Private jet membership seller JetSmarter is launching more changes

 

JetSmarter continues to be in the news. On August 10, it put out a news release that it had obtained more funding. It still has not disclosed how much new money it raised, however, in what appears to be a communication to members published on the website Flyertalk, the jet membership seller laid out some significant changes.

 

The two main reasons for joining JetSmarter, which offers memberships for $5,000 per year (Simple), Smart ($15,000) and Sophisticated ($50,000) is access to its private jet shuttle flights and empty legs. Hourly rates to charter a private jet range between $5,000 and $15,000 or more and a flight from New York to Los Angeles can set you back from $25,000 to $60,000 or more depending on the type of jet you are chartering and if you are traveling during a high-demand period. Yes, there is a lot of variation. What it means, is in theory, JetSmarter is a great way to access private aviation for a fraction of the cost.

 

The downside of empty legs is they are repositioning flights before or after a revenue flight, which means if the revenue customer changes his or her plans, bang, your empty leg may be canceled. In other words, don’t book a non-refundable hotel or tell your parents you will be home in time for dinner. With JetSmarter’s shuttles, the downside is frequency.  On routes such as New York to Los Angeles, its two times a week. Shuttles can also be sold out for weeks at a time, you are flying on somebody else’s schedule, much like booking a commercial flight, and then you are on a private jet filled to the gills, not necessarily a great experience for five or six hours. That said, JetSmarter fills a gap between flying commercially and chartering an entire private jet.

 

The email from JetSmarter says the company plans to use the unknown amount of funding it recently raised for “a phased rollout with new routes…and we are going to start by scaling our existing routes first, with an initial focus on New York-Los Angeles and Los Angeles-South Florida.” The memo says, “We are focusing on these specific hubs since a large percentage of members call these cities home and because New York-Los Angeles is the route where we most anticipate membership growth. Our goal is to scale these routes to two flights per day by year-end.”

 

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A core part of the plan is apparently a new type of shuttle called VIP Shuttles. JetSmarter writes, “We’ve heard you loud and clear that the couch is not a comfortable option for coast-to-coast flights, and that you would prefer dining options on longer flights. That’s why we are going to use a portion of the funding to transform our 3+ hour flights, starting with New York-Los Angeles and Los Angeles-South Florida, into the VIP experiences you have been asking for and very much deserve.”

 

It continues, “Everyone will now enjoy the comfort of a captain’s chair (no couch, unless someone wants it to themselves), free catering, and the convenience of flying with a flight attendant on a heavy jet (e.g. Gulfstream GIV-SP, Global Express, or Legacy 600). As I mentioned, we are going to start with these two routes, but our goal is to eventually transition all flights longer than 3 hours into VIP shuttle experiences.”

 

JetSmarter did not return our request for to review details, however from what we have learned, the VIP Shuttles will not come from JetSmarter scheduling more flights. Instead, it is hoping to get the additional flights by incentivizing its members to create more CUSTOM SHUTTLES by cutting the cost to do so. A CUSTOM SHUTTLE is where a member, based on their schedule, charters the entire jet, then sells off seats to other members earning credits, but takes the risk of unsold seats.

 

In July JetSmarter introduced the SHAREDCHARTER program, which enabled members to sell off seats on their own private charters on non-shuttle routes and earn credits for future flights. However, the nature of how the credits can be used and the fact that JetSmarter pricing for on-demand charter isn’t necessarily anything special may be a barrier. On its app, we could find only four SHAREDCHARTER flights departing from New York for the next month, and there were only 22 SHAREDCHARTER flights we could find in total. JetSmarter claims a membership of 10,000.

 

In the memo to members, JetSmarter wrote, “The next major challenge is to solve the frequency of flights. To stimulate flight creation along the New York-Los Angeles and Los Angeles-South Florida routes, we are also reducing the cost of CUSTOM SHUTTLES while at the same time, elevating the experience.”

 

It says, for flight creators, “Right now, it costs $16,470 to create a CUSTOMSHUTTLE on a heavy jet between South Florida and L.A. or between New York and L.A. In the beginning of September, we will only require two seats, and the creation prices will start at just $7,950 for SMART Members. We are thrilled to bring you on-demand, heavy-jet flights with premium seating and catering for such a low creation cost…In addition to lowering the creation cost, at the end of August, we are also launching a flight credit rebate program for all CUSTOMSHUTTLE creators on ALL routes. Similar to SHAREDCHARTERS, this new rebate program gives you another convenient way to monetize the seats you don’t need by allowing JetSmarter to sell them to fellow members. For example, if you launch a CUSTOMSHUTTLE that requires a three-seat minimum, but you only really need one seat, you can receive a flight credit rebate if you opt to let JetSmarter sell the two seats you don’t need to other members.”

 

The memo continued, for Flight Finders (those looking for seats on CUSTOMSHUTTLES), “If you are a SMART Member, to book seats on VIP Shuttles, you will need to purchase each leg with a token plus surcharge. The surcharge will start at just $750 per seat for VIP flights (remember no couch, free catering, and premium aircraft). Enjoy the flexibility of booking roundtrip coast-to-coast flights up front with just two tokens.”

 

It continues, “If you hold SOPHISTICATED Member status, beginning in mid-September, you can choose on a per-flight basis if you prefer to book your coast-to-coast seat with two tokens each way or use one token plus surcharge per leg. So, your 4 tokens give you even more flexibility. In addition to increased booking flexibility, SOPHISTICATED Members also receive 15% off on-demand CUSTOMSHUTTLE creation and 15% off all seat purchases.”

 

So what does it mean? From what we are told, there will be two categories of shuttles: Those scheduled by JetSmarter and the member initiated shuttles which will be the VIP Shuttles and used to increase frequency.

 

For SMART members ($15,000) on JetSmarter scheduled charters, we are told that the surcharge will range between $250 and $750. Looking at flights that weren’t sold out between New York and Los Angeles through the end of September, we found the surcharge ranged from $360 to $540 per flight.

 

How much will it be on the VIP Shuttles for a seat? We know at least $750 and we weren’t able to find out how much it will go up from there, except that it will be dynamic pricing, but let’s assume it is $750 each way between New York and Los Angeles.

 

If you are flying six roundtrips a year as a Smart Member, you pay $15,000 to start. If you are able to find space on the regular shuttles (it is unclear if couch seating will remain), let’s split the difference and say you will end up paying $500 each way, so a total of $6,000 ($500 each way X roundtrip X 6 trips). You will also have to factor in getting to and from Westchester County Airport (at one-time helicopter transfers were free, now they are dynamic pricing). Either way, you will have paid JetSmarter $21,000 for six roundtrips, or $3,500 roundtrip.

 

If you are looking at 10 roundtrips between New York and Los Angeles as a Smart member, using the same assumptions as above would mean paying $25,000 in total, or $2,500 per roundtrip. If you ended up flying on the VIP Shuttles, where you would have to pay a minimum $750 each way, or $1,500 roundtrip, the six roundtrips would work out at $4,000 each ($1,500 x 6 + 15,000) or for 10 roundtrips, $3,000 each ($1,500 x 10 + 15,000).

 

By comparison, we found American Airlines first class roundtrip fares JFK-LAX ranging from $1,949 to over $3,500 for Monday outbound, Thursday returns. We mention American because it offers VIP security at both JFK and LAX and individual seats that turn into flat beds, plus as many as 10 flights in each direction daily on the route. In other words, one benefit of flying JetSmarter is not hassling with the commercial airport, however, with American in first class, it’s really pretty much smooth sailing.

 

So what’s the conclusion?

 

It’s too early to say since the expansion of shuttles is based on JetSmarter members scheduling them. The VIP Shuttles will be a bit less crowded than the current JetSmarter shuttles since they won’t be stuffing people on the couch, but right now JetSmarter isn’t a dependable way to travel when you have to be somewhere. If successful, it will bring more frequency, but who knows how much? If the surcharge for the VIP Shuttle is $2,000 instead of $750 each way, our scenario with six trips goes to $6,500 roundtrip and the 10-trip scenario goes to $5,550 roundtrip.

 

Of course, this doesn’t take into account the value of any additional free flying for shuttles under three hours (which excludes certain routes) and it doesn’t include where you can snag empty legs for free.

 

Which means the bottom line with this JetSmarter news is like most things the company does – it’s hard to tell.

 

JetSmarter responded to our article above. Click here to read it.

 

About the Author Doug Gollan

I study and write about Ultra High Net Worth (UHNW) consumers, luxury travel, the business of luxury and private aviation, particularly jet cards