December 1, 2024
Prepaid jet cards and fractional ownership both carry financial risks if your provider fails. Here is how you view provider finances.
Will my private jet company go bust? Will I lose money? In our annual survey of Private Jet Card Comparisons members, which garnered 594 responses, we asked how you view provider financial stability. We also segmented your responses by fractional owners versus our overall respondents. We then looked at those of you who are just considering private aviation. Lastly, we had artificial intelligence analyze all your comments. Here’s what you said.
We asked, “Which statement best applies when it comes to weighing a provider’s financial stability?”
Those considering private aviation were 24.2% more conflated by sorting out finances with so many privately held options.
There is always a disagreement about which is worse for the customer: the failure of a fractional or jet card provider.
If a jet card provider fails, you are an unsecured creditor.
If a fractional company fails, you still have an asset.
However, that’s if there are no allegations of fraud, as there were with Ascension Air and AeroVanti.
With Jet It, owners were faced with unpaid bills and liens before their aircraft could be sold, and it took several months, although it went very smoothly.
Avantair’s 2013 closure left owners hanging for years, as some fractional aircraft had been parted out.
In terms of the responses from those of you who are part of fractional programs, your concerns mirrored those of all respondents.
Where does financial stability come in with those considering changing your provider?
Only 17.8% of respondents who said they were considering changing providers listed financial viability/uncertainty as a reason.
That was sixth on your list behind the far-and-away leader – increased prices – at 64.3%.
As you might imagine, financial concerns vary by provider.
We looked at the five providers with the most customers among respondents to our survey.
No NetJets customers – as in 0% listed financial concerns as a reason, while it was just 7.1% for Flexjet.
On the other hand, 39.4% of you considering leaving Wheels Up listed concerns about financial stability, even with its backing by Delta Air Lines.
Of course, the survey was in the field from mid-July to mid-September.
That was before the latest support signals from Delta and its investing partners.
Sentient Jet (12.5%), the same company as Flexjet, and FlyExclusive (18.2%), a publicly traded company, were in the middle.
We then fed all of your comments into artificial intelligence.
We asked for an analysis of your common concerns, insights, and a summary overview.
Many users are concerned about companies’ financial stability, particularly prepaid jet card programs.
Customers are wary of paying large sums of money upfront, especially in light of past incidents where companies have gone bankrupt or failed to honor prepaid balances.
Several comments mention the fear of losing significant deposits, which makes some customers hesitant to commit to jet cards unless they feel confident in the company’s financial health.
Users frequently reference past negative experiences, such as losing money with failed companies like JetSuite.
These experiences have led many to become more cautious, questioning the solvency of companies they consider working with.
A few users have stated that they refuse to use jet card programs altogether due to a past incident where they lost substantial funds.
Customers prefer larger, well-established companies like NetJets and Flexjet, which are perceived to have strong financial backing.
In particular, NetJets benefits from its association with Berkshire Hathaway, which reassures customers that the company is financially secure and less likely to face solvency issues.
For these reasons, many users view NetJets as a safer option, even if it’s more expensive because they believe the company’s financial stability is guaranteed.
Many comments reflect a general skepticism about smaller or newer private aviation companies.
Still, 71% said you were open to boutique providers when you filled out your DECIDER CUSTOM ANALYSIS requests.
Users question the financial health of these companies, especially if they offer aggressive promotions or discounts that seem unsustainable.
There’s concern that some smaller providers are overleveraged or too reliant on continual deposits, which could lead to financial trouble down the road.
Some users noted that frequent sales outreach and promotions, particularly aggressive efforts to secure new deposits or renew memberships, raise red flags about a company’s financial health.
OneFlight International was mentioned in this context.
Some see this behavior as a sign that a company might be struggling with cash flow.
There were mentions of unease surrounding companies recently acquired by private equity firms, such as Airshare.
While customers remained cautiously optimistic, they expressed concern that private equity ownership might lead to cost-cutting measures or compromises in service quality.
These concerns stem from the perception that private equity firms prioritize short-term profits, which could affect the long-term financial health of the companies they acquire.
Rising costs, such as fuel surcharges and unexpected fees, were also mentioned as potential indicators of financial instability.
Some customers view these price hikes and extra fees as a sign that a company may be struggling to maintain profitability, which further erodes trust in their financial standing.
Users overwhelmingly prefer companies with transparent financials or those backed by large, financially stable parent organizations.
Providers like NetJets, with its connection to Berkshire Hathaway, are favored for their perceived security.
The private aviation industry has seen some high-profile bankruptcies in recent years, which has made customers more cautious about where they invest their money.
Companies that offer prepaid jet card programs or fractional ownership need to work harder to prove their financial health.
Many users noted the importance of financial transparency when selecting a provider.
Customers want reassurance that their money is safe and prefer companies that disclose financial information or have a track record of stability.
One user mentioned declining to renew with Nicholas Air because the company refused to provide financial information.
The company has been in business since 1997.
Customers’ perception of a company’s financial stability often drives decision-making.
Even if a company isn’t in financial trouble, aggressive sales tactics or unexplained fees can make customers uneasy.
This suggests maintaining customer trust through clear communication and stable pricing is key to a company’s long-term success.
Financial stability is a major concern for private aviation customers, particularly when it comes to jet card programs and prepaid services.
Many users are wary of paying large sums up front, especially given past industry bankruptcies.
Larger, well-established providers like NetJets are favored due to their perceived financial security, while smaller or newer companies face skepticism.
Aggressive sales tactics and hidden fees are seen as potential warning signs of instability, and customers increasingly demand financial transparency before committing to a provider.
This focus on financial health suggests that the private aviation industry must prioritize clear communication and consistent service to retain trust.
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