UK banking laws – the new 4-day hold on suspicious payments – a problem to consider for the air charter industry?

The grotesque question of asking where the funds are after a booking is made is never a welcome call to make or receive, but could it become a more frequently asked question?

With UK banks now able to hold funds for up to 4 days, it may be worth considering what impact that may have on your specific needs, especially if you only charter occasionally.

Being cynical, we suspect the banks may have reason to flag any large payment for ‘chartering services’ if you have a sporadic need – remember if they hold the payment for up to four days, you could well be in a position where funds may not be released before the day of departure, or paying again from another account, as most airlines will not release the aircraft until funds are received.

Is there any way to protect yourself from these specific troubles that may lie ahead? Obviously, if you plan trips well in advance, but even bookings made over the weekend could extend this hold from 4 to 6 days, you could still face this issue.

So is there a simple fix, and what about short-notice trips?

You could request credit or make a credit card payment – but this will involve credit checks and likely a charge for convenience, especially with the high interest rates.

You could give additional warning to the bank of the planned payment; whether they take the advisory may still, however, remain out of your control.

Investigating a pre-paid account may be a better fix — provided funds are available on your account, therefore bookings can be made within a shorter timeframe, or even just hours before without concerns of delays from the bank – it also empowers your position when negotiating with the airline(s).

Our prepay accounts are refundable so any deposited funds used can always be returned.

Could these banking laws be a problem for the industry?

As with any change it is best to be vigilant, in some extreme respects this change could be used as an excuse to perform services on credit without the intention of payment for short-notice flights, increasing potential fraudulent flights.

It could also upset the Empty Leg markets with last-minute ad hoc deals (non prepay accounts) being tied up as well.

To summarise, as we adapt to this change, if the question is to be asked more frequently; “Where are the funds?”, so be it, but please don’t take offence.

We wonder what the world of Cryptocurrency is on this...

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If you're considering flying privately for your next trip, at Jet Members, we would be delighted to help. Our Account Managers can advise you on local airports, flight times, aircraft options and sustainability considerations. Feel free to give us a call on +44 1932 961 465 or email us at request@jetmembers.co.uk