The expense of Jet Charter must be evaluated against
the trip at hand. How many passengers are going, and how does
the cost compare to other forms of travel? What is the savings
in time, lodging, ground transportation, and gained business
opportunity? Jet Charter can bring all the advantages that
air travel is supposed to offer- rapid transportation with
real convenience and service. When you really have to be somewhere
in a hurry, it is worth every penny.
Aircraft are usually chartered by the
hour, with rates varying according to many factors. Hourly
rates are figured against the time an aircraft is actually
in the air. A strong tailwind, therefore, will lower the cost.
Air traffic delays, holding patterns and en route deviations
will increase it. Some operators and brokers, however, will
charge based on a quotation that is fixed, and will not change,
regardless of your actual flight time. Be sure to understand
which method your charter professional will be using to quote
and invoice you.
Many operators try to make their pricing
more appealing by charging on a distance basis, against actual
trip length. Some will qualify this length, however, by charging
for trip length as extended by expected deviations. Since
there is no way for a passenger to check this distance, it
becomes a specious form of pricing because the unit (i.e.
mileage) cannot be measured.
Most unit pricing charges (hourly or distance
based) relate to an operator's actual hourly expenses—aircraft
lease, fuel, maintenance, crew wages, and his profit margin.
Prices guaranteed in advance are like any other lump sum agreement:
a bet on the part of the vendor that he can do the job within
the sum quoted and still make some money. To the extent that
the market will bear, a prudent operator will charge extra
to give himself some margin. However, if you are willing to
share the bet and accept his unit price terms, you may share
the savings if the trip is quicker than expected. Or you may
pay more if the trip is longer.
Surcharges While many charter operators include all surcharges in
their base price, some bill other aspects of the trip as extra
charges. These can include handling fees (landing and takeoffs),
municipal landing fees, ramp (parking) fees, waiting time,
overnight charges, de-icing, preheating of cabin and/or engines,
hangar storage, and federal and state taxes.
Landing and ramp fees are regarded
as pass-along expenses to the customer. The fees vary widely.
Though usually quite reasonable (it costs more to park a car
in Manhattan than to land and park a Lear Jet at the average
airport), the expense to land at major metropolitan airports
can be very high.
Terms of Payment
Terms of payment are of great concern to
the operator. Because of the high expense of a single trip,
one bad debit might erase a substantial portion of a year's
profit. The operator has provided a service that cannot be
returned, and the cost of pursuing a claim may preempt litigation.
Often, and this applies to charter brokers
as well as operators, a 15-20% deposit is required of a new
customer. Less frequently an operator may ask as much as 100%,
or complete payment in advance for the trip. Variables that
influence payment terms might include the operator's cash
position, the trip cost, his feeling about the account, and
the time available for a reasonable credit history to be verified.
Usually there is no time, so the operator is back to trusting
instincts or asking for pay in advance.
The credit card offers a way out. Its advantages
are several: all travelers and companies have one; a third
party of national financial stature is ready to offer him
support; a method to take a "deposit" in escrow
or advance (which may or may not be debited from the card
holder) in order to minimize the chance of double booking
or an unreliable customer. It also gives the operator a way
to insure final payment on time. And cash flow is particularly
important to an industry with large fuel bills and expensive
equipment leases. A survey recently performed by The Jet Charter
Guide indicates that 16% of all charter flights are conducted
using some form of credit card payment.
Whether it is a last minute, complicated
or short trip, make certain you understand every line item
of the quote you receive from the operator or broker and that
the payment terms are clear.
