First, among major airlines, there was American Airlines and its AAdvantage Frequent Flier program back in 1981. Its compelling proposition of free flights to Hawaii made it an instant hit. Within months came everyone else. In the world of jet cards and fractional ownership, there have long been referral programs. Refer a friend (or enemy) and earn free flight hours, which with hourly rates of up to $10,000 or more, can be well, valuable. When buying cards, you can also try to wrangle an extra hour when you are signing. For on-demand charter, it has been mainly a trip to the Grand Bazaar with each journey a new opportunity to hone your skills and ask your broker, “Are you sure you can’t do a bit better?” Yesterday, U.K.-based charter broker Victor said it had launched its own frequent flier program hoping to develop loyalty with rightfully fickle on-demand charter customers who are conditioned to shop for a deal.
In its announcement, Victor said it has launched “the industry’s first ever global frequent-flyer points-based program.” Exclusive to Victor fliers, Alto aims to provide “a uniquely rewarding experience for regular on-demand charter,” according to a press release received by Private Jet Card Comparisons The Alto points customers earn with their Victor flights can be “quickly and seamlessly redeemed to offset the pricing of future flights.”
The basics are you earn $1 point for every dollar you spend on flight charter, excluding taxes, fees, catering, deicing, and so forth, and you can redeem your points in blocks of 10,000 points. For every $10,000 you spend with Victor for on-demand charter flight costs, you get a certificate worth 10,000 points, each which will get a $150 discount on your next flight. In other words, a point is worth 1.5 cents. You can accumulate and combine certificates, so if you spend $100,000, your 10 certificates will get you $1,500 off your next charter. You can’t use points to pay for catering, deicing or other related costs, something that might make it a bit more exciting. I mean, if I had $150 I could use as a catering credit, I might order a bottle of champagne instead of reducing a $40,000 charter bill to $39,850.
Unlike typical airline programs, it’s the buyer who accumulates points as opposed to the person sitting in the seat. This means if you are paying for your spouse, your kids, your company flights, as long as they are being paid by you referencing your Alto account, you earn the points. This could be very interesting for corporate bookers or a company owner where various executives are flying privately. In terms of using points, you don’t need to be a passenger, you just have to be the person with the Altopoints, so if you have enough of them, you could redeem them to fly your kids to camp instead of having to make that five-hour drive.
In its release, Victor said, “Alto represents a substantial investment by Victor in its growing customer base. In recognition of a successful 2017, and strong start to 2018, Victor will immediately reward its frequent-flying customers with over $800,000 of Alto points, based on the Victor charters they have made over the past 12 months. Over the next five years, Victor expects to deliver Alto points totaling tens of millions of dollars to jet-setting customers.”
According to the release, “Fliers can activate their Alto account via the Victor app and website, to track the points they earn and redeem….Points are valid, upon issue, for a period of 36 months and earned specifically against the core charter cost (not supplementary costs such as de-icing and catering).”
Following the initial roll-out of Alto it is Victor’s intention to introduce offers and benefits with official program partners and “provide further tailored value for customers.” In the world of jet cards, several programs, including Delta Private Jets, Sentient Jet, Wheels Up, XOJET and NetJets with its Marquis Jet card, have built out extensive luxury lifestyle partnerships. In fact, Sentient’s 2018 member benefits include over $125,000 discounts and freebies. Many programs also provide free experiences for customers spending $50,000 to $1,000,000 annually on jet cards with VIP hospitality at the Super Bowl, U.S. Open tennis and golf championships, and other high-profile events. Delta Private Jets offers free Diamond status on Delta Air Lines when you buy a jet card valued at $100,000 or more, something The Points Guy values at $8,540.
“In Alto we have listened to our customers and given them what they want – a smart, effortless and totally unique frequent-flyer rewards program that delivers fliers even greater control of their travel and helps ensure that they make the absolute most of every journey with us,” Joe Cohen, Victor’s recently appointed CEO, says, adding, “We’re excited about what this means for the wider industry too. We’re confident Alto will attract a greater number of regular, committed jet charterers, which is good for Victor, good for operators and good for industry suppliers. We’re starting the next chapter of private air mobility.”
On-demand charter consumers often go to several brokers to get quotes, so while Victor is looking to buy your loyalty – we’re not sure a 1.5% future flight credits offer is all that compelling unless Victor is already providing the best rate for the same, better or similar aircraft. In other words, if I am getting quotes from Victor and other brokers for a Citation X to and the Victor price is not more than 1.5% higher, then why not book with Victor as long as the actual operators and aircraft are of at least the same quality. By the same token, the on-demand charter market is a bit like buying a rug at the Grand Bazaar, so my guess is I might get the other broker to match the Victor Alto discount right then, saving me money upfront instead of at some future date. That’s probably not what Victor is hoping for, but it probably is how some buyers will approach the market. For Victor, nothing ventured, nothing gained I suppose. There is no cost to Victor if you don’t buy, and perhaps having Alto means you will be more likely to get a quote from Victor.
What’s our conclusion? At least to us, Alto resembles the early attempts by hotel companies at loyalty – nice try, but the value proposition didn’t match what airlines were offering. We also understand Victor has significant limits in what they can offer. They don’t own or operate the planes, so they can’t promise upgrades to larger aircraft. When you travel privately, there are no boarding lines, so they can’t offer you the ability to board with Group One.
We do like that your points remain valid for up to 36 months from the date of your last completed booking. It does give you an incentive to channel at least one booking every three years to Victor while at the same time building credits to where they might pay for all or most of a flight, and sure saving a few thousand dollars on your next charter is nice and makes the Victor rate more competitive. To get a $30,000 charter gratis means you will have spent $2 million on charter flights with Victor, which goes to the point that the program may be beneficial if you are paying for family and employees to fly as you will earn from their trips.
While Victor focuses on online quotes, it does also provide account reps to provide customer support. Several brokers we spoke with were nonplussed at Alto, not so much about the redemption rates but whether or not such a program really fits private jet charters. The consensus was simple: Chartering is not about the brokerage so much is it’s about the individual broker you have a relationship with the same way you have a real estate agent, financial planner, decorator or barber.
In summary, we give Victor the old “A for effort.” In a short number of years, Victor has established itself in the fragmented world of private jet charter brokers where there is a long tail of folks who sell private aviation with smartphones and a laptop. For customers who are already loyal to Victor, it’s nice although it probably wouldn’t make up for any service letdowns. It’s not like the sad fact I keep flying Airline X despite bad service because I want those two first class tickets to Europe that are just six more bad flights away.
Do we hope Victor adds to the program? Yes!
Perhaps to some luxury hotel company, somebody who earned 10,000 Altos points is worth giving a free night, something that could be a value considerably more than the $150 the points are worth. Could I redeem 20,000 or 30,000 points for two free nights? Now, that’s more interesting and might get me to try a luxury hotel I wouldn’t have otherwise thought about. There are so many choices these days. Victor already lists Shangri-la Hotels and Resorts as a partner and says Victor customers get preferred rates.
The same might be true at some level with jewelry retailers, luxury fashion brands or even a yacht broker to give a worthwhile discount and where the cost of gaining trial from high-spending new customers can be expensive. Burgess Yachts is listed as a Victor partner. There are also several partners, including a luxury travel agency, a ski specialist and a specialty car rental service. And are there reverse opportunities? If I charter a yacht for $200,000 per week from Burgess, in the future will I earn 200,000 Altopoints, a $3,000 discount off my next Victor charter? That might give the program a bit of stickiness.
We also believe allowing members to redeem points for something mundane but widely used such as gift cards from Amazon or Starbucks would be another good idea if they could be used as gifts by the Alto member. If I was able to get $450 in gift cards after a $30,000 charter, hey, I can hand them out to my driver, the doormen at my building or my assistants, all of whom would probably appreciate getting a $25 or $50 gift card. I might even use them myself. My coffee maker just went kaput. Thanks, Victor and Alto for saving me the cost of getting a new one.
Frequent private jet charter customers will be able to accumulate hundreds of thousands of points in a relatively short time while virtually all customers will have a balance of 20,000 or 30,000 points after one or two trips. Victor also accepts credit cards, although there may be extra fees so you might be able to double dip. We look forward to seeing how Victor can make Alto a compelling proposition.