The cost to rent a private jet is soaring. According to Private Jet Card Comparisons, an analysis of over 250 jet card and membership programs with fixed or capped rates found the hourly price to charter a private jet increased by 21%, from $8,405 per hour in December 2020 to $10,204 per hour at the end of Q1 2022.
More price hikes are likely, according to the website. Despite multiple price increases by providers, the fixed/capped rate charter costs are still trailing on-demand dynamic pricing, which reflects the current state of the market. The average flight cost for the fixed/capped programs was $25,744, while on-demand average prices ranged between $24,894 and $41,653.
Despite the hikes, private flying remains at record levels. Data from WingX shows that U.S. charter and fractional operators averaged 27,311 departures per week over the past two months, levels typical of the Thanksgiving and New Year’s holiday periods. Argus has predicted 2022 will continue as a banner year, projecting that every month will set new records, many of which were set just last year.
Driving the increased price of flying privately are higher costs, including fuel, maintenance, and labor, particularly for pilots, where the industry is experiencing a shortage. Some fixed/capped rate programs have added fuel surcharges in recent months.
Turboprops and light jets saw the most significant price increases. Turboprop hourly rates increased 47% from the end of 2020 and now average $6,564 per hour. Light jet costs are up 35%, with hourly rates now averaging $7,564, compared to $5,600 just 15 months ago. Midsize private jets saw average hourly rates increase 24% to $8,662 over the same period, while super-midsize aircraft increased 22% to 11,171 per hour. Large cabin jets’ pricing increased 17% and now averages $14,173 per hour.
While fixed/capped programs give customers a contracted hourly rate when they join, those prices are still trailing the on-demand market, where flights are priced trip-by-trip. In 7 out of 12 scenarios, the average fixed/capped membership flight costs were less than the market-based dynamic pricing. The fixed/capped rates overall were only 3.4% higher than the lowest on-demand prices. However, on the most expensive dates during a three-week period covering the end of April through the middle of May, market pricing was 61.8% higher than the average fixed/capped rates.
Since the jet card and membership programs that offer fixed and capped pricing have the same expenses as providers that use dynamic pricing, they will be under pressure to ratchet up rates, which they often guarantee for 12 to 24 months.
While the fixed/capped rate jet card and membership programs may be a relative deal, for the time being, providers are making the rates harder to use. Since the end of 2019, the average number of program peak days more than doubled to 49.1 from 22.8 days. On these high-demand dates, providers implement longer notice periods to book and cancel, and many have surcharges, which can range up to 100%.
Fixed/capped rate membership sellers have also increased the lead time to book flights on non-peak days. The average notice period to book flights at contracted rates is now 62.2. hours before departure, up from 23.2 hours before the pandemic.