The on-demand jet charter company, JetSmarter, got into hot water with customers after failing to deliver on promised benefits such as free seats on shuttle flights. The company, which was recently purchased by Dubai-based Vista Global, suffered a host of legal and financial troubles. In a recent article for Business Jet Traveler, Shaircraft Solutions CEO, and private aviation attorney, James Butler, discusses the limits of redress when a jet provider's service falls short.
Seemingly non-negotiable jet agreements that are subject to change at the whim of the provider, like those employed by JetSmarter, often include a clause mandating that disputes be resolved individually, via binding arbitration. While such clauses generally are upheld in the courts, multiple lawsuits alleging fraud have been filed successfully against JetSmarter, which Butler believes could indicate that some courts don’t view their contracts as valid. “If one side has the option to change all the material terms, then arguably there is no agreement.”
And while there have been whispers about a class-action lawsuit, in addition to the contract clause mandating individual arbitration, the variance among members (e.g., joining dates, flight history, membership levels, etc.) makes it challenging to combine their complaints.
Ultimately, concludes Butler, “While it may be emotionally satisfying [to sue], I imagine some JetSmarter members who think it through may determine there’s not enough potential upside to justify the out-of-pocket expenses."
The Bottom Line?
The best way to avoid these kinds of situations is to have experienced legal counsel review contracts before they are signed. Jet companies have a subtle way of making their contracts seem simple and non-threatening. Citing "boilerplate" terms, clever salespeople give the impression that jet contracts are non-negotiable. That is not the case. Shaircraft regularly negotiates jet contract terms with all of the major jet providers, and for all types of jet programs. In addition to adding significant value, we make sure that the jet company’s promises are ironclad and that you have real and workable recourse if your provider doesn’t live up to its end of the bargain.