NetJets is pitching 25-hour, 5-year leases saying it’s “not sure” when a “short-term card will be offered, if ever”
NetJets sales executives are telling customers they are “not sure when the 25-hour short-term (jet) card will be offered, if ever.” Instead, they are pitching a 25-hour lease with a five-year term to fly starting in 2022 after the Easter holiday.
A spokesperson confirmed the news. “Our new 25-hour offering was introduced to provide a new product to those looking for a solution to fly with NetJets. The product helps reduce our demand volatility, yet still provides a solution for those flying less than 50 hours a year. NetJets is making long-term commitments in our fleet and infrastructure, and it is important we have long-term relationships with our customers to support these commitments.”
Previously, fractional shares and leases which run five years started at 50 hours.
Jet cards offered access in 25-and-50-hour increments. At the outset of Covid, NetJets offered 100-hour jet cards.
With cards, there was no commitment beyond the initial hours purchased although they expired in 24 months.
NetJets’ 25-hours leases replace jet cards
The NetJets’ leases allow customers to roll over unused hours and buy additional hours if needed, according to the sales letters.
The new entry-level leases are being offered on the Phenom 300, Citation XLS, Citation Sovereign, Challenger 350, and Challenger 650.
Like the original Elite cards, they will have 45 peak days. Additionally, there will be 45 black-out dates.
Last June as demand spiked, before it halted card sales in August, NetJets converted peak days to blackout dates.
In restarting jet card sales in Europe, NetJets there installed a mid-June to mid-September 90-day blackout.
Lead time to book will be 24 hours, with 120 hours on peak days, same as the Elite jet cards
NetJets 2022 Phenom 300 25-hour Lease Cost
|Monthly Lease Fee||$ 4,298|
|Monthly Management Fee||$ 6,059|
|Occupied Hourly Rate||$ 2,340|
|Fuel Variable||$ 875|
|Federal Excise Tax||$ 614|
|Average Cost Per Hour||$ 8,800|
Customers pay the first two years of management and lease payments upfront.
For a Phenom 300 25-hour lease it’s $248,568. They then pay an hourly rate, plus fuel surcharge and FET as they fly.
According to one proposal reviewed by Private Jet Card Comparisons, based on a current hourly fuel surcharge of $875, for a Phenom 300 on the 5-year, 25-hours per year lease, the average hourly rate is $8,800.
Cost of living increases on management fees and hourly rates are tied to the consumer price index.
Jet card waitlist
Before it starts selling the leases, the company is reaching out to prospects who put down 20% refundable deposits towards fractional ownership for deliveries starting later this year. As demand reached a crescendo last Fall, NetJets had stopped offering interim leases to fractional buyers.
According to the correspondence, “Once they are provided lift, we will start looking at those 4,000+ people who are on the card waitlist.”
The spokesperson said, “As a result of our 2021 efforts to address demand through fleet growth and pilot hiring, we have slowly and cautiously begun resuming sales in Q1 with the mindfulness of not sacrificing our service standards. We will continue to do this on an individual basis with those on our waitlist, prioritizing long-time owners and lease and shareowners, as fleet capacity is available.”
In a yearend letter to customers, NetJets said it hoped to be selling its “full” lineup by Spring.
It is taking delivery of over 150 new jets this year and last. In October, it ordered 100 an additional Phenom 300Es.