Risky Business – Jet Cards Dirty Little Secret Exposed
You may have read about some of the large, retail-driven private jet vendors filing for bankruptcy, taking with them millions of dollars in client pre-paid jet card deposits. How can you avoid the risks to safety and capital that come with deposit-based programs? How can you gain confidence in private aviation, given these uncertain times and as travel restrictions begin to ease?
Stratos Jet Charters has been in the private jet travel industry since 2006—long enough to weather major ups and downs in the market, including the 2008 recession. What we know to be true is that travelers can limit their risks, make the most informed decisions and put their own needs first when they travel on-demand.
TWO WAYS JET CARDS ARE RISKY FOR CUSTOMERS
1. Jet cards tie up your capital
If you read about the recent Chapter 11 bankruptcy filing of JetSuite, you’ll begin to see how jet card programs that require a deposit pose a financial risk.
Despite being able to promote fleet productivity and a strong safety record, this Private Jet Card Comparisons article says operator JetSuite still struggled to break even, in part because of “unreliability of the planes” they had acquired. That was all without the economic impact of the Coronavirus.
In the wake of COVID-19 travel restrictions, customers were told its fleet was being grounded, and then news arose of the bankruptcy. Now the private jet charter operator’s Chapter 11 filing confirms nearly $50 million in unused jet card deposits.
Many companies planned for their 2020 travel expenses and would have paid a huge annual deposit to their air carrier. Once the travel sector collapsed, it took some of those deposits with them.
2. Jet cards limit your aircraft selection and compromise your safety
With jet cards, the issuer is in control of selecting aircraft and air carriers for clients. The issuer’s safety standards might only consider aircraft operational history, even though aircraft performance, aircraft age, pilot experience and updates are all critical factors.
If safety and profits are opposed, jet card holders have to hope the issuer chooses safety.
BROKER VS. OPERATOR: HOW JET CARDS POSE RISKS
The risks to your safety and capital can be impacted in different ways depending on the issuer of the jet card: broker or operator.
Jet cards issued by a private jet charter broker
Here’s how it works:
1. No assets to securitize your deposit.
2. In order to offer a guaranteed rate, the Jet Card issuing broker charges a financial risk premium to ensure they can find the aircraft in the market
3. The Jet Card issuing broker fulfills your travel demand with aircraft in the same marketplace as Stratos
4. Aircraft selection may be limited by certain operational history safety criteria on the front end, but brokers make this buying decision based on the profitability of the aircraft they select for you
Jet cards issued by a jet charter operator
Here’s how it works:
1. In order to offer a guaranteed rate, operators charge a financial risk premium.
2. Because they own, lease, or manage assets, they select aircraft that fulfill their financial needs rather than expand your margin of safety.
ALTERNATIVE PRIVATE JET PROGRAMS: HOW TO LESSEN THE RISKS OF JET CARDS
At Stratos, our focus is on helping customers make the most informed decisions and maximize their safety—and among private jet programs, the best way to support those values is on-demand. We want you to have control of your safety and your money—there is a better way!
At Stratos Jets, we are agnostic towards aircraft and air carrier. Our on-demand model is always aligned with your travel goals. Our interest is to ensure a safe, enjoyable flight at the best available rate, earning the confidence of your repeat business.
On-demand private jet travel improves aircraft selection and safety
At Stratos, instead of being limited to a cabin class, customers are given full access to any size and type of aircraft on a flight-by-flight basis. That means our Private Flight Advisors can fulfill our promise of helping you make your decision based on all safety factors, not profits.
On-demand private jet travel frees up your capital and brings flexibility
With Stratos, there are:
- no upfront deposits
- no annual fees
And with the ability to choose aircraft and operator, you can make a cost-effective choice based on each flight.
We understand how corporate demand can fluctuate month to month, especially during times of uncertainty. On-demand travel gives you the flexibility to fly on-demand as your needs evolve.
As travel bans gradually lift and the list of states reopening grows, our options will grow to meet demand.
Trust longevity, especially now
Stratos has been in the business of arranging private jet charters for nearly 15 years. This longevity gives us perspective and the experience to be proactive in different climates and be able to lean on the trusted vendors who meet our strict vendor approval standards.
As Stratos CEO Joel Thomas said,
“We have been through the ups and downs of the market over the past 15 years. As consumer demand for private aviation ticks back up, we hope to build strong relationships as travelers seek reliable and efficient solutions to their private travel needs. “
Through the Stratos Marketplace, our on-demand model provides access to aircraft at the best available market rate, on a flight by flight basis. Never risk your capital with jet cards or prepaid programs.
Are you interested in learning more about how the Stratos approach gives you more control over private jet travel selection and spending? Call Stratos Jet Charters—888-593-9066.