Since 2016 Wheels Up has been selling memberships in its pay-as-you-go jet card memberships via Costco on a seasonal basis. It’s not alone when it comes to other high-end products and services. You can buy diamonds and luxury cruises at the discount retailer.
The current offer is a $3,500 Costco Shop Card gift card and $4,000 of flight credits. It’s based on paying the $17,500 joining fee and first-year membership. The second-year renewal is $8,500.
Wheels Up and Costco don’t disclose how many memberships are sold. It may be a lot. Costco has a thriving business selling luxury cruises. Costco also sells airline gift cards. Some of the anecdotes that came to the surface when Costco moved its payment card relationship away from American Express re-enforced the view that the mass retailer is popular with a very wealthy segment. After all, if you have the storage space, why not buy paper towels in bulk? Most UHNWs know that it’s harder to earn money than spend it. A penny saved is a penny earned.
But back to the subject, is the Wheels Up deal with Costco a good deal?
First of all, the $10,000 actual cost after the credits doesn’t buy you flight hours. It gives you the right to buy flights with guaranteed availability at capped one-way rates.
Guaranteed availability means so long as you book before your contractual deadline, from as little as 24 hours depending on membership level and aircraft type, Wheels Up will get you an aircraft.
The fixed-capped rate means that it is the most you will pay on an hourly basis. Wheels Up then says the hourly price might be lower in some cases. Since it only introduced the capped rate structure in December 2019 and with COVID, it hasn’t provided us with any range to what the typical savings are. More on that in a minute. However, you know the most you will pay – the fixed rate cap.
As an example, the Wheels Up capped hourly rate on light jets is $5,795. It comes with a 90-minute daily minimum that is inclusive of 12-minutes taxi time. Midsize jet hourly rates are capped at $7,695, while super-midsize is $9,295 per hour and large cabin aircraft are $12,995. Its King Air 350i fleet is $4,695 per hour.
|Aircraft Type||Capped Hourly Rate|
|King Air 350i||$4,695|
One benefit of a pay-as-you-go program is you don’t have to deposit six figures or more. Many traditional jet cards require upfront deposits. Wheels Up also offer deposit options. It calls them Fund programs. They provide slightly lower rates in some cases, but the main benefit better terms.
And it’s those terms and policies that can influence which provider is best for you.
With programs that charge membership fees, remember to divide whatever you are paying per year by the expected number of hours you will fly. It’s something our exclusive QUICK COMPARE FLIGHT PRICING calculator factors in.
In other words, of the $10,000 you are paying after the credits, if you fly 10 hours, that adds an extra $1,000 per hour to your de facto flight cost. If you fly 40 hours in the next 12 months, it’s just $250. $10,000 divided by 40 hours instead of 10.
So there is an interesting dynamic. While pay-as-you-go programs are often attractive for folks who aren’t sure how much they will fly, the memberships increase in their cost efficiency the more you fly. Keep in mind some programs start at as few as 5 or 10 hours of flight time without joining fees.
With all jet card providers – and we mean all jet card providers – it also makes sense to directly contact the company when you see third-party offers. Bonus hours and flight credits are typical sweeteners you can negotiate. We’ve also seen a waiver of daily minimums that can be impactful if you make short flights and confirmed upgrades to larger jets for longer flights negotiated as well.
We sometimes see significant variances in what’s being offered by a provider without seeming rhyme or reason. In some cases, we think it was some short-term sales focus. In other cases, we believe it is based on where you are flying or where you are based.
What are we talking about? The one-way pricing we referred to previously and offered by many jet cards means your hourly rate exempts you from repositioning fees to get the aircraft to you before your flight, or back to its base after it drops you offer. Those costs are baked into the hourly rate. In other words, the risk is being held by the provider.
If you are flying up and down the coasts or from Chicago or Texas to Colorado ski destinations, you are in good company. In other words, there probably is an aircraft positioned close to where you are leaving from. When you land, somebody is probably waiting to use that same private jet. If most of your flights are from Iowa City to El Paso, and you are calling 24 hours before departure, chances are for the provider there will be many expensive repositioning flights.
We guess that as you talk to jet card providers, some incentives are based on where you’re based and where you will be flying. With Wheels Up’s capped pricing, it also means that you are likely to get better pricing when you are flying in corridors that are popular with private jets. By the way, contacting Wheels Up directly doesn’t mean you can’t come back to Costco after you’ve done a bit of legwork.
Wheels Up is one of the most purchased programs by subscribers of Private Jet Card Comparisons. It has the second largest for-hire fleet in the U.S. behind NetJets. The deal from Costco is solid. That said, whether or not Wheels Up is right for you is going to depend on more than pricing and the Costco discount. Policies such as lead time for reservations and cancelations, length of your flights, and the daily minimums, and some of the other 65 variables we compare, such as WiFi guarantees and deicing, will play a role.
Not just with the Costco offer, but also with any third-party deals, we recommend contacting the company directly. In fact, with Wheels Up, if you deposit $100,000, your initiation fee is reduced to $9,995 from $17,500. You also gain immediate Diamond frequent flyer status with Delta Air Lines. According to The Points Guy, that’s an $8,830 value. In other words, possibly a better deal depending on your needs.
We also highly recommend comparing providers before you buy. We find with subscribers who use our VIP JET CARD DECIDER service get relatively comparable deals. So, the true driver is identifying the provider and program that best fits your needs based on policies and terms. In other words, bonus offers aren’t likely to be the most important factor in making the best choice.