We’ve noted previously the variety of programs offered by fractional provider Flexjet. Flight Options has also become more aggressive in reconfiguring its fractional ownership and membership program, which the company calls JetPASS Ultimate Travel.

JetPASS Ultimate Travel

We’ll start with the card program. Flight Option’s first stab at a fractional membership program resembled a me-too of Marquis Jet’s popular format. This past year, they’ve changed the model from the familiar flight-hour plan (buy a 25 hour card for a specific plane) to a more flexible debit card model. They’ve also reconfigured their pricing – it’s more complicated, but boasts a lower “rack rate” on flexibly scheduled flights.

But wait -- there’s more. To understand peak vs non-peak, take a look at this schedule:

There you have it. Instead of a single “deduct your flight time” model, there are 24 different price points and three different schedule patterns. More significantly, the lowest fares are $3,300 per hour for light cabin and $7,375 for large cabin, which are turning heads and adding clients for Flight Options faster than ever. For travelers with schedule flexibility or cost constraints, this is definitely worth exploring.

Fractional First

Flight Options’ fractional ownership program has also just announced their Fractional First program, which they claim brings “transparency and increased value” to their clients. The program attacks the jet fuel surcharge controversy head-on, among a number of other benefits:

• “Flexible use” – clients may opt for either the traditional pricing option or the new flexible use plan. Under the new play, owners may fly 80-120% of their hourly allotment without borrowning or carryover. This is handy for owners who are unsure of their annual needs. Your monthly, hourly and fuel fees will be based on actual hours flown, so your monthly maintenance fee would be based on 80% usage (the minimum), then marked up pro rata for additional hours. Under this plan, a 1/16th share owner could fly 300 hours over five years, rather than the typical 250.
• No taxi time – though clients will still pay for taxi time, it will not be deducted from clients annual hour allotment
• Efficiency bonus – the hourly rates for longer trips are discounted 20%. Trips must be greater than 2.5 hours (or just 2 hours for light cabins) to qualify. This discount does not appear to apply to annual hour allotment; just the OHR fee.
• Transparent fuel charges – based on the actual price that Flight Options pays for the fuel. The wording of this benefit implies there may be some cost-based upcharge, but that it will be transparent.
• Extended service area – repositiong costs are limited to fuel costs

The Fractional First program is automatically included in all new shares. For current owners, it’s not a slam dunk. Signing up for these benefits may revise some of your existing terms in the wrong direction. Your contract will be updated with more current hourly and monthly fees, and you will likely lose legacy bonus deals such as short leg waivers and upgrade hours. The term and expiration date of your contract will remain unaltered.

Flight Options has some additional programs. Departure Options allows owners to volunteer flexibliity in their cabin size, departure time or date in exchange for a 15% discount in hourly fees, fuel surcharge and flight-hours used. There’s also a Buy 25/Lease 25 program which allows you to create a 1/16th share by buying 1/32 in one plane and leasing 1/32 in another plane. Flight Options has experimented with other discounts and incentives over the years, looking for a formula that encourages efficient client travel habits and delivers profitability to the company.

Flight Options fractional ownership and JetPASS Ultimate Travel programs illustrates a marketing struggle currently underway in these formats: simplicity vs efficiency. For jet providers, there are substantial benefits to encouraging flyers to plan ahead, fly efficiently and stay flexible. Peak demand for aircraft, a major cost driver, can be mitigated by getting flyers to steer clear fo popular travel days, or at least be flexible by four hours, eight hours or two days in their timing.

To encourage this behavior, companies are tempted to create fees, discounts, incentives and penalties. While these are often welcomed by flyers (who doesn’t like a discount?), the overall impact is that it complicates the picture. This undermines one of the key benefits of fractional and card travel: the simple “pick up the phone and a plane shows up” proposition.

It’s an academic point. Though leader NetJets has been reticent to add efficiency programs to its plans, all other providers are increasingly willing to experiment. The cost savings are irresistible for both client and provider, and we expect to see more in the next year. While the long term benefits are appealing, it makes your initial decision process a bit more difficult.