The right solutions can round out a corporate travel program’s private aviation portfolio
These days, corporate travel managers are getting mixed messages from such contradictory headlines as “Business Travelers Are Back” versus “Business Travel Cutting Back on Economy, Sustainability.” Their confusion is understandable, but one thing is certain, corporate travel is changing rapidly and buyers must adapt as they cater to conflicting mandates – lower travel costs while keeping traveler wellbeing in mind.
Corporate travel programs are already using private aviation travel strategies, according to Private Jet Card Comparisons CEO Doug Gollan. Clearly private aviation is very much a part of the travel managers’ toolbox as companies make travel more strategic. Recently, Fortune Business Insights, predicting the global private aviation market – valued at $25.87 billion in 2021 – will grow to $38.34 billion by 2029.
The reason: Airline friction and pain with grueling connections compounded by crowded airports and airplanes. An American Express study showed road warriors are seeking relief, with 71 percent reporting they’d leave a company if wellbeing weren’t prioritized while traveling. Top concerns, according to a separate GBTA survey, were flight delays and cancellations, long security lines, crowded airports, and long bag-check lines, all of which conspire to reduce employee willingness to travel.The Private Travel Portfolio
Travel managers know there is no one-size-fits-all solution to every travel requirement, so companies often rely on a combination of private and airline travel. As part of that, they use a mix of private travel solutions.
“I have a lot of subscribers who are travel managers,” says Gollan. “They are people in finance and transportation departments. My data base is 80 providers so they use me as a consulting service. Others are quite often companies who already have a fractional share of an aircraft or own an aircraft. Or their executives use private aviation for their own use and travel managers need to know what the company should bill the executive for those trips. We help them ensure they’ve done their due diligence to determine which solutions are best for them,” he explains
“It’s a portfolio,” Gollan continues. “The biggest mistake travel managers make is thinking there’s a singular solution.
Jet cards, on-demand charters and ownership are all part of the toolkit. Travel managers view it the same way as investing – different products based on risks and returns – and, similarly, jet cards are part of a portfolio. The reason people buy jet cards is because it is easy: Easy booking, easy cancellations, easy rules.”
Air Partner senior vice president of sales Jeanne Muzio agrees. “A good jet card membership program is one that is easy to use, employs a very experienced staff that is able to mitigate risk for each individual flight,” she says. “They must remain flexible to the client's needs with costs clearly laid out. At Air Partner, our JetCard is fully transparent, without any hidden extras such as landing and handling charges, de-icing fees, fuel surcharges, or high-density airport charges. With fully refundable flight hours that never expire, customers can choose how much and when they wish to travel without being forced into a use-by date. Furthermore, with round-trip discounts, a cancellation policy, and full global coverage, our JetCard ranks as the most flexible private jet membership on the market.”
Chapman Freeborn president of Americas David McCown also called private aviation a portfolio solution. “A lot of on-demand charter users are aircraft owners looking for supplemental lift for specific trip needs they can’t provide for themselves,” he says. “These solutions are not mutually exclusive.”Hedging Bets
So why are jet cards so popular? “They like the fixed hourly rates and pricing caps,” Gollan notes. “Jet cards offer budget predictability. Since the biggest role for travel managers is to manage expenses, jet cards help. They are also easy to understand for those booking travel and executive assistants. Others like the inclusive perks such as guaranteed WiFi, an expensive add on, at no additional cost.”
However, jet cards should not be seen as a money saver, Gollan cautions. “People think buying 25 or 50 hours they get a discount, but it is more like airline fuel hedging – setting a rate for future travel,” he explains. “It is also less cumbersome than on-demand charter which is a 24-hour process to get a quote, check with the principal, read the contracts, and then book. Jet cards can be as quick and easy as booking an airline reservation and getting confirmation in a few minutes. They are more about the guaranteed availability at a fixed rate. Benefits include the ability to cancel within a certain time frame, which is not always available with on-demand charter.”
McCown agrees adding jet cards may not be the most cost-effective solution. “Jet cards are just one way to buy private travel,” he says. “Jet cards and other solutions have created a lot of new private aviation users and that’s a benefit to the entire industry, but they are not the only solution. It all depends on the number of hours a client uses. If a company is a frequent user – say, for example, more than 300 hours a year – owning an aircraft starts to make sense if you are flying in an out of the same place.”
McCown also points to fractional ownership as an option in which a company owns a fraction of an aircraft, eliminating ownership headaches such as maintenance and pilot staffing. “Then there are the non-ownership models,” he advised. “That includes on-demand air charter where you contract with a private aviation operator. The benefit is there is no hefty initial up-front payment, and you pay as you go.”
Muzio sees jet cards as a convenience. “With jet cards, travelers can enjoy the perks of flying privately without the overhead costs and asset depreciation of owning aircraft,” she explains. “It is suitable for a wide range of travelers – frequent flyers, business travelers, or someone who flies a few times a year but prefers a streamlined booking process with guaranteed peace of mind.”
McCown notes the work involved in on-demand charter is frustrating for people who don’t know the industry. “Jet cards and/or private aviation memberships are another way of packaging on-demand charter which is more straightforward and consistent,” he explains. “There are limitations. For instance, you only get a certain category of aircraft which may vary the quality and you must give a certain amount of advance notice. You buy 10 hours of a certain category aircraft – light, midsize, super-midsize and heavy – but the program will package the service in a way to guarantee availability within a certain window. You have point-to-point pricing. With a jet membership the price is always going to be set unless it is a peak day which will cost more and those are outlined in the contract. That’s the benefit. You have pricing consistence for point-to-point travel.”
Jet cards, Muzio points out, also ease the workload for travel managers who get monthly statements reporting all activity. In addition, Air Partner enables travel managers to be involved in logistics as much or as little as they wish.Tailor Made?
Chapman Freeborn is exploring a jet membership program to complement its tailored private aviation solutions. “With on-demand charter, clients are very specific about their needs, not only about the size of the aircraft perhaps even down to the tail number,” says McCown. “The problem with jet cards is they commoditize a service that most people buy because they don’t want to be commoditized. They are paying a ton of money to fly private for a bespoke experience. That’s the difference between tailoring a flight to the customers’ demands and having a jet card.”
Muzio agrees that jet card programs do not typically offer the advantage of tailoring the jet type and experience to every traveler’s needs, but adds, “We allow clients to choose a specific type of aircraft using on-demand charter rates or six categories of aircraft with fixed hourly rates, with no penalty charges to interchange between them. Adding more and more members can be a critical ingredient that can be optimized based on grouping clients with similar destinations but also interfere with service and aircraft options overall.”
Private Jet Services, an Elevate Aviation Group company, has launched a different kind of private aviation service called PJS Private Client. Unlike some other models, PJS Private Client has no membership fees and no hidden costs, while offering a tailored private travel experience with dedicated account management, daily catering credit and guaranteed aircraft availability.
According to Jon Reed, chief sales officer at PJS, the service is designed for experienced fliers who are looking for consistency and transparency in booking luxury private travel. "The old paradigm, marred by hidden costs, flawed business models, and restrictions, no longer serves the refined sensibilities of today's discerning high-net-worth individual," Reed says.
In addition to providing trusted advice on travel, PJS Private Client's dedicated account management team works throughout every journey to offer a personalized experience together with customized pricing and options on each unique itinerary.
Tailoring the private travel experience is also the factor that sets Chapman Freeborn’s on-demand model apart, according to McCown. “Jet cards and other models have a solution they want you to adhere to while we tailor the solution to meet specific customer needs,” he says. “A good provider is going to know which questions to ask, what the priorities are – cost, a bigger cabin, the ability to be productive inflight, non-stop and an on-board bathroom, and luggage – are all considerations. Will the aircraft accommodate both people and luggage? Chartering has a lot more issues in the equation to provide the right solution. What are the contingencies when things go wrong, a crew member gets sick, or maintenance is required? We always work on a Plan B and work with multiple operators. That’s the value we provide.”
Air Partner JetCards have been available for 17 years, says Muzio. “Our clients have always found value in our jet card because it is designed to make flying private more convenient and accessible for both corporate and leisure travelers globally,” she says. “With the current state of air travel, there has never been such a need or demand for flexibility and reliability, and many people are looking for private flight solutions that will enable seamless travel.”
“Clients should be aware that final pricing on flights may not be what is quoted, aircraft types or dates of manufacture/refurbishment may be older than expected, availability could change depending on peak days,” Muzio explains. “Other caution points may include operators and brokers who may not properly vet all aircraft and operations used, or those who do not employ a 24/7 compliance department to oversee the operator relationship, standards and protocols. In addition to that, most groups operate ‘call center’ service versus a one-on-one relationship, which our members truly value.”
More importantly, says Gollan, is protecting the investment in private aviation which largely depends on the health of the jet card company. The answer largely depends on the financial health of the jet card company.
For example, the PJS Private Client model ensures the safety of the investment by placing the money in escrow. "A refundable minimum deposit of $100,000 is held in an escrow account with JPMorgan Chase,” Reed says. “The model forgoes the constraints of membership and interchange fees, placing the client's desires at the forefront."
Regardless of the private air provider you choose and how they operate, it pays to understand the financial implications of the business model, and read the fine print. “Similarly, you can lose money on fractional ownership programs,” says Gollan. “Unless the provider keeps your money in an escrow account you are basically an unsecured creditor. Booking on-demand charters, everything depends on the contract and if you don’t read it, you could lose money there as well.”
McCown adds his own cautionary tale. “There have been three or four occasions in my career where I’ve seen people pay huge upfront fees and the company went bankrupt. You must ask if the money is going into an escrow account or being used for operating capital and whether, if anything happens, you are a secured creditor.
As corporate and leisure travel preferences change, travel managers must adapt, and that means acquiring expertise and relationships in private aviation and all the tools that come with it, including jet cards.