FlyExclusive switches approach to fuel surcharges, shorter call-outs

By Doug Gollan, May 20, 2022

With large contractual fuel surcharges pending, FlyExclusive is offering members a new option to mitigate the impact

FlyExclusive is tweaking its Jet Club jet card program. It isn”t adding a fuel surcharge. It is changing its fixed hourly rates so they slide up and down on a monthly basis based on fuel prices in the previous month.

The move comes ahead of a July 1 date where many of its jet card contracts are set to see hourly rates increase by $2,000 to $3,000 per hour due to a fuel clause.

“When we wrote the contracts, we didn’t envision the current environment,” Brad Blettner, Chief Revenue Officer told Private Jet Card Comparisons.

The company notified Jet Club members yesterday via an email, he said.

In the letter Blettner wrote, “Candidly, we did not anticipate both the significant high level and the extreme volatility of fuel pricing when we designed your current agreement structure. The current contractual adjustments coming would allow us to capture the extra cost we have incurred since your agreement was executed. But the cost increase is so substantial (and more than our actual increased cost) we would be much less competitive in the market when it comes time for you to renew. We are much more interested in maintaining a long-term relationship with our members than we are in generating short-term profit. For this reason, we are offering the opportunity for all members to migrate over to our new agreement structure.”

Rising Fuel Costs

The new rate structure means hourly rates move each month based on the average IATA fuel price for the final two weeks of the preceding month.

For each $10 change, Hourly Rates move up or down by:

  • Light Jets: $70
  • Midsize Jets: $85
  • Super-midsize Jets: $95

Previous contracts, which updated every six months, boosted rates by $200, $250, or $300 for each $10 change.

Many current contracts were executed when fuel was between $80 and $100.

The current basis is $180 per barrel. That puts the Hourly Rates in the new contracts for members who switch over at:

  • Light Jets: $3,950, plus FET and Daily Access
  • Midsize Jets: $4,425, plus FET and Daily Access
  • Super-midsize Jets: $5,875, plus FET and Daily Access

If the per barrel price of oil moved to $170, the Hourly Rates would fall to:

  • Light Jets: $3,880, plus FET and Daily Access
  • Midsize Jets: $4,340, plus FET and Daily Access
  • Super-midsize Jets: $5,780, plus FET and Daily Access

Visit: Fuel Cost and Surcharge Estimator

Daily Access Fee, which is based on deposit levels from $75,000 to $500,000, range from:

  • Light Jets: $5,500 to $7,000
  • Midsize Jets: $8,000 to $9,500
  • Super Mid-size Jets: $11,500 to $13,000

There are no daily minimums, so to figure out your flight cost, you take daily access fee, hourly rate, plus FET, and taxi time.

QUICK COMPARE FLIGHT PRICING for paid subscribers enables you to calculate estimated flights costs simply by entering flight minutes. You can compare FlyExclusive and more than 250 fixed/capped rate programs.

FlyExclusive 24-Hours’ Guaranteed Access

In a second move, FlyExclusive is tweaking the surcharge for guaranteed availability on shorter notice. Standard non-peak call-out is 96 hours.

Previously, for guaranteed availability at 24 hours, there was a 100% surcharge.

That now becomes a fixed daily amount designed to cover repositioning.

For 24 hours, the extra charges in new agreements are $8,000, $8,500, or $11,000 per day, based on aircraft category, light to super midsize.

At 48 hours, it is $6,000, $,6500, or $8,500. At 72 hours, it is $4,000, $4,500, or $6,500.

Since the FlyExclusive structure already favored longer flights, same day roundtrips, and multiple segments in the same day, the move will make it more attractive to business flyers who need to book on short notice, particularly inside 48 hours where there are far few programs in that range.

An analysis by Private Jet Card Comparisons of non-peak call-out for over 250 jet cards found lead time for booking increased to 62 hours from 23 hours between the end of 2020 and Q1 2022.

After Sentient Jet increased its non-peak call-out from 24 to 48 hours, there are just eight U.S. providers with call-outs of 24 hours or less.

Peak Day Surcharges

The other tweak was the new contracts go to a similar flat fee for 25 high-demand days and 20 peak days. Previously they had been surcharged 50% and 100%.

There are no additional peak days or other changes we noticed.

Blettner said the company didn’t consider invoking the. typical 30-day or force majeure clauses companies have been using to implement mid-contract changes.

In the letter to members he wrote, “You are, of course, free to remain in your current agreement, for the remaining term of that agreement, or in the case of Exclusive Club agreements, indefinitely with your annual membership fee, or you now have the option to transfer your balance over to our new agreement, at current rates without penalty.”

The new pricing structure is now posted in our comparisons for paid subscribers.

So far response has been positive, according to Blettner. He said the roll-out has also sparked conversations about its recently announced CJ3 fractional ownership program.

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