Monday, 6 April 2009

Private Jet Charter FAQ

Why would I charter a private jet?

Private jet charter offers a safe, secure, discreet and surprisingly cost effective method of transportation from point to point in a more expedient manner. Clear benefits include that you can…

- choose airports which are closest to your origin and destination
- choose flexible flight times to suit you
- travel through smaller, quicker private terminals, save hours on airport formalities
- conduct confidential business without being overheard by other passengers
- enjoy a more flexible baggage allowance, especially on larger private jets
- enjoy catering tailored to your preferences

How do I choose the most suitable aircraft?

There is a huge amount of choice in the private jet market. Private jet manufacturers (e.g. Cessna, Gulfstream, Bombardier, Dassault and Embraer) have all created a variety of models which which cater to very different requirements. Factors to consider are:

- number of passengers: obviously the number of passengers dictates the number of seats required

- how much baggage: things like skis and golf clubs won’t fit on some smaller jets. Longer trips can mean more baggage. You need to check that this can be accommodated. A good air charter broker would be able to advise you how many suitcases can be carried.

- range of aircraft: private jet capabilities vary from a couple of hours for short haul flights to 13hrs non stop intercontinental operations. Accepting a fuel stop on a longer flight can keep the price down. Seek advice on this.

- position of aircraft: choosing an aircraft based or positioned close to the start or finish point of a trip minimises positioning or “ferry” flying and therefore keeps the cost down. Again, a jet charter broker would be advised of latest availability and could find the best deals or even the occasional “empty leg” where you are only paying for a one way flight

- do you require sleeping capacity? Most transatlantic capability aircraft have 9-14 seats that can convert to 4-6 beds. Important for a long or overnight flight. Also, check about cabin dividers. If you have a VIP or even a child on board, a closeable hard cabin door may be important for privacy!

- is there an onboard toilet? Some of the smaller light jets either do not have a toilet or have an “emergency toilet” with a privacy curtain only. Not one for travelling with the boss!

Aren’t small planes less safe than big ones?

No – executive jet operators adhere to all the same strict safety and security regulations as major airlines. A good air charter broker would be regularly appraised of the latest airline blacklists and check all operator / aircraft / crew / maintenance documentation prior to each flight to ensure all is in good order. Executive aircraft are just as stringently tested as any airliner and typically operate less flying hours per day than a commercial airliner would. Crew are usually very experienced and have often progressed into executive aviation from airlines and so have many flying hours on their license.

So the passengers won’t need to check in with lots of tourists, right?

That’s right – most airports have executive / general aviation terminals (called Fixed Base Operators or FBOs in the USA) where passengers travelling on private jets will check in and go through the usual security formalities such as baggage x-ray screening and passengers passing through metal detectors. In most circumstances, passengers can report 20 mins prior to departure time and arrival formalities can take as little as 5-10 minutes. That’s a huge saving of time in airport formalities. Most major airports in Europe / USA and many other major cities will have a comparable facility.

Isn’t it really expensive and therefore only for rock stars and the like?

Not necessarily. Add the priceless factor of flexibility to travel at times to suit you, from the airports closest to your origin and destination, and with greatly reduced airport check in times etc, the saving is very real. That’s why many a busy rock star has worked out that chartering a private jet is actually quite often both cost and time effective.

What about the environment?

You might take the view that 6 people on an aircraft is not very environmentally efficient. Obviously a small jet uses much less fuel than a large airliner. Executive jet manufacturers are also at the cutting edge of engine technology in terms of producing quieter engines which emit less. Furthermore, many operators and brokers also now take place in carbon offset or other environmental causes. A good air charter broker could also advise on mitigating the environmental impact of your charter by locating aircraft which are closely positioned to the origin and destination of the trip which reduces empty flying, which also saves money.

My boss flies a lot. Shouldn’t he just buy his own plane?

In most circumstances, no. If your boss flies a lot, especially in different parts of the world, then charter remains the best option as it reduces empty flying and enables you to take advantage of the best deals on the market at the time. Also, an aircraft is a depreciating asset with large upfront lease rental or purchase costs, maintenance and crew retention costs. When you charter an aircraft you pay only for use of the aircraft for the time that you fly it. The only potential additional costs (depending on region) could be passenger taxes, extra VIP catering, aircraft de-icing and these should be spelt out to you at the quote stage. If you’re not sure then ask what is included / excluded.

What about fractional ownership or jet card schemes then?

Same as the above – upfront costs apply and require you to make a minimum commitment of hours on a certain fleet operator. For fractional ownership, a client buys a “share” of a plane with the cost proportionately pro-rated from the full market price of a new aircraft. You then pay for monthly management fees to cover crew retention, maintenance etc. And then you pay an “occupied” hourly operating fee. Jet card schemes offer a smaller commitment such as a number of hours rather than a large share. With charter you pay solely for what you use with positioning / ferry costs, all operational fees and charges, crew, catering, fuel base etc explicitly quantified.

Minimum upfront investment for fractional ownership is typically USD $500,000 and for jet card schemes, this figure varies but typically starts at around $100,000.
Fractional / jet card schemes often have blackout days and peak travel days when you cannot fly or you must book your trip several weeks in advance. These are typically national holidays or events such as the Super Bowl, Formula One motor racing events or similar, that create a crush on demand and then the fractional / jet card companies can impose financial penalties or ask for extended notice periods from their clients.

Your requirements may change in terms of geography or group size which means that fractional ownership / jet card hours schemes are often inflexible and thus unsuitable. You would then have to pay surcharges to increase the flexibility in terms of aircraft size or area of operation – ie from USA to Europe etc or pay for a subcharter.

At the end of a fractional agreement, the client sells the shares back to the company at market value minus a “remarketing” fee of approx 7%. Furthermore, residual and resale values of aircraft are falling all the time at the moment and charter operators are hungry for the work and hence open to negotiation.

“Typical” figures speak for themselves, prices prorated, all costs such as capital cost, year 5 residual value (70%), remarketing fee, fuel surcharge, monthly management fee, as of Dec 2008:

Well known fractional ownership programme - 50 hrs on Citation X: $11,626 ph
Well known jet card scheme - 50 hrs on Citation X: $12,144 ph
Typical charter price Citation X $5,000 ph

There has never been a better time to charter.

Why would I use an air charter broker? Shouldn’t I just go direct to an operator?

A jet charter broker can add several real advantages. As a repeat client of the operator, brokers will already have purchasing power that will equate to a discount of anything between 5-20% which clients can benefit from. A good broker will also give impartial advice as to the most suitable aircraft in terms of size, position, range etc.

They also act as a single point of contact at all times from quoting the trip, preparation before a trip, flight following during the trip and post flight accounting. That certainly keeps it simple and when you are looking after VIP passengers, it’s best to work with an experienced broker who can make recommendations also on service and experience and will carefully vet the operator for operational and service standards and that kind of expertise is vital.

© 2009, Julie Black, Chapman Freeborn Airchartering