October 17, 2024
With a significant number of older private jets facing big upgrade costs to meet the compliance standards of ADS-B, or Automatic Dependence Surveillance-Broadcast, which go into effect in January, owners of those planes need to make decisions quickly.
For many, they will need to ground their jets as they look to buy new ones or perhaps hurry into a deal that doesn’t make sense.
Providing a bridging option, Alliance Aviation, recently launched by former Dumont Group executives Christopher Tasca and Amber Martin, has partnered with Encore Plane Parts to help provide flight hours and breathing room.
Encore specializes in aircraft retirement solutions, says Tasca, in other words buying older aircraft for the value of their parts.
In this case, aircraft owners can now add jet card hours as an option instead of a straight sale for cash. The advantage of jet card hours is you will be paid at a higher rate than a straight cash trade-in.
Tasca says jet owners provide Encore a CAMP report or equivalent. Encore’s team then will inspect the aircraft, provide a price offer of cash or jet card hours. There isn’t a specific ratio of cash to jet card hours, instead, it is worked out on a case-by-case basis.
Your old jet is delivered to Encore and then you get a Fly Alliance jet card in the dollar value you have negotiated.
“We realize many owners want to buy another jet, but finding the right one takes time, and then after closing, they may need to make upgrades or refurbishments, so by having a jet card, they can keep flying without having to rush into something or making a bad deal,” Tasca tells Private Jet Card Comparisons.
There’s more. Alliance has also launched an interest bearing jet card paying 7% annually on your balance.
Tasca says particularly for frequent fliers who want to benefit from lower rates when they buy 75 or 100 hours at a time, the dilemma becomes tying up between $400,000 and $1 million of capital and lost opportunity versus a lower hourly price.
The way it works is at the end of each month you are credited a 7% bonus annualized, so if you have a $500,000 deposit and use $100,000, leaving $400,000 at the end of your first month, you would receive a credit of $2,333, or 7% x $400,000 divided by 12.
After you run through your hours, you can use the credits for free flights or roll them into a new jet card to reduce the purchase price.
Alliance jet cards start at 25 hours and range upwards to 100 hours in increments of 25 hours. It offers five cabin size categories, starting with light jets, midsize, super-midsize and two options for large-cabin jets which guarantee 10 or 14 seats.
Its light jet program features the Hawker 400XP and Phenom 300, at $4,995 per hour, not including 7.5 Federal Excise Tax. At the top level, rates for a heavy jet guaranteeing at least 14 seats is $10,895 per hour, excluding tax.
Alliance is one of the few jet card programs that includes Hawaii with fixed hourly one-way rates. It also has generous qualifying terms for roundtrip discounts.
The program is fully refundable and offers an escrow account option, something that is always strongly recommended with privately-held providers, particularly start-ups.
Launched in July to a field of now more than 50 jet card providers, Alliance has also added an in-house travel agency and concierge team led by Kristen Kiekel, a former private jet flight attendant. This week it added Snowden S. Hernandez, formerly director of membership at Magellan Jets.
Tasca says his team brings to customers experience having arranged over 50,000 flight legs, servicing of over 1,000 jet card members and having facilitated over 150 aircraft transactions.
“Our philosophy is personalized service from people who have the experience, so you aren’t dealing with people who are learning on the job,” he said.
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