Private Jet Cards – Understand the Risks

November 19th, 2020 | Traveling Tips

Hidden fees, travel restrictions, and risk management are just a few common obstacles faced when booking private flights through a private jet card—and why you might want to consider becoming a customer of a private charter program instead.

How exactly do jet cards work?

Jet cards essentially work like this: the customer prepays for flight hours for a particular type of aircraft. It’s like loading a prepaid debit card, but in exchange for an upfront cash deposit, the customer receives flight time at a fixed hourly rate. On the surface, it’s seemingly convenient, but can often end up being a risky affair.

You might have read about the recent Chapter 11 bankruptcy of JetSuite, a Dallas-based private jet card service. Shortly after COVID-19 grounded their fleet, news of the bankruptcy began to surface and it is now estimated that jet card members lost over $50 million in prepaid flight credits. This event highlights an inherent component to the jet card business model: risk.

Is a jet card cheaper than a charter?

So, you just gave the jet card company $200,000. You should receive low, locked-in pricing, right? Not necessarily. Many people assume if they are buying hours in bulk, they are receiving a better deal than chartering each trip, like buying socks in bulk at Costco instead of individual pairs at the mall. In reality, a good charter provider can offer these same rates or better without a large, upfront deposit.

The fixed hourly rate advertised by jet cards have financial risk premiums and aircraft repositioning expenses rolled into the final price. Chartering on a pay-as-you-fly basis provides increased transparency on pricing. Customer’s pay for the aircraft they need at market value and nothing more.

Always read the fine print

While the individual terms of jet cards change from one provider to the next, there are some common restrictions and fees to look out for. From non-preferred FBO fees to deductions for taxi time, card holders may find hours disappearing faster than expected. In short, prepaid hours do not translate to in-flight hours.

Another important detail to consider is minimum daily flight time. This means if a card indicates a minimum flight time of two hours, but the flight only takes 50 minutes, customers can expect to pay the difference.

Additional fees are also commonplace when flying during peak travel times and on holidays. It is typical for issuers to adjust the required lead times and charge an additional 5-10% fee to hourly rates.

Jet card holders may also find themselves losing hours to expiration dates. In most cases, hours expire in 12 to 36 months.

What private charter programs can offer you

At FlyUSA, we want to get you the best price possible for every trip, without losing time or money to hidden fees or unforeseen risk. We are committed to transparency about every cost involved in your flight. And because there is no commitment before booking, you won’t lose time to expiration dates or pre-set minimum flight time. We work with you on every trip you plan, every step of the way.

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