On-demand charter used to dominate the private jet charter industry some years ago. However, companies have diversified their service portfolios to incorporate memberships as well. The fundamental concept is a win-win solution for charter clients and aircraft operators. For business passengers who travel frequently, jet cards may provide a more attractive package in terms of cost comparison with on-demand flights. In return, operators have a steady source of incontestable income.
Membership cards are optimal for corporations whereby they get charged on an hourly basis which is the typical case for most clients. The prepaid service effectively saves them time and cost. Additionally, the effort spent scouring the market for reliable operators every time a jet charter is required is no longer needed.
In the North American charter industry, there are more than 65 companies offering such cards. Research carried out among three trip routes chosen through simple random sampling revealed that jet cards are the most beneficial when rented a day before. A window frame of 3 days results in negligible savings overall (Doug Gollan, 2021).
|Booking Period||Jet Card Average Savings|
|1 Day – 24 hours prior||$5,941|
|3 Days – 72 hours prior||$1,546|
|7 Days – 168 hours prior||$3,273|
The study also compared the price difference between on-demand charter and membership cards through aircraft preference. Super mid-size cabins prove to be the least profitable to charter clients.
|Aircraft Type||Jet Card Average Savings|
Few fixed rates have the reputation of misleading the passengers. Only 33.3% of jet card programs in the US publicize rates with factorization of Federal Excise Tax which amounts to 7.5% of the cost when flying beyond 355 km of the American border. Similarly, several companies do not advertise fuel surcharges in jet card prices which may lead to misinterpretation.
Hourly rates can be tricky to tackle due to daily minimums. Service providers will charge the passenger based on the fixed minimum minutes even when the flight took less time. Essentially, the customer ends up paying for hours they never flew. Thus, surface-level comparison of rates becomes a grave mistake. An operator offering a lower hourly rate may be profiting off their minimum minutes’ scheme instead.
Bulk buyers are under the impression of saving through fixed rates, but this is not always the case. Tracking travel expenses becomes simple, and the accounts are updated easily. On the other spectrum, jet cards come with indirect costs, which can easily climb up to a few thousand dollars. Non-preferred FBOs, taxi time, and peak seasons are all mentioned in the contract, but most clients neglect these terms initially to suffer later.
Before hiring planes, details about cancellations of trips, aircraft registrations, and safety metrics need to be investigated. Such checks are necessary for on-demand charter and even more so for membership-natured services because they are undertaken for extended periods.
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