Ownership Options

July 12, 2021

Why a Private Jet Card Might Not be Worth the Cost

Is Owning a Private Jet Better Than Buying a Jet Card?

We’ve previously covered the differences between jet cards, fractional ownership, and chartering a business jet. Chartering a business jet is a surefire way to know exactly what you’re paying for every flight you take, particularly if you fly with a reputable charter company with transparent pricing policies.

However, fractional ownership and jet cards come with a variety of fees you may not be aware of when comparing these programs on their faces. Let’s learn why private jet cards may not be worth the cost and what your alternatives are for frequent business travel.

How Does a Jet Card Work?
A jet card is basically a membership service for private flights. When you buy a jet card, you prepay for a set number of flight hours, and each trip you take is deducted from the original total. The overall cost will vary depending on which company you book with and the type of aircraft you choose to fly aboard.

You may pay a dollar amount or for a fixed number of flight hours. For example, you may pay $100,000 or pay for 20 flight hours. Think of it like a prepaid debit card, but for private flights. For this convenience, the jet card industry does business to the tune of $2 billion in the U.S. alone, according to Forbes magazine.

Depending on which jet card you’ve purchased, you may receive guaranteed availability; when you book a flight, your jet card provider is required to find an aircraft for your trip. Other companies do not provide this guarantee. Jet card companies may also put limits on where you can travel, including domestic-only or regional service areas.

The Good Side of Jet Cards
Jet cards are convenient and can save business travelers quite a lot of time. When you purchase your jet card, you’re paying an agreed-upon price per hour of travel. This eliminates the need to negotiate or shop for price comparisons every time you fly.

And you generally don’t need much advance notice to use your jet card. While commercial flights may sell out just days before takeoff, your jet card is likely redeemable on flights with as little as four hours’ notice, depending on the company you purchased from.

The Bad Side of Jet Cards
Like all things in this world, jet cards have some major downsides. For some business travelers, these may be dealbreakers!

With a jet card you may need to book alternative travel options if:

  • Your jet card does not guarantee availability of an aircraft.
  • Your jet card puts limits on where or how far you can travel, and your upcoming trips are outside of that scope.
  • Your upcoming trip requires use of a particular jet or incurs an additional hourly cost that is not covered by your jet card.
  • Your company grows, and your jet card membership no longer covers the number of travelers within your business.
  • Your schedule requires additional flights, and you’ve already used every flight hour on your membership.

Before spending company money on a jet card for every executive traveler, you’ll want to carefully read over each contract from the jet card companies you’re considering. Look out for additional fees, limitations or restrictions on flying, expiration dates for flight hours, and any other element that might affect the convenience of your executive leaders’ travel.

At What Point Should You Buy a Private Jet?
If you have multiple executives who travel to conduct business throughout the year, the total cost of your jet card memberships will likely be quite pricey. For example, if you have 10 leaders who each fly 25 flight hours per year, and each of their jet cards are $125,000 each, you’re looking at a total cost of $1,250,000. And if any of the ten need to fly additional hours, you’ll need to pay for flights separately, or add to the jet card membership.

But many midsize planes capable of transatlantic flights cost approximately that much to maintain and operate for a single year, with between 300 and 400 flight hours.

If the cost of owning a private jet is less than the cost of purchasing jet cards for your company’s employees, then buying a private jet is likely the smarter financial choice. And when you sell the jet to upgrade to a larger or newer one, you can recoup some of the money spent on owning and operating the aircraft. It is impossible to recoup the cost of a jet card, much like how renting an apartment does not build equity in it.

Where to Buy a Private Jet
The most affordable way to buy a jet is to find a preowned jet for sale, rather than buying a brand-new one. This will help keep the cost of a business jet low, too.

When it’s time to buy a private jet, or if you’re starting to research whether it’s a smart financial decision to do so, start the process on Aircraft Exchange, the exclusive online marketplace of preowned business jets, operated by the International Aircraft Dealers Association (IADA).

Only IADA Accredited Aircraft Dealers can list used private jets for sale on AircraftExchange. Each listing goes through a rigorous vetting process to ensure accuracy and to share relevant information any jet buyer would want to know.

Shop for private jets for sale, and contact an IADA Accredited Aircraft Dealer to start the process.