Is the End of JetSmarter in Sight?
It sounded like the natural next step in the new rideshare economy: a private jet service where status-conscious flyers could get unlimited access to their own planes for an annual subscription. Industry analysts freely bandied about comparisons to Uber and Netflix, and the startup attracted the likes of A-list investors like Jay-Z and the Saudi royal family, earning a $1.6 billion valuation. Meanwhile, top influencers including Kim Kardashian declared themselves smitten. It was supposed to be the future of flight, offering luxury travel made affordable by 21st-century know-how, and it had the name to match its promises: JetSmarter.
That was 2017. Today, the company, which operates out of the Fort Lauderdale office that then-Florida Gov. Rick Scott himself cut the ribbon for, is reportedly on sale for as little as $20 million.
“People in the industry are already calling it the Fyre Festival of aviation,” a source told the New York Post this week.
When it began in 2012, JetSmarter was a much more modest venture, selling seats on charter flights that would have otherwise gone empty — though passengers had to travel at the whim of whichever charter operator they were stuck with for a flight. In 2015, the company decide to up its game, transforming itself into an aspirational service that enticed new customers with the promise of rubbing elbows with the glitterati — Jamie Foxx, DJ Khaled, Emily Ratajkowski — while establishing stable routes between the homes of the wealthy and beautiful, like New York City, Los Angeles and Miami. The company hit over 10,000 members, and CEO Sergey Petrossov was touted as the Mark Zuckerberg of commercial aviation. JetSmarter was now a business that people talked about.
And, at least at first, paid for. The original subscription model would've been familiar to anyone with a Hulu or Amazon Prime subscription: After an initial buy-in of $2,000 (later $2,500, then $3,000), customers could sign up for a $5,000-to-$15,000-a-year rate that gave them supposedly unlimited access to seats, the ability to charter whole jets for no additional cost, free meals and helicopter rides to the terminal, and more.
Starting as early as 2016, though, people started to notice fraying around the edges. Out went the complimentary chopper rides and luxe meals (which now came with bills in the hundreds of dollars). Clients could no longer charter entire private jets for no extra charge. Flying around holidays became more expensive. And the rates began to climb.
In online forums, clients began to use the phrase "Ponzi scheme" — a criminal enterprise in which money from new customers is used to pay benefits to earlier customers to create the illusion of profitability — to describe what they felt they'd gotten themselves into, while the company began using draconian means to tamp down growing reports of discontent, including charging reporters $2,000 for flights if they didn't write positive stories within five business days.
(Petrossov and JetSmarter postponed and then canceled a scheduled interview with a reporter for TPG.)
Still, they couldn't quiet skeptical analysts who began doing the math, pointing out that the operating costs of the flights JetSmarter claimed to be running far outweighed what it could be making. Former employees told CNBC that the company was burning through cash; just meeting subscribers' demands cost $5 million per month.
Petrossov and JetSmarter reps wrote off the complaints as unfounded, arguing that supposed signs of trouble were merely growing pains as the company made tweaks to better serve a changing customer base. In summer 2018, the company said it was expecting to make $300 million for the year, and insisted everything was rosy just months after dropping what was arguably its major selling point, unlimited private flights, in favor of a pay-per-flight model.
The changes didn't sit well with longtime clients, and the company now faces over a dozen lawsuits, with customers claiming JetSmarter's sales team lied to them about what they were getting and that the company piled on a fortune in charges that they were never supposed to face. Contractors and former employees aren't happy, either, and have sued for money they claim the company owes them. To make matters worse, the Federal Aviation Administration and Federal Bureau of Investigation are now asking questions about the company. According to CNBC, the FBI asked about its "financials and business practices." JetSmarter said that it has never been the subject of FBI investigation, and that it is "not governed" by the FAA.
If the reports of a buyout are correct, it could mean an end to some — but definitely not all — of JetSmarter's troubles. The rumored purchaser would be a Dubai-based company called Vista Global, which formed only last September to buy up California-based private-jet operator XOJET. Vista Global's mission may sound familiar: to offer premium flyers instant on-demand charter flights.
This story has been amended to include a statement from JetSmarter that the company is not under FBI investigation.
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
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- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.