About the author: Charles Denault III is the founder and CEO of SimpleCharters.com, the leading platform for booking private charter flights. Charles is an accomplished software engineer, specializing in e-commerce and distributed systems with high-frequency data processing.
With over 12,000 charter aircraft available in the United States, and thousands more around the world, the private aviation market is incredibly diverse. Over 150,000 flights occur every month, with prices ranging from $250 to $10,000+ per hour, making private aviation one of the most versatile transportation methods available.
Private Jet Clientele
Private charter clients are not just the rich and famous– it’s quite the opposite. The vast majority of the clientele is made up of business executives spanning a variety of industries– from government and construction to finance and law. Tight schedules, opportunity costs, and the necessity for face-to-face meetings let private aviation do what the airlines can’t.
When clients book flights through SimpleCharters, or any other service provider, one of the most significant hurdles is payments. The tried and true method of the charter world is Wire Transfers. The speed and simplicity of transferring large sums of money make it a natural candidate. However, wire transfers have significant drawbacks– most notably they’re dependent on humans and business hours. Trying to book a flight last minute if the banks aren’t open?
Too bad. You’ll have to use a credit card.
Credit cards pose their limitations as well. Not only are there delayed payout schedules (which average between 3-5 days), funds have to be checked by the processor for fraud. Not only that, processing credit cards is expensive. Remarkably expensive.
Credit card processing (even with a moderate transaction volume) is often more than 2.5% of the total, which is a significant sum of money to absorb with several thousand dollar transactions. Charter companies typically pass this expense on to the client.
At SimpleCharters, we’ve earned our reputation by providing a fast, secure, and transparent booking experience for our clients. That has led us to explore and challenge every facet of the private aviation experience– payments being at the top of the list. We wanted to provide our clients with the flexibility to book and pay for their flight at their convenience, without having to consider business hours, bank holidays (especially if flying internationally), or complicated clearinghouse processes.
Enter Bitcoin.
Bitcoin and other cryptocurrencies are genuinely disruptive to the financial market. What started as a fringe way for microtransactions to occur online has evolved into one of the most efficient ways to transfer money online.
The speed and security of booking a private jet with Bitcoin starts to emerge with the confirmation time. Even as bitcoin popularity surges and transaction volume increases, a 30 minute blockchain confirmation time is minuscule compared to multi-day waits with financial institutions. Combined with using a payment processor such as Stripe to accept Bitcoin online, the entire experience becomes seamless for the customer.
This rapid transaction time, coupled with the digital nature of Bitcoin makes it ideal for international flights. Instead of paying vendors and service providers in their local currency, whether by card, check, or wire, Bitcoin payouts can dramatically improve the efficiency of the trip.
Intelligent Risk Management
Lastly, the risk of fraud is all but eliminated from the transaction. Once the private jet has taken flight, the trip is typically non-refundable. An unscrupulous customer could, theoretically, convince the credit card company to issue a chargeback (although, in fairness, most credit card companies have aviation-specific policies against this) or an ACH transfer could be declined up to 5 days later for insufficient funds. Wire transfers are typically non-refundable, but Bitcoin takes this one step further. One the transaction is solidified in the blockchain, the funds are securely in place for the provider, dramatically cutting risks.
While Bitcoin continues to see record growth and reach record highs, it remains secondary to our traditional payment methods in the eyes of our clients. We’re bullish on the future of Bitcoin as an international currency, and we view private aviation as an industry with sufficient volume and transaction size to help widen appeal and adoption.
Featured image from Shutterstock.