Adobe Stock illustration by John A. Manfredo
Adobe Stock illustration by John A. Manfredo

Cryptocurrency Comes to Charter

Identifying the rewards and risks associated with paying for your flights with digital coins.

Economists who consider cryptocurrency without merit have likely never tried to book a last-minute charter flight after banking hours or paid the high credit card fees levied on a trip costing tens or hundreds of thousands of dollars. Because although the charter industry is built partly on the promise of being ready when you are, that pledge is conditional: airplanes don’t move until operators get paid, and cryptocurrency advocates say it can sometimes be the best solution for making quick, low-fee bookings. Moreover, notwithstanding this year’s collapse in cryptocurrency values, customer demand for digital currency payment options continues.

“A growing number of individuals are holding cryptocurrency and are willing to spend it, and they are ignored by many [charter] companies,” says Simona Moosar, business development manager at Ecommpay, a European e-payment processor that handles such payments for some two dozen charter firms.

The demand is reportedly driven mostly by 35-and-younger, crypto-savvy clientele, but the extent of that demand is hard to assess. Payment processors don’t make the information public, and some charter providers cite only rough uptake percentages, often without defining whether the figures represent customers or revenues. However, recent data indicates that between 23 million and 27 million Americans own bitcoin, the first and still dominant cryptocurrency.

Crypto transactions came to air charter in 2014, five years after the digital currency’s introduction, when U.K.-based retail booking platform PrivateFly (now part of Directional Aviation’s OneSky portfolio) enabled charter payments in bitcoin. In the U.S., 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,” says Monarch executive director David Gitman. “But our clients asked for this alternative and we delivered.”

Challenges to Overcome

Cryptocurrency boosters acknowledge that to gain wider acceptance, it will have to overcome challenges, starting with its association with money laundering, financing of illicit activities, and large-scale scams, as well as sustainability concerns and, most recently, the cratering of cryptocurrency values and institutions. Says Mauro De Rosa, CEO of Italy’s Fast Private Jet, which claims digital currency accounts for 30 percent of its transactions: “We are aware of the skepticism toward buying crypto. But paying with crypto is another story.”

At LunaJets, another European charter operator that accepts crypto, CEO Eymeric Segard notes that even after the recent devaluation, some customers “could still be making a profit when spending [cryptocurrency].” Meanwhile, he says, “We have seen no effect on crypto-paid charter following the recent loss of value of cryptocurrency.”

Concurrently, more U.S. lift providers are enabling cryptocurrency transactions. North Carolina–based charter, jet card, and fractional fleet operator FlyExclusive began accepting crypto payments last year for charter and jet card purchases “as another way to deliver value, convenience, and premium service for our clients,” says president Mike Guina.

Florida’s Stratos Jet Charters adopted the payment option this year—for security reasons. “We felt accepting crypto would dramatically reduce our risk versus credit cards,” CEO Joel Thomas says, alluding to the blockchain technology that provides traceability for cryptocurrency transactions.

Low Fees and Quick Transactions

Costs and speed rank among other potential benefits. Cryptocurrency payments 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 these transactions can take several hours, or even one or more business days when sent internationally.

As for transacting with a currency subject to dramatic volatility, you simply transfer the requisite amount of crypto from your digital wallet to purchase the cost of the flight in whatever currency the charter contract is quoted in—typically U.S. dollars or euros. Transactions usually take 20 to 30 minutes. As the charter provider is paid in the specified currency, it faces no risk related to fluctuating digital coin values. 

Still, some flight providers remain wary of potential risks. Last year, California’s Amalfi Jets enabled bitcoin payments for known clients, but it charges them an additional 20 percent transaction fee to “cover the volatility of the market price” of the currency, the company says.

Also, with the growing regulatory emphasis on know-your-customer, know-your-business, and anti-money laundering (commonly shorthanded as KYC, KYB, and AML) rules, concerns among payment agents persist about the adequacy of identifying the individual or organization making the payment, and the propriety of the funds. Additionally, “traditional payment institutions feel the [charter] industry is risky as it is,” comments Per Marthinsson, chief revenue officer at Avinode, and inserting cryptocurrency to the equation, he says, only creates more aversion to expanding payment options in the space. “Cryptocurrencies need to evolve further for that risk appetite to be at an acceptable level.”

Avinode, a business-to-business charter booking platform, does not support cryptocurrency transactions through its PayNode processing service, but Marthinsson noted, “Between brokers and operators for a wholesale transaction, there’s very little need for bitcoin.”

The “stickiness” of crypto transaction preference is also a question. Crypto pioneer Private Fly claims it represented 20 percent of bookings at one point, but “payments made in this way currently account for less than 10 percent of transactions,” says European managing director Marine Eugène.

Meanwhile, digital-wallet apps that allow no-fee cash transfers, such as Zelle and Venmo, are growing more popular, and if transaction limits are raised, could also provide a quick no- or low-fee payment option. Additionally, central bank digital currencies—digital assets directly backed by governments and available to the public—are now being discussed and adopted and could also serve the same purpose while perhaps inspiring more confidence.

But if you have cryptocurrency now and want to book a charter after banking hours, you don’t have to wait. Just open your wallet and go.

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