Bankrupt JetSuite's sister JSX nets $8.9 million in CARES Act funds

After shutting down and filing for Chapter 11, JetSuite’s jet card customers may lose $50 million in unused flight credits. Sister JSX, which is still flying, just received $8.9 million in COVID-19 relief

OneSky Flight, parent of Flexjet, Sentient Jet, and PrivateFly; Airshare; FlyExclusive, and Tradewind all received CARES Act funding, according to the updated Treasury Department list

View the entire list, including all 202 aviation companies receiving COVID-19 payroll support

This may not sit well with JetSuite’s 1,000 or so SuiteKey customers who have around $50 million in unused flight credits. Delux Public Charter, LLC, a related company that flies under the JSX brand received $8.96 million in CARES Act COVID-19 relief funds.

Dallas-based private jet charter operator JetSuite suspended operations and then filed for bankruptcy protection last month in Delaware. It blamed the impact of COVID-19, although its chief restructuring officer said the company had struggled to turn profits during its more than 10 years of existence.

As part of its filings, Superior Air Charter, LLC, the official name of JetSuite, said it believed its impending insolvency would have prevented it from receiving Federal assistance.

In court filings, JetSuite said it is a wholly-owned subsidiary of JSI, LLC. In turn, JSI is wholly owned by JetSuiteX, Inc. JetSuiteX, Inc. owns Delux Public Charter LLC, which operates as JSX.

JSX operates scheduled flights on reconfigured regional jets using private aviation terminals in the Western U.S. By avoiding main terminals and security lines, customers can cut total travel time in half on its short hops, mainly under 500 miles.

Between September 2019 and March 2020 parent JetSuiteX loaned JetSuite $16.2 million and has applied to the court to provide additional debtor-in-possession funding. Prior to suspending operations, JetSuite had about 100 employees.

JetSuite and JSX had touted major investments from both Qatar Airways and JetBlue, the latter which received $936 million in CARES Act help.

The updated COVID-19 funding appeared on the Treasury Department’s website sometime late Friday or on Saturday.

Who received CARES Act support?

The list added several additional prominent players in the private jet space. Most notable is OneSky Flight, parent of Flexjet, the second-largest fractional operator behind NetJets, Sentient Jet, a leader in jet cards with estimated annual revenues of $300 million, and PrivateFly, an on-demand charter brokerage. The group, which is part of the Directional Aviation family of companies, received $84 million, the most of any business aviation company so far.

Another high-profile player on the updated list is FlyExclusive, which received $7.1 million. It ranked as the nation’s eighth-largest Part 135 operator last year, according to Argus Traqpak.

Two regional sellers of jet cards and shares, Executive Flight Services, which trades as Airshare (5th largest fractional operator), and Northern Jet Management (8th on the fractional list), received $6.9 million and $2.9 million, respectively.

Other Top 20 charter operators, according to Argus Traqpak data, that received funding includes Mountain Aviation (Received $7.2 million; Ranked 10th), Corporate Flight Management ($6.9 million; 13th), Wing Aviation Charter Services ($4.7 million; 25th), Worldwide jet Charter ($4.2 million; 17th), Pegasus Elite Aviation ($3.6 million; 24th), LJ Associates ($3.1 million; 18th), Ultimate Jet Charters ($2.8 million; 23rd), Ring Wing Aeroplane ($2.7 million; 19th), Jet Access Aviation ($2.4 million; 21st), and Aero Aviation ($1.7 million; 14th).

Tradewind Aviation, which offers a regional jet card program in the Northeast U.S. on its fleet of Pilatus PC-12s, received $4 million.

Hopscotch Air, a New York-based Cirrus SR22 operator that offers a membership program under the ClubScotch banner, received $112,896.

Its CEO Andrew Schmertz has a mixed view of the future. He tells Private Jet Card Comparisons, “We are less optimistic on the regional on-demand travel market  We’ve seen a small uptick in bookings for May and hope that accelerates in June. But with travel restrictions in place at many of our popular destinations, we foresee a challenging summer. For example, Provincetown and Block Island are encouraging visitors to wait until later in the summer to come and restaurants and many hotels are not open. This is the story throughout the northeast.”

At the same time, he sees a potential upside. “My outlook is brighter longer term. As the regional airlines all but collapse their services, air taxis can serve an important function in connecting small towns and cities to airline hubs,” Schmertz says. He adds,  “Will there still be airline service from Elmira, Ithaca, or Lancaster?  And what do we have to do to adjust our business model to make serving those cities viable?”

In the first release, Clay Lacy Aviation (11th) was granted $26.9 million, followed by fifth-ranked Jet Linx Aviation with $20 million.

Priester Aviation, which offers a jet card program in a number of key markets, received $4.5 million. Los Angeles-based Dreamline Aviation, which has a membership program targeting Southern California and Bay Area fliers, received $1.8 million. Advanced Air LLC, which operates Surf Air’s scheduled Pilatus PC-12 flights, received $2.7 million.

24 companies from California

In terms of where the companies were located, 24 were in California, 21 in Alaska, followed by Florida with 18, Texas with 17, and New York with 10.

So far, only two companies among the industry’s biggest players have said they didn’t apply for the money.

NetJets, the largest fractional operator and its Executive Jet Management arm, the second-largest charter operator, as well as Solairus Aviation, each said they did not seek any government relief.

None of the three Part 135 operators that belong to number one Wheels Up, including Gama Aviation Signature, Delta Private Jets, and TMC Jets, appear to have received funding. The same goes for XOJET Aviation, third-ranked on the Traqpak Part 135 list. It’s part of Vista Global Holdings.

Among other ranked fractional and charter operators, PlaneSense, Jet Edge, Jet Aviation, a unit of General Dynamics, Talon Air, Nicholas Air, SC Aviation, and Dumont Aviation have yet to show up on the Treasury Department’s list.

The Payroll Support Program provides payroll funding to passenger air carriers, cargo air carriers, and certain contractors for the continuation of payment of employee wages, salaries, and benefits.

A total of up to $25 billion is available for passenger air carriers; $4 billion for cargo air carriers; and $3 billion for contractors.

The amount to be received is based on its payroll expenses from April 2019 through September 2019, subject to proration.

Funds must exclusively be used for the continuation of payment of employee wages, salaries, and benefits, according to the Treasury’s website. More updates are promised as it approves additional applications and makes incremental payments. 

CARES Act Aviation Payroll Support (updated as of May 17, 2020)