4 Out of 10 Jet-Card/Membership Flyers Are Not Satisfied and Considering Alternatives.
PIA Managed Co-Ownership℠ is an Option of Choice for Many.
A recent survey by Private Jet Card Comparisons suggests that customer satisfaction has dramatically declined among a large segment of private-aviation travelers. An abundance of demand and a shortage of availability are nibbling away at the user experience for fractional owners, jet-card holders and jet-program members. The data indicate that shortcomings in service and availability are likely to drive these customers to explore alternatives. The value proposition has eroded to the point of forcing significant change.
A Tipping Point?
The survey, covered by AINonline in late February, indicates that more than half of current business-aircraft users plan to fly more hours this year than last. However, supply chain issues, labor shortages, and high demand are causing users to question whether their expectations can be adequately met. According to the article, jet card and annual membership programs typically achieve renewal rates exceeding 90 percent. But 43 percent of these survey respondents report that they are considering options.
It appears that a sea change is in the making. To understand this profound shift, it may be helpful to understand the genesis of fractional ownership, jet cards and other “time-share” private aviation options.
The Birth and Evolution of Aircraft “Timeshare”
In 1984, former Goldman Sachs executive Richard Santulli purchased Executive Jet Aviation (later renamed NetJets). Santulli, a mathematician with some experience in aircraft leasing, developed a concept that could apply partial aircraft ownership to an entire fleet of business jets, creating a completely new transformative model for private aviation: fractional ownership. The NetJets fractional jet ownership program was officially launched in 1987.
NetJets initially focused on quarter-shares in specific aircraft types, but today, shares options are skewing ever smaller, with 1/8th, 1/16th and even 1/32nd shares being offered by some fractional ownership programs. In addition to the asset investment of the share, fractional owners pay monthly maintenance fees and hourly operating fees, occupied-hourly fees for their trips, and additional incidental expenses related to the aircraft operation.
Jet cards entered the market as a form of pre-paid hourly access to private jets, which removed the asset investment portion of the equation. First developed by Sentient Jet in 1997, the concept grew in popularity. Now, there are over 200 jet card programs, and many fractional ownership providers offer their own jet card options (often with the goal of growing a jet card flyer into a fractional owner).
Fractional ownership and jet card/membership programs promise travelers on-call demand, convenience, and flexibility. However, those benefits come at a cost. Depending on the program and level of commitment, users are offered a wide array of options and perks, including these:
- Upgrade or downgrade aircraft type, depending on your trip needs (plus a prorated change in operating cost and usually an additional fee for the change)
- Flying on-demand, sometimes with as little as four hours notice
- Accommodates complex, multiple, simultaneous trips, with numerous aircraft and itineraries (again with commensurate surcharges)
- VIP access to major sporting, entertainment, and social events. Many operators offer special “in-the-club” hospitality experiences and meet-ups for events like the Super Bowl, the Kentucky Derby, the Academy Awards, and so on.
Many fractional owners and jet-card holders/members question the value equation offered by their current service option, especially when considering their increasing need to travel. So now, they’re actively seeking a better way to fly, and there couldn’t be a better time to look.
The Next Evolution: PIA Managed Co-Ownership
Partners In Aviation (PIA) was founded in 2016 with the express intent of helping clients reap the financial benefits of sharing an aircraft while eliminating the myriad problems endemic to aircraft partnerships. PIA developed and launched PIA Managed Co-Ownership, working with industry experts in aviation law, tax, aircraft management, and maintenance.
Optimal for clients flying 100 hours per year (+/- 50 hours), PIA Managed Co-Ownership is a turnkey program that matches two compatible co-owners in one aircraft, effectively splitting capital and fixed costs in half. Each co-owner remains autonomous in tax and title. The program will more than satisfy the access demands of travelers whose usage requirements fit PIA’s model.
Why Consider PIA Managed Co-Ownership?
- PIA has built a critical mass of qualified co-owner candidates that allows them to effectively match co-owners anywhere in the U.S. in any class of aircraft.
- PIA Managed Co-Ownership is comprehensive: It defines how the aircraft is owned, how it’s shared and how co-owners exit the program — every aspect of the relationship is defined, from entry to exit.
- The legal structure’s safeguards have passed the test of their clientel’s discerning counsel and gives co-owners the access, flexibility and autonomy they require.
- Co-owners are in control. As the key decision-maker in PIA’s structure, a co-owner has final approval on their co-owner match, choose which aircraft to purchase, approve the expert third-party aircraft manager and make the final call on their pilot/crew selection.
Spend Half, Stay Whole
PIA president Mark Molloy says, “We know that jet cards, membership programs and fractional ownership are the right fit for many people, especially those with modest travel needs. Our program attracts clients who want more control than what membership programs offer. Sole ownership provides that. Co-ownership does too, but it also delivers efficiencies that sole ownership can’t.
“PIA Managed Co-Ownership delivers the best of both worlds,” continues Molloy. “The efficiency of sharing and the control of owning. It’s our job to guide our clients to the right match, with the right aircraft, and help get them up and flying. We create successful aircraft co-ownerships. It’s all we do, and we do it well.”