How To Play The Surge In Private Aviation

HondaJet Elite S Serial Number 209, the next aircraft expected for delivery to Jet Token.

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Thanks to an onrush of demand from both mass affluent and more traditional customers, the sleepy, cyclical, private jet industry appears to be undergoing secular growth. 

One company that believes it is positioned to meet this demand is Jet Token Inc., a private jet membership and booking platform that specializes in the HondaJet Elite S. According to Jet Token’s StartEngine page, the company has raised close to $14 million and has signed a purchase agreement with Honda Motor Company HMC. Boasting a fleet of what the company says is one of the quietest and most cost-efficient jets, Jet Token has the enviable task of providing service to a market otherwise out of stock. 

In February 2022, the demand for private jet travel rose 15% above the previous February, marking new industry highs and creating capacity bottlenecks for key players. Records from several sources reflect a common story: too many travelers are chasing too few private jets.

Berkshire Hathaway’s NetJets Inc. (NASDAQ: BRK-B), Executive Jet Management and Jets.com have all had to suspend their Jet cards sales due to an overload of demand. NetJets, which is the largest player in the fractional jet industry, also instituted a year-long wait for their new members to fly, stating that “Light jet inventory constraints are such that additional sales before more aircraft are delivered would put our service at risk.” 

As the pandemic continues to impose difficulties on transportation-based ETFs such as SPDR S&P Transportation XTN and iShares US Transportation IYT as well as key aviation players like Southwest Airlines Co. LUV and Delta Air Lines Inc. DAL, the appeal of private aviation is not just about avoiding infection, but is also about avoiding flight cancellations.

The COVID Impact: Supply Versus Demand

Reflecting the industry’s overwhelming surge in demand is Wheels Up Experience Inc. UP’s press release. On November 1st, 2021, the company imposed a 90-day wait period for new members who have paid up to $100,000 in membership deposits, a development indicative of the capacity crunch that has affected a variety of key players in the private aviation space.

The pandemic has placed the $200 billion per year private jet industry on an upward trajectory. Many with wealth (businesses included) finally got off the fence in 2020-2021 and took their first flight. Conventional wisdom in private aviation remains that if a traveler has the means to fly private and does it once, then that traveler will do it again. This has been particularly true for both busy executives flying on the company dime and for wealthy individuals who don’t travel often but travel well when they do so. 

But what about buying a used jet? Peder von Harten, vice president of Nicholas Air, says the pricing of used aircraft has increased by 30% to 40%. Another key private jet player, Jetcraft Corp., has gone all the way to Asia to find used aircraft for its fleet.

With big manufacturers still reeling from the effects of the pandemic, supply is drastically lagging behind the explosive demand for private flights. A shortage of pilots, private jets, and general laborers provides a multicausal explanation for this deficit. 

Solving this issue may require a host of costly and timely solutions. All the while, those companies with jets in hand, such as Jet Token, may already have an advantage. 

Demonstration of the cargo capacity of the HondaJet Elite/S

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.