NetJets, one of the first private jet providers to put a halt on jet card and membership sales, says it is planning a restart during the first half of next year.
The news came in an email to customers and prospects yesterday, which was also posted on its website. The unit of Berkshire Hathaway said it is hoping for a “return to selling our full product lineup by Spring.”
A spokesperson for the world’s largest private jet operator declined to discuss timing or specifics, except to say the intention is to begin selling jet cards again during that period. It currently has a waitlist of over 2,000.
Eric Martel, president and chief executive officer of Bombardier Inc., left, and Patrick Gallagher, … [+]
NetJets had been putting a damper on sales since May, when it implemented the first of two price hikes over a short span.
In the world of jet cards, it hadn’t been unusual for pricing to remain flat for years at a time. According to an analysis of more than 675 programs by Private Jet Card Comparisons, a website where I am editor, jet card hourly rates are now up 5.6% in the past 90 days and 9.5% since December 2019, prior to the pandemic.
Since June, demand for private jet flights has spiked to record levels. In July, Argus TraqPak predicted private aviation would emerge from Covid-19 up to 10% bigger than before. Fresh data from WingX shows U.S. fractional, jet card, and charter flights 44% higher than 2019 levels over the same past four weeks in 2019. Markets like Florida are seeing flying levels more than 60% above pre-pandemic rates.
After trying to stem demand with price hikes, NetJets pulled its Classic jet cards in June. Those cards allowed customers to book flights with as little as 10 hours’ notice. While priced higher than its Elite cards, there was no surcharge on peak days. It also switched the 25% surcharge for peak day travel on Elite cards to a total blackout for booking flights on the 45 peak dates
By July, NetJets had stopped selling jet cards, fractional shares and leases on its entry-level Embraer Phenom 300 and Cessna Citation XLS models.
While the moves only impacted new customers and renewals, by August, it was clear the industry was suffering from a combination of strong sales outstripping capacity being hampered by labor shortages and supply chain issues. That’s when NetJets and its aircraft management arm, Executive Jet Management, which is used for overflow flights, both said they were halting all card sales. In fact, NetJets said it couldn’t guarantee renewals for current customers.
In the end of the year letter, NetJets noted the large and small Covid-related changes; it has to fly in catering on inbound flights. According to several executives, in smaller markets, pre-pandemic providers either shut or are now focused on retooling their businesses to serve the local market and have discontinued private aviation provisioning.
NetJets will add 55 new aircraft this year and 75 more next year. So far, it has added 630 new staff, including 300 pilots, and continues recruiting, according to the message.
Other providers such as Directional’s Sentient Jet and Flexjet, Jet Linx Aviation, Solairus Aviation, Airshare and Priester Aviation that stopped taking new customers are still mainly on the sidelines. At the same time, there are around 40 companies selling jet cards that offer guaranteed availability, with fixed or capped rates, including Vista Global’s VistaJet and XO, Wheels Up Experience, FlyExclusive, Nicholas Air, Alliance Aviation, Magellan Jets, Air Partner and Jets.com, which initially stopped, but restarted several weeks later.
Rivals say they don’t believe NetJets has the capacity to begin resuming card sales soon. They say NetJets is still in the market, buying large amounts of flights off-fleet to accommodate its current customers. During the holidays, NetJets Europe loaned 15 jets to the U.S. side to help satisfy demand. The email said NetJets is operating 30% more flight volume than before the pandemic.
“They are losing hundreds of customers every month who won’t be coming back. This is just an effort to keep them on the hook,” claims an executive at another card seller.
For its part, NetJets used the end of the year message to slam other providers. It wrote, “Because most of our competitors don’t have our level of financial security, some are dropping their rates or creating new incentives to generate short-term cash despite short industry supply and record demand. Others have been forced to increase hourly rates, extend daily minimums, and require greater advanced booking notice. While this will help them manage demand, it does so at the expense of their customers.”