Cryptocurrency Comes to the Charter Market

Its reputation may be tarnished in the financial and investment worlds, but cryptocurrency remains well-suited for charter transactions, according to a legion of boosters, as the digital coins’ quick, low-fee transfers and blockchain traceability make it ideal for such payments.

Many of these advocates note that despite charter’s “ready when you are” ethos, airplanes don’t move until operators get paid. And crypto transactions can be the best solution for transferring tens or millions of thousands of dollars after banking hours or avoiding high bank transfer or credit card fees.

The demand is reportedly driven by a younger, crypto-savvy clientele and facilitated by payment processors that support the transactions.

“A growing number of individuals are holding cryptocurrencies and are willing to spend it, and they are ignored by many [charter] companies,” said Simona Moosar, business development manager at Ecommpay, a European e-payment processor that handles such payments for some two dozen charter firms among its clients. The biggest advantage for providers accepting crypto payments for charter, according to Moosar: “You can actually attract a completely new clientele.”

Recent data indicates between 23.3 million and 27 million Americans own Bitcoin, the first and still dominant cryptocurrency, but data on the extent of its and other cryptocurrencies’ use for charter payments is sparse. This is because payment processors don’t make the information public, while some providers cite only rough uptake percentages. But growth reportedly continues, despite this spring’s dramatic collapse of cryptocurrency values.

“We are aware of the skepticism toward buying crypto,” said Mauro De Rosa, CEO of Italy’s Fast Private Jet, which claims the currency accounts for 30 percent of its business. “But paying with crypto is another story.”

At the time of the currency crash, Eymeric Segard, CEO of Switzerland’s crypto-friendly LunaJets, wrote in the company’s EBACE newsletter, “The crypto wealth effect may disappear as fast as it stormed our industry.” But his doubts have since subsided: “We have seen no effect on CRY[coin]-paid charter following the recent loss of value of CRY,” Segard told AIN on the eve of NBAA-BACE. Some of his customers, he noted, “could still be making a profit when spending [cryptocurrency].”

Crypto transactions first came to air charter in 2014, five years after the digital currency’s introduction. That’s when UK-based retail booking platform PrivateFly, now part of Directional Aviation’s OneSky portfolio, enabled charter payments in Bitcoin. In the US, Florida-based Monarch Air Group introduced a crypto payment option in 2017.

“Traditional transactions still account for the vast majority of our flights and will continue to do so in upcoming years, said Monarch executive director David Gitman. “But our customers asked for this alternative and we delivered.”

North Carolina-based charter, jet card, and fractional fleet operator flyExclusive began accepting crypto payments last year for both charter and jet card purchases “as another way to deliver value, convenience, and premium service for our clients,” said president Mike Guina.

Florida’s Stratos Jet Charters adopted the payment option this year. “We felt accepting crypto would dramatically reduce our risk versus credit cards,” said company CEO Joel Thomas.

Fee-wise, cryptocurrency transfers typically cost about 1 percent of the amount transferred versus credit card fees that can range from about 3 to 6 percent. Bank wire transfer fees vary and can take several hours or one or two business days when sent internationally.

As for transacting with a currency subject to dramatic volatility, customers can typically transfer and send the requisite amount of cryptocurrency from their digital wallets in 20 to 30 minutes. Processors say it arrives in the fiat currency dictated by the charter contract, eliminating any devaluation risk to the providers.

Some remain cautious. California’s Amalfi Jets, which last year enabled Bitcoin payments for known clients, charges them an additional 20 percent transaction fee to “cover the volatility of the market price” of the digital coin.

One processor not onboard for cryptocurrency payments: Avinode Group’s PayNode (Booth 4535). PayNode was launched at NBAA 2016 to offer quick e-payments among charter operators and brokers.

“Traditional payment institutions feel the [charter] industry is risky as it is,” said Avinode chief revenue officer Per Martinsson. “Cryptocurrencies need to evolve further for that risk appetite to be at an acceptable level.”

Avinode believes cryptocurrencies also “still face quite a number of issues when it comes to KYB, KYC, and AML,” he said, referring to “know your business,” “know your customer,” and “anti-money laundering” standards and requirements, respectively.

Avinode is, of course, an avowedly B2B platform that has always eschewed the retail market. And with the transfer capabilities PayNode offers, Marthinsson said, “Between brokers and operators for a wholesale transaction, there’s very little need for Bitcoin.”

Meanwhile, the long-term appetite for crypto charter payments remains unclear. At LunaJets, the payments currently “account for less than 10 percent of our revenue, but [they’re] growing every quarter,” said Segard. Conversely, while first adopter PrivateFly previously reported crypto transactions accounted for up to 20 percent of bookings, “payments made in this way currently account for less than 10 percent of transactions,” PrivateFly European managing director Marine Eugene told AIN.

At least three additional exhibitors at NBAA offer payment processing services: BHG Financial (Booth 2219); TreviPay (Booth 4513); and World Fuel Services (Booth 4800), which holds a majority stake in Avinode. AIN did not receive responses to questions about these companies’ cryptocurrency policies or plans before press time.

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