October 2018 Newsletter

Recognizing when a Deal is Too Good to be True

The old saying ‘if it sounds too good to be true, it probably is’ holds true in most instances. It can be especially costly to you in the field of aviation if you purchase a card service or buy into a program (membership fees) to buy a seat or seats on an as needed basis on an aircraft going to your desired location.

The concerns for the programs mentioned above are greatly reduced if you are using a long-standing company to provide for your air travel needs, but they are usually the most expensive due to fleet size and guarantees of service. These long-standing providers will provide guaranteed service regardless if they must go to third parties (at no additional expense to you) to provide coverage for your trips.  Many inexpensive programs simply cannot afford to provide guaranteed trip coverage.

However, there are many less expensive options that provide the ability to purchase a seat where you share the aircraft with others you may or may not know. As the passenger, you do not dictate departure or arrival times, nor can you choose the aircraft you prefer.

There is nothing wrong with a “per seat” program but do your homework. Several companies (even the large well-established fractional programs) early on attempted a similar business model where the operator tried to match current scheduled flights with open seats for customers, though the model was not profitable or easily achievable.  What the operators realized was that most private passengers that want to fly privately really do not want to share flights with strangers (you might as well go commercially on scheduled flights).

Both new and established companies have tried to reinvent these business models, some (few) have been moderately successful and others have failed.

How not to be disappointed in your selection of service providers:

  1. Get references (but if you get from the provider, expect them to provide only their happiest customers).
  2. Talk to friends and others you know using the service about their past experiences. There was one fractional management company that reduced their service area, increased response times, removed the guarantee of service, increased cost of services (outside of contractual terms) and then went bankrupt. In hind sight, these were all signals of severe financial strain. The share owners’ aircraft were virtually worthless after the bankruptcy.
  3. Search the internet for the company’s history, size of fleet, and current and past offerings.
  4. Also, an internet search, check their reviews, ratings and financial stability and use escrow accounts out of their full control.
  5. Hire an aviation consultant/advisor that is conversant in the options/programs offered.

As stated above, if the deal being offered appears to be great (too good to be true) compared to your other options, you need to do your research before giving them money.