority.
Customers who buy jet cards, typically prepaying $ 50,000 to $ 500,000, typically have flights in mind they want to take when they wire the money, executives say.
As existing members adjust to their individual travel habits, an influx of new customers leading up to the peak vacation travel season is scaring executives who have to contractually pay for these flights.
Executives say more than 90% of new customers book a flight within 30 days of joining. The agreements, which often span dozens of pages, allow customers to call and book flights with 10 to 24 hours notice.
From August to September, many jet card vendors have extended this reservation window. In fact, the average booking window increase nearly 50%, from 29 to 44 hours, for the more than 250 jet card programs that I trace on my site, Private jet card comparisons.
As a general rule, there is no price advantage between on-demand charters and fixed-rate jet cards, even if you pay a lot of money up front with the latter. The main benefits of the cards are the savings in time – you don’t have to shop around multiple brokers, compare quotes, review terms and contracts, then wire money for each trip – it’s easier budget and you get guaranteed cost-free replacement flights if the operator can’t make your trip. Some card programs also include defrost, WiFi and restore.
However, looking at 30 scenarios last month, jet cards were cheaper in 25 cases, beating the asking prices an average of $ 5,693 per segment. This is despite the jet card programs that increase rates by 2% month over month.
Now like the industry struggles with supply chain issues affecting how quickly planes can be repaired, fuel shortages and air traffic control slowdowns, executives I’ve spoken to are considering ways to get customers to book in advance or even to stay at home.
A CEO said his company has called customers, offering them a 10% discount to book their Thanksgiving and Christmas flights by next week. Another told me he was considering offering bonus flight credits to members who agree not to fly between November 15 and possibly during the Super Bowl, usually the busiest weekend for travel. by private jet.
Broker says there are good reasons to be concerned. Earlier this week, he struggled to find a jet in the busy East Coast corridor for a customer who late booked a flight from New York to North Carolina.
Kevin Diemar, CEO of Miami-based Unity Jets, a mid-size brokerage, says he’s glad he never added a fixed-price jet card product. While he recognizes that market prices are high and the inventory of available aircraft is low, he says, “I prefer to be in a position where I can give customers my best deal. If they can get better prices with a jet card, I’m happy to let someone else find out how they can make money on these flights.
Despite the breaks, there are still over 50 vendors selling jet cards in the United States and the big guys who have stopped selling still have thousands of customers who are likely to fly during the holidays.
A company that stopped selling jet cards in August, Jets.com, a mid-size broker, recently relaunched its program with longer booking times and higher rates. Magellan Jets, another midsize broker, just added a new card for light jets and Private Jet Services, specializing in sports team charters, added a new flat rate card on ultra-long haul jets. .
What is certain is that none of the new aviators who have flocked to private aviation due to Covid’s intention to return to airlines. “Never, never, never,” said a new private flyer when I asked this question after he finished complaining about the recent delays. His end result, “Flying in private is always much, much better. I could change providers, but I’m done with the airlines.
In a business where most customers join programs based on referrals from existing customers, vendors may wonder how the booming business has created so many headaches. How they’ll keep customers satisfied – and loyal – in the months to come may be their biggest challenge.