There’s good news for those of you who fly privately – or are considering it. The cost of flights via jet cards and memberships that offer guaranteed availability and pricing continues to drop. Moreover, more buyers are able to negotiate free hours and flight credits from providers. It’s 180 degrees from 2021 and 2022 when prominent players such as NetJets, Sentient Jet and Jet Linx shut off sales to new members, and in the case of the Berkshire Hathaway unit, even stopped renewing existing jet card clients.
A Public Year For Private Jet Flight Providers
01.01.2024 - 21:07 / forbes.com / Warren Buffett / Elon Musk / Bernard Arnault
In a somewhat ironic storyline, as high-profile private jet owners like Bernard Arnault, Elon Musk, and Mark Cuban fretted about keeping their flights off the radar, a flock of private jet flight providers invited skeptical eyes to take a closer look as they chased IPOs.
So far, it hasn’t been pretty when it comes to the bottom line. Still, the companies have continued to find customers, often by offering different twists on traditional fractional and jet programs, plus lower prices. Over the course of a year, their plans can mean six-digit savings, significant money even for flyers with eight-digit net worths.
Last year Surf Air, Jet.AI, Volato and flyExclusive all launched on public stock exchanges.
Set Jet, which offers seats on private jet flights, was expected to merge with a special purpose acquisition company, or SPAC, and become publicly traded. However, its meeting of shareholders to approve the deal has now been postponed twice. Its IPO could still happen in the next few weeks.
The others joined Blade Air Mobility and Wheels Up Experience, both of which went public in 2021.
In terms of getting a glimpse of provider financials, add Vista Global to all the above.
Its $500 million bond provided over 500 pages of data on rates and membership numbers. As reported by the Financial Times, it revealed increasing debt and net losses in 2020, 2021 and 2022. Significantly, the company had taken in eight times as much money for future flights – jet card sales – than it had cash on hand.
Vista’s Chairman Thomas Flohr responded that the flight provider he founded in 2004 was profitable on an EBITDA basis. The losses are based on how he chooses to depreciate the aircraft, he said.
As to that deferred revenue, he argued that the numbers from its bond offering, which sold out in hours, were hardly a red flag. It simply showed cash on hand for a specific date. With his owned fleet model, the reason for amassing so much debt, his cost to fulfill those prepaid flights is less than a 25 cents on a dollar. In other words, nothing to see here.
While other flight providers such as NetJets and Jet Aviation are part of publicly traded companies, Berkshire Hathaway and General Dynamics, respectively, neither break out their financials.
That doesn’t mean we don’t get glimpses.
In 2009, Warren Buffett wrote in his letter to shareholders, “In the 11 years that we have owned the company, it has recorded an aggregate pre-tax loss of $157 million. Moreover, the company’s debt has soared from $102 million at the time of purchase to $1.9 billion in April of last year.”
Fifteen years later, the late Charlie Munger told attendees at Berkshire’s annual meeting “NetJets has been remarkable. You can argue it’s worth as much as any
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