Pricing the cost of a jet card

By Doug Gollan, March 3, 2019

When comparing the cost of jet cards, make sure you take a look at the fine print

Getting a fixed hourly price and guaranteed availability are two key advantages of buying a jet card over on-demand charter. However, what you see on jet card seller websites doesn’t always match what you are charged when you get your first invoice. Whether you subscribe to Private Jet Card Comparisons or not – for $250 it will save you hours of time and potentially thousands of dollars – I wanted to share some tips for what to look for.

Jet card pricing – what matters?

For example, if you see a light jet card advertised at $5,000 per hour for a deposit of $125,000, there are at over a dozen variables that will impact what you actually pay. Pay attention to these!

– Federal Excise Tax

If you are flying within the United States, to or from destinations within 220 miles of the coastline, you will need to pay a 7.5% Federal Excise Tax, commonly referred to as FET. Only 82 of the 311 programs I’ve reviewed include the tax in the rates they quote. What it means is that $5,000 hourly rate when you add in the tax is actually $5,375.

– Initiation and Membership Fees

While only a few programs have them, they can range from $1,000 to around $20,000 annually. If you want to make a head-to-head pricing comparison, divide the annual membership fee by the number of hours you plan to fly. If the dues are $10,000, and you expect to fly 25 hours, add $400 to the hourly rate.

– CPI Escalators and Rate Locks

CPI Escalators are driven by the Consumer Price Index and in some cases kick in quarterly. Not only will your hourly rate increase based on the CPI movement, in the ones I’ve seen there is an either or. The rate will increase at the published CPI or X rate, whichever is higher. In other words, your hourly rate is going up one way or another. Do keep in mind that for the most part the rate you are buying is only locked for a year, and subject to increase. It’s one reason you shouldn’t buy more hours than you need.

– Fuel Surcharges

While less than 20% of programs have fuel surcharges, they can be over $1,000 per hour and typically vary by size of aircraft. Fuel surcharges are updated monthly or quarterly but can add 10% or more to the quoted hourly rate.

– Deicing Charges

Some 83 of 311 jet card programs analyzed by Private Jet Card Comparisonsinclude deicing. If it’s not included, you will be billed for each incidence and pricing varies not only by the size of aircraft but locations. Each airport has different rules about what type of fluids can be used and where the deicing needs to take place. One European provider offers deicing insurance – something I think is a good idea. If you expect to be doing winter weather flying and are looking at a program where deicing is not included ask your provider for actual invoices from the airports you expect to be using for the aircraft types you will be flying. Anticipate between $1,500 and $10,000 each time.

– FBO and Airport Fees

Ask if there are any airport or landing fees not included in your hourly rate. Many programs will charge extra if you want to use a non-preferred FBO. Some also have fees for high-density airports.

– Taxi Time

Most programs charge 12 minutes of taxi time per segment. On your $5,000 hourly rate, that means $600 for each flight. If you are making 25 one-hour flights, it means you are really paying $5,600 per hour, or that $125,000 card actually costs $137,500. Also, ask if taxi time is included in daily or segment minimums. It can make a big difference. While two providers might both charge 12 minutes of taxi time and have a 60-minute minimum, if you make a 40-minute flight, and your hourly rate is $5,000, you would pay $5,000 if taxi time is included in the minimum (40 + 12 = 52 minutes charged as 60 minutes). If your program charges taxi time additionally you would pay for 72 minutes (60 + 12). Of course, some programs don’t charge for taxi time.

– Daily and Segment Minimums

While most buyers focus on hourly rates, daily and segment minimums are critical. For example, one program might have an $8,500 hourly rate with a two-hour segment minimum for a super-midsize jet while another has a $10,000 hourly rate with a 60-minute minimum. Guess what?  Your 90-minute flight on the second program will cost $15,000 compared to $17,000 for the program with the lower hourly rate! The lesson is to map out where you are going to fly before you buy so you can see how that program’s minimums impact what you will pay.

– Jet Card Roundtrip Discounts

To qualify for a roundtrip discount you typically have to fly out and back the same day with at least two hours of billable flying time and stay within the flight crew’s daily limits or fly at least two billable hours on consecutive days. Discounts range as high as 40% so if you are doing lots of quick turnarounds, it’s something to explore.

– Ferry Fees

One of the benefits of jet cards is one-way pricing, which means no ferry fees, however, this only applies to a specific service area (PSA). While most programs have the Continental U.S. in their PSA, some programs are regional. Make sure the places you are planning to fly are not subject to ferry fees or you will lose one of the big advantages of jet cards.

– Peak Day Surcharges

Charges on peak days can be up to 40% higher than your regular hourly rate and the number of peak days varies from 0 to over 50. Make sure to look at the peak days specific to the programs you are considering, and if you can’t avoid them, know how much they are going to be and include that in your decision-making calculations.

– Interchange Fees

Many jet card programs enable you to switch to a larger or small aircraft based on your needs, so it’s like having a fleet of aircraft at your disposal. In some cases, you simply pay the applicable rate for that type of aircraft while in others there is an interchange fee which can be as high as 20%. If you are going to need to switch cabin categories or aircraft types frequently, you will probably want to avoid programs with interchange fees.

– Wi-Fi

Not all programs include it, but some will add it on for an additional charge.

– Catering

Private aviation catering can be expensive. Some programs include basic packaged snacks and sodas while others offer hot meals and gourmet offerings, including fine wines. For shorter flights, many private fliers don’t even order catering, however, if you are traveling with larger groups for longer flights, catering bills can add up, so check what your program includes as part of your membership.

– Pets

Not all programs automatically allow pets, so don’t assume you can bring Fido. Some have moderate fees, while others only bill you if a clean-up is needed after your flight.

– Flight Attendants

Most jet card programs only include flight attendants on large-cabin private jets so if you want a flight attendant you will have to pay additionally.

– Multiple Same Time Aircraft Usage

For families and businesses being able to use multiple aircraft at the same time from one account can be like having your own flight department. Some programs limit the number of aircraft you can use at the same time at your fixed rate. There are sometimes restrictions during peak days. If you are going to need to use more than one plane at the same time, find out the rules of the programs you are considering.

– Destination Surcharges

While many U.S. programs include all or parts of Canada, Mexico and the Caribbean in the PSAs, they nevertheless have surcharges – sometimes as much as 20%. Make sure you check to see if the places you plan to fly are subject to additional fees.

Jet card final thoughts

Jet cards are popular because they are easy to use. Once you’ve selected a provider that meets your needs from safety standards to aircraft types, service area and so forth, you don’t need to spend time comparing quotes for each trip. Jet cards typically provide service recovery guarantees so you don’t have to requote if there is a mechanical, and of course, the commitment is as long or short as you want. Still, don’t just go by the rates you see on a website. Make sure you research hidden charges and fees so you can get an accurate comparison of what you will be paying and avoid any nasty surprise.

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