Are You In? Private Aviation And Jet Token Quietly Boom In The Pandemic

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Jet Token is one of two options for the public to buy shares in a pure play private aviation company and to get behind the COVID related private travel boom. At the time of this writing, Jet Token still has fractional shares available for sale.

Twenty five years ago, the average private jet buyer was concerned about having the biggest jet (biggest yacht, etc). Today, the average private jet buyer simply wants a way to reliably skip the commercial airport and reduce exposure to COVID.

The demands for remote job opportunities, telehealthcare services, and to-your-door delivery services, among many others, have exploded, incentivizing corporations to build infrastructures that cater to these needs. While demand for some of these services may regress to pre-COVID levels, private aviation is classically a very hard habit to break if one has the means to continue.

In the airline industry, the desire for private flights has seen overwhelming growth. According to WingX, an industry-leading business aviation intelligence firm, “the global market has seen a 31% increase over the first half of February, and a 15% increase year-over-year. 

One startup, Jet Token, states that it has raised $14,000,000 from 30,000+ investors to help break into this booming industry. Having signed a purchase agreement with Honda Motor Co. HMC for the purchase of its HondaJet fleet, the company is aiming to pair high-quality private jets with a blockchain-integrated platform that allows consumers to sell their unused flight time to others.

Jet Token also plans on becoming a sort of “Expedia” or “Travelocity” for the private jet industry, noting on its StartEngine webpage that “no reliable portal for private air travel exists today with prices as transparent for commercial airlines.” 

Covid’s Supply-Chain Crisis

Warren Buffett’s recent $2.5 billion capital spending allocation to NetJets Inc. perhaps best exemplifies the world’s revitalized interest in the private jet industry space, but it also highlights a pertinent problem: a global deficit of private jets. 

A pandemic-borne supply deficit has swept across a multitude of industries, and the private jet industry was not spared. This shortage is multifaceted: pilots, private jets and general laborers are all below the requirement needed to meet the booming demand. This situation forces some market players to dive into distant territories in search of inventory and to purchase inventory at high premiums. 

There are about 14,500 private jets in the US, where 80% of all private jet hours are flown. Roughly 11,500 jets are privately owned and not available for public use. That leaves about 2,000 jets available for charter and 1,000 in fractional programs. Even at full production capacity, the global private jet industry can only generate about 800 new planes a year across various sizes.  With millions of new private flyers coming to market it’s no surprise that private jet manufacturers are sold out through the third quarter of 2023, with the backlog only rising. 

According to the International Aircraft Dealers Association (IADA), only about 5% of the world’s private jets are up for sale, down from the 17% that’s typically on the market. Peder Von Harten, vice president of Nicholas Air, says the pricing has increased 30% to 40% because of the supply-demand deficit. Another key private jet player, Jetcraft Corp., has gone all the way to Asia to purchase aircraft.

Aviation analyst Rolland Vincent says that “there are virtually no young pre-owned aircraft available” — good news for would-be sellers and plane makers like General Dynamics Corp. GD and Textron Inc. TXT — and for private jet operators with aircraft on hand.

A Potential Advantage? 

Because of Jet Token’s existing agreement with HondaJet, the company has a supply of aircraft today, alleviating at least some of the need to purchase private jets at a premium cost. 

While there’s no clear consensus on when supply will finally catch up to demand, once this discrepancy does vanish, Jet Token’s integration of commercial and private flights on their platform might help customers find cheaper flights. 

Going Forward

Marquis Jets, a private jet company that catered towards this demand in the early 2000s, could be a testament to just how fast players in this industry can grow. In just 3 years, the company realized a $240 million ascent in revenue and is now a Harvard Business School case study.

But the current problems facing the industry, as well as the uncertainty of the business world, blur the lines on what entrants such as Jet Token can achieve. 

What can be said is that by using its blockchain-powered platform and HondaJet products as ammunition, Jet Token hopes to become a front-runner in the private jet industry. 

Jet Token is one of two options for the public to buy shares in a pure play private aviation company and to get behind the COVID related private travel boom. 

Disclaimer: While Jet Token may plan to begin preparing for a public listing, we have not taken any additional steps toward a public listing beyond reservation of the ticker symbol, and there can be no guarantee that such an offering will take place. Even if the company is publicly listed, there is also no guarantee that an active market for trading shares will develop or be sustained.

The ongoing Reg A+ offering is made available through StartEngine Primary, LLC, member FINRA/SIPC. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. You should read the Offering Circular and Risks related to this offering before investing.

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For more information you can always reach a live US based Jet Token Inc. representative 24/7 at 1-866-694-0014 and be sure to visit https://www.jettoken.com/investors.

Photo Credit: Jet Token