The Hidden Fees in Jet Cards: Are You Paying for Someone Else's Repositioning?
June 21, 2024
Jet cards have gained popularity as a convenient and flexible way to access private air travel. However, beneath their seemingly straightforward pricing structures, there are hidden fees that can impact your overall cost. In this blog post, we’ll shed some light on one such fee: repositioning costs. By gaining an understanding of what repositioning is and how it affects jet card pricing, you can empower yourself to make a more informed decision when it comes to your private air travel arrangements.
What Exactly is Repositioning?
Repositioning in private jet travel refers to the process of moving an aircraft from one location to another in order to accommodate a specific flight request. Repositioning often occurs when the departure or arrival location differs from the aircraft’s home base or when the requested route is not common. Repositioning may involve flying an empty leg or relocating the aircraft to a specific location to meet the client’s travel needs. It usually involves added costs due to flight time, fuel, crew expenses, and other logistical factors associated with moving the aircraft. These costs are often passed on to the customer, resulting in higher fees for flights involving repositioning.
Buying Low and Selling High – How Jet Card Companies Make Money
Essentially, jet cards function as a bet by the jet card company that they can sell high to customers (when they sell them the jet card membership) and buy low in the future (when the customer books a flight). When the flight is booked, the cost charged by the flight operator is based on the total flight time, including any repositioning fees incurred. A common route like New York to Miami has minimal to no repositioning costs because the jet card company can easily find an available plane that starts and ends at those destinations. A less common route, like Portland, Maine, to Valdosta, GA, will probably have significant repositioning costs since the plane will likely need to relocate from New York, Boston, or some other common hub.
To account for these higher-priced routes and to ensure profitability, jet card companies employ a strategic approach. They adjust their overall rates to compensate for the higher repositioning costs incurred on less common routes. They bet on making up losses on less common routes like Portland to Valdosta by charging higher rates for more popular routes like New York to Miami, where repositioning fees are minimal or non-existent. Understanding this strategy can help you navigate the world of jet card memberships more effectively.
The Take Away
While jet card memberships offer convenience and the assurance of fixed hourly costs during your actual flight time, it’s crucial to grasp the potential financial implications of hidden fees, particularly how repositioning costs are factored in. If your travel routes are fairly common, you may find yourself unknowingly shouldering the burden of repositioning fees assessed on less common routes taken by other jet card members and spread across all members within the jet card membership base. This means that you are likely subsidizing less common routes and potentially overpaying for your flights to cover the costs for those less common routes.
When evaluating jet card memberships, it’s essential to understand how jet card membership fees are structured and determine whether your needs would best be served with a jet card membership or if an alternative travel arrangement would be a more cost-effective option.
