The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
The largest players in the private jet industry are out of planes. Major manufacturers like Bombardier Inc. (TSE: BDB.B) and Embraer S.A. (BVMF: EMBR3) each have over a year of backlog, and the fractional jet programs have given up on waitlists in favor of simply forcing new customers to wait a year or more before flying. Jet Token is taking delivery of HondaJets for fractional sale and charter in this fourth quarter of 2021 and into next year, making them one of the few remaining unrestricted games in town for a light jet fraction.
Jet Token is a private jet membership and booking platform for the ultra-modern age of aviation. The company operates HondaJet Elites on behalf of its members primarily in the Western US and arranges charters on safety vetted aircraft, globally. For the first time, customers will be able to book a private jet, a commercial airline ticket or both, all on the same itinerary, through one app.
According to the company’s StartEngine page, Jet Token entered into a purchase agreement with HondaJet for the first aircraft in a multi-aircraft deal. Dated as of December 4th, 2020, the purchase agreement represents a deal not only for the provision of HondaJet Elite aircrafts but also for the marketing collaborations between the Jet Token and HondaJet brands. Honda Aircraft Company (aka HondaJet) is a subsidiary of Honda Motor Co. Ltd. (NYSE: HMC), the world’s largest manufacturer of combustion engines.
Jet Token expects to allow those who buy 25-hour memberships or 75-hour fractions the option to sell a portion of any unused time to other app users – a new feature in the private aviation industry. This benefit helps solve the 2 problems that the private aviation market has these days: no quick way of booking a flight with transparent pricing like with Expedia Group Inc. (NASDAQ: EXPE), and an efficient marketplace to buy or sell unused time to other bidders.
The Private Jet Market
According to the National Business Aviation Association (NBAA), the business jet industry contributes $200 billion a year to the U.S. economy. The average chartered flight lasts 1.5 hours with 2 to 3 passengers, and it is estimated that the average rate of a U.S. business jet is at $5,000 per hour. That mission profile hits the HondaJet Elite’s sweet spot, and Jet Token intends to offer 25-hour blocks of time on its jets, or 75-hour, 5-year, fractional interests. Most 1-way charters include the cost of the empty return leg, so a 1.5-hour trip typically translates to 3 hours of billed time, or about $15,000. Business jet charter operators logged over a million landings in the U.S. during 2019, which equates to about $7.5 billion in overall charter revenue.
Competitors in the Space
Although the FAA lists approximately 2,000 Part-135 operators, of which many have just a single airplane, Jet Token counts roughly 35 competing programs, but the biggest include Berkshire Hathaway’s NetJets Inc. (NASDAQ: BRK-B), Vista Global, Wheels Up Experience Inc. (NYSE: UP), FlexJet and JetLinx.
Jet Token Identifies a Competitive Advantage
- The company has a supply of aircraft in a period of excess demand and a strategic relationship with an aircraft manufacturer, HondaJet.
- With blockchain technology, it offers members an alternative to sell air time they might not need if their travel requirements change after paying upfront for an expensive membership.
- The coming version of the app is planned to combine private and commercial travel on the same itinerary. Today the app offers private travel for both iOS and Android.
- By being blockchain-payment-compatible, it caters to the tech-savvy who have created over a trillion dollars of wealth in the past decade and who expect merchants to make payment systems more compatible.
Jet Token believes its unique business model with blockchain, an internal marketplace for the sale of unused time credits, and offering a single app for commercial and private travel sets it apart from other travel companies.
Though, in today’s high demand market, simply having a supply of HondaJets may be the only thing they need. October of 2021 was the busiest month in the history of private aviation.
Because we mentioned the StartEngine page of Jet Token Inc. we are required by law to share the following disclaimer: The Jet Token Inc. Reg A+ offering mentioned in this article is made available through StartEngine Primary LLC, member FINRA/SIPC. Please read the Offering Circular and its Risk Factors disclosure before investing. This investment is speculative, illiquid, and involves a high degree of risk, including possible loss of entire investment.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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