Whether you’re looking for a fixed hourly rate program, a capped hourly rate agreement, a market rate pre-pay account, or a combination of the two, it can be hard to know which option is right for you. This will help clear up some of that confusion and help you understand the differences between these products.
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On-Demand – FLY NOW REQUESTS
The simplest choice of all, albeit with fewer assurances regarding cost and availability. The customer books private aircraft on a trip-by-trip basis, negating any long-term airline commitment and enabling them to quickly switch between carriers in order to take advantage of the best deal available. This is ideal for customers who plan to fly fewer than three times per year. However, because they are waiting for the money to be transferred and agreements to be finalised, the client is more vulnerable to changes in market prices and could have an unfair advantage during the booking process. Unquestionably something to take into account when making reservations for flights during busy periods or outside of regular business hours.
MARKET RATE (pre-pay) ACCOUNTS (Market Pricing)
The most basic type of Jet Card Account, Market Rate Programs assist in mitigating contract exchange and payment delays with multiple operators. Similar to on-demand charter, the customer isn't tied to a particular aircraft or predetermined number of flying hours, and since most accounts are refundable, you can always leave the program if your plans change, which is a beneficial position to have. Traditional pre-pay accounts have the drawback that their pricing is still "dynamic" (subject to market fluctuations and availability). This means that even though you have more purchasing power than traditional on-demand clients, you won't be able to get an hourly rate guide, which makes them unfeasible for clients who need a set price per hour or want to know how many hours they will get for their initial investment.
FIXED HOURLY RATE ACCOUNTS
Fixed Hourly Rate accounts and programs, which enable the client to purchase 25, 50, or 100 hours on a specific aircraft category at a fixed price per hour or part thereof, are the opposite of Market Rate Accounts. Although they are easy to comprehend, they are typically more costly than other options because the hourly rate will include the cost of blindly positioning the aircraft to and from your destination. The airline will attempt to connect or minimize positioning costs in these situations to keep the savings. The other consideration with a fixed hourly rate is that the average running cost of a private jet reduces per hour (the second hour is always lower in cost than the first hour) so the greater the flight length, the less economical a fixed hourly program would be for the client. Conversely, shorter private flights may compare better to traditional market prices.
CAPPED HOURLY PROGRAMS (Market Pre-Pay Accounts with upper hourly rate limit protection)
The capped hourly program is a cross between a pre-pay market account and a conventional fixed hourly account. This is intended to provide the union of the hourly rate payable with the assurance of better/more affordable market rates when they become available. The customer can benefit from the best of both worlds in this scenario and is advised to collaborate with their private jet provider to get the best charter rate by providing as much advance notice as possible. Typically offered in 25-hour blocks, Jet Members can customize a program to meet your unique requirements (between 10 and 100 hours) and change the maximum hourly rate according to your flying preferences.
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FRACTIONAL OWNERSHIP (Aircraft Time Share)
Another option opposed to fixed hourly rate accounts is the possibility of owning a proportion of an aircraft in return for a fixed monthly fee. The hourly rate payable will be reduced significantly (inclusive of positioning). However, like any form of part ownership/timeshare, it is prudent to read what the account entails, namely the term duration, the monthly management fees, associated additional charges, and the forecasted rate of depreciation of the aircraft. When all is factored together the overall rates (including depreciation) may be similar to a standard fixed hourly rate.
Given the fact that Fractional ownership doesn’t allow the user to recover any costs through making the aircraft available for third-party charter, nor the ability to directly control the aircraft which may not meet your travel requirements even before the end of the agreement, it may be important to look at other options first before any substantial deposit be made.
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