Jet Cards
Is My Jet Card Deposit Safe? A Diligence Framework
Prepaying for flights means lending money to an aviation company. Two well-documented failures show what happens when that company fails. Here is how to assess the risk before you fund.
Tyler Hults
Founder & Managing Principal, TRH Aviation
In brief
A jet card deposit is an unsecured loan to the issuer unless the agreement says otherwise. When issuers have failed, cardholders and owners have discovered that quickly. This piece walks two public cases, JetSuite in 2020 and Jet It in 2023, for what they teach about deposits, then lays out a diligence framework: how to read the deposit terms, what to ask about the issuer's finances and operations, which structural protections exist, and how to size and stage a deposit so a failure is survivable. It is not an argument against cards. It is the argument for reading the paper.
Two cases worth knowing
JetSuite, 2020
JetSuite, a Part 135 operator that sold a prepaid card called SuiteKey, grounded its fleet in April 2020 and filed for Chapter 11 protection on April 28 of that year. Reporting on the filing put SuiteKey balances at a notional total of roughly $50 million, listed cardholders among unsecured creditors, and quoted the filing's expectation that no funds would be available for distribution to unsecured creditors after administrative expenses. Members were later offered a fraction of their balances as flight credits with an affiliated carrier rather than cash.
Jet It, 2023
Jet It sold fractional shares and prepaid access to a fleet of light jets. In May 2023 it grounded the fleet, citing safety concerns about the aircraft type after an unrelated incident, and within days informed employees that it was closing. Subsequent reporting attributed the closure to financial distress that predated the grounding, including projected losses, unpaid vendors, and a hangar lockout. Owners were left with aircraft they held title to, unpaid operating bills attached to them, and no program to fly them in.
What a deposit legally is
Absent specific protective language, a prepaid card balance is a contractual claim against the issuer. In an insolvency, that claim generally ranks as unsecured: behind secured lenders, behind administrative costs, alongside trade creditors. The size of your deposit, the length of your relationship, and the quality of the service you received have no bearing on that rank. Only the agreement's structure does. This is a general description of how such claims tend to be treated, not legal advice; the specifics of any agreement belong with counsel.
The diligence framework
1. Read the deposit terms first
- Segregation: is the deposit held apart from operating funds, in escrow or a trust account, with a named institution?
- Guarantee: is the balance backed by a bank guarantee, bond, or parent guarantee?
- Refundability: can you withdraw the unused balance, on what notice, with what deductions?
- Expiry: when does the balance lapse, and what does a top-up do to that date?
- Change of control: what happens to your balance if the issuer is sold, restructured, or ceases operations?
2. Assess the issuer
- Ownership and capital: who owns the company, and is it profitable, funded, or burning cash? Private companies rarely publish accounts; ask anyway, and weigh the answer.
- Fleet and certificate: does the issuer operate under its own certificate, and does it own, lease, or manage the aircraft? Each answer implies a different balance sheet.
- Vendor and service signals: trade press, pilot forums, and recent client experience surface unpaid vendors and declining service months before a failure.
- Sudden changes: aggressive deposit incentives, abrupt fleet groundings, or unexplained schedule failures are the pattern seen in past closures.
3. Ask for the structural protections
Some issuers offer segregated or escrowed deposits, refundable balances, or smaller deposit tiers. Others will negotiate them for a meaningful commitment. An issuer that refuses to discuss where your money sits has told you something.
4. Size and stage
Fund a year of realistic flying, not the largest tier the incentive schedule rewards. A deposit you could afford to lose is the only one that does not require a credit analysis of the issuer. Where the incentives for a larger deposit are compelling, weigh them against the position that deposit would occupy in an insolvency.
Operator cards versus broker cards
An operator-issued card exposes you to one company's finances and one certificate, and to its aircraft being grounded if that company fails. A broker-issued card exposes you to the broker's finances while flights are performed by operators the broker pays; if the broker fails, the operators have no obligation to you. Neither is inherently safer. They fail differently, and the deposit terms decide what you recover in each case.
The deposit checklist
- 01Get the answer to "where does my money sit" in writing before anything else.
- 02Confirm refundability, expiry, and change-of-control terms.
- 03Ask who owns the issuer, how it is funded, and whether it operates its own aircraft.
- 04Read six months of trade coverage on the issuer.
- 05Size the deposit to a year of real flying and decline the incentive to overfund.
- 06Reassess at every top-up. An issuer's condition changes; your diligence should too.
The card market includes durable, well-run programs whose deposits have been honored for decades. The point is not that cards are unsafe. It is that the safety of a deposit is a property of the contract and the company, not the brochure, and that both have to be read. The jet card agreement checklist covers the rest of the paper.
Key takeaways
- Unless segregated or guaranteed, a deposit sits in the issuer's operating funds and ranks with other unsecured creditors if the issuer fails.
- The warning signs in public failures were visible in advance: cash burn, vendor disputes, service decline, and sudden operational excuses.
- Structural protections exist: escrow, segregation, bank guarantees, refundability, smaller staged deposits. Ask for them; some issuers offer them.
- Size the deposit to a year of real flying and treat anything larger as a credit decision about the issuer.
Put this to work
Where this decision goes next — the advisory guides and head-to-head comparisons behind it.
Source notes
- JetSuite: FlightGlobal, "JetSuite files for Chapter 11 bankruptcy protection" (May 2020); Private Jet Card Comparisons, "JetSuite files for Chapter 11 bankruptcy with up to $100 million in liabilities" (April 28, 2020), "JetSuite's Chapter 11 filing reveals pre-Coronavirus challenges" (April 29, 2020), and "JetSuite SuiteKey jet card members to get 15% of balances in JSX credits" (June 26, 2020); Forbes (April 28, 2020). Figures as reported by those outlets.
- Jet It: Private Jet Card Comparisons, "Jet It outlines options to fractional owners, closing down" (May 26, 2023); SherpaReport, "Fractional Operator Jet It Closes Down" (2023); Flying Magazine, "Why Jet It Failed" (2023); Aero Law Group, "Jet It Woes" (2023). Characterizations of cause are those outlets' reporting.
- Description of unsecured claims is general and not legal advice; the treatment of any specific agreement in insolvency should be reviewed by qualified counsel.
Educational, and deliberately general. Your situation turns on specifics — routes, hours, and terms — which is what an engagement is for.