One would assume the world of private aircraft defines a kind of stability – but to those who look at the creation and evolution of the jet card, the fractional jet, and leasing, the blue-sky world is ever-evolving, sensitive to the changes in the world below.
NetJets, for example, has recently announced that it is once again welcoming new clients with a new NetJets 25-Hour Lease option, built for travelers who fly 25 hours or more per year. This has been available since earlier this year, to existing NetJets owners and those forbearing people who were on the NetJets wait list. But recently the NetJets 25-Hour Lease has been opened up for those outside the wait list.
Paused Jet Card Sales
There is a narrative with this new option, and it deals with NetJets' sensitivity toward those who wanted a NetJets card, but could not access one. And why?
The company had paused jet card sales to prioritize delivery of its premium fractional and lease service to its existing customers. But, the time of this pause was during the time of Covid. And with Covid, came a growing sense that commercial airports, maskless, coughing passengers, and odiferous plane interiors may have enhanced the possibility of getting this disease. These factors drove an industry-wide increase in demand, from both individuals and businesses. This basic unexpected imbalance prompted NetJets to think again.
New 25 Hour Lease
The new 25 hour per year leases are for a three to five-year term, with a minimum commitment of 36 months. They provide 320 days per year of guaranteed access, with 45 No-Fly Days and 45 Peak Period Days on which NetJets can adjust departure times up to three hours. Pricing varies based on the type of aircraft with lease fees made up of a “Monthly lease payment”, a “Monthly management fee” and an “Occupied hourly fee and fuel”. For example a 25-hour lease for a Phenom 300 will currently total approximately $250,000 annually.
There are extra hours available for purchase at a premium each year, and there is a rollover of unused hours into the next year(s.) And lease customers need only provide 24 hours' notice for the aircraft.
The 25-hour lease is available on the Embraer Phenom 300 light jet, Cessna Citation XLS and Cessna Citation Sovereign mid-size, or Bombardier Challenger 350 super-mid.
Fleet Expansion
Lease owners may also have access to more than 800 aircraft in NetJets’s worldwide fleet, the largest private fleet in the world. This fleet is composed of a variety of aircraft types across five jet classes.
And there will be new additions: as demand for the NetJets fleet grew, they made a multibillion-dollar, multiyear investment in 175 plus new aircraft - nearly 80 of which are scheduled to be delivered in 2022. Also in 2022, NetJets is taking delivery of four ultra-long range Global 7500 aircraft. An additional six are scheduled for delivery in 2023.
The company has also been adding hundreds of new pilots and expects to have almost 4,000 pilots worldwide by the end of 2022.
And Jet Cards?
But there may remain an unanswered question: while NetJets provides new lessees access to its significant fleet, with a leasing model designed to accommodate users on demand over a period of years, with rollover hours, and with flexibility to buy more hours - what happens to jet cards?
As of late 2022, nothing yet. And the question may be moot. NetJets is cognizant of those who fly less than 25 hours a year, or prefer short term commitments, as many would like to try NetJets before making any longer-term relationships. But, as of this writing, the NetJets Card program “is limited to existing Owners for the remainder of 2022.”
Stay tuned, and we will let you know when NetJets changes its program offerings.