The popularity of private air travel has increased exponentially over the years with the addition of improved luxury aircraft, social media, celebrity exposure and the increased level of commercial airline incidents involving passengers (everyone remembers the doctor being taken, violently, off the United Airlines flight in 2017). But with the growth of any luxury market comes the one big question on everyone’s mind, what’s the cost?
Luckily, many companies, including our own, provide private charter clients with several options so that they can choose the most convenient and economical option for their specific needs. By offering these choices to all clients and the experienced knowledge of professional agents, we can keep our clients educated and informed so that they make the best choice. We also offer follow up for our current clients that includes keeping track of their preferences so that if another option begins to look like more of a benefit, for instance in the case of the client increasing their hours spent flying from once every year to 5 or 6 times a year, then we can present this option to them as an alternate to start mitigating their costs.
So what charter financial options are available? Let’s discuss the top three.
What are Air Charters?
Air charters are the short-term rental of an entire plane and offers luxury travel that supersedes traditional commercial flights. With on-demand air charters you have the ability to select the perfect aircraft for your needs, whether you need a small jet simply to get you from point A to point B or a larger one for cross-country flights and larger groups. Charters provide a level of flexibility and convenience not obtained when simply reserving a seat on a commercial flight. This convenience not only comes from the ability to select the size and type of aircraft you specifically need, but also with shorter check in and TSA times and additional amenities such as preferred parking and/or a car service. For companies and individuals traveling less than 20 hours per year or for one-time travel itineraries, this is the best and most economical option. Pricing is based on the size, type, age and distance traveling of the aircraft you select. On-going fees for other charter options are excluded. Which is why some frequent flyers, fractional owners and even jet card holders use on-demand charters to supplement their travel during the year.
The downsides to air charters are that they can become expensive if you begin to travel more often, you may incur a repositioning and/or deadhead fee and availability of aircraft is limited during peak times. When requesting a quote please make sure you are provided with the amounts for landing fees, fuel, fuel surcharges, catering, taxes, ramp fees and any applicable overnight expenses for the crew.
What is a Jet Card?
Jet cards are a convenient “pre-pay” method for frequent travelers and businesses who may need last minute travel options throughout the year. While this option is typically used for travelers who fly less than 50 hours per year, some owners, fractional and whole, choose to procure jet cards as a convenient method of payment for supplementary travel. Jet cards offer their users the ability to schedule flights with the choice of some of the latest model aircraft without having to make a large investment or commitment to any length of time that is required of owners. Jet cards give their users the ability to book aircraft, at any time and typically requires only 8-12 hours notice on off-peak days. Once a client books their flight day and time, they will also be given the same access to luxury amenities typically reserved for owners or lessees. Empty leg or deadhead flight costs are also a benefit as they are not included in the cost for one way flights using a jet card.
Jet card disadvantages include the need to pay up front and peak days require earlier notice time. When gathering a quote be sure to know if the fuel surcharge is included in your pricing or not as that can come as a surprise if you are not expecting it.
What is a Fractional Ownership/Lease?
While fractional ownership and leasing have their distinguishable features they are very similar in many ways. Aircraft leasing is similar to that of leasing a vehicle, clients are renting the aircraft and will eventually retain the plane title. Whereas fractional ownership is where clients partially own an aircraft with another party. Lessees have the option of returning the aircraft or buying it and fractional owners have the option to sell their share back at the end of their term. Both forms of charter financial options are most beneficial to those who travel 50+ hours per year. The largest differences in both of these options is how the fees are structured and the responsibility of the depreciation of the aircraft over time. With both fractional ownership and leasing, clients will have guaranteed access to the aircraft, hourly rates, and depending on the terms of the lease (either wet which includes a crew or dry which does not) clients may be responsible for the crew, fuel charges and insurance as well as some additional expenses. Both contain a set period or contracted time they are in use by either the fractional owner or lessee and will gain clients access to newer model aircraft.
Disadvantages for fractional ownership and leasing are related directly to the fee structuring and the tax responsibility as well as the additional expenses incurred when you partially own an aircraft.
So which charter financial option is right for you?
Making the decision to simply charter an aircraft for one instance, or several, carries with it a noticeable difference in responsibility than that of purchasing time ahead or even leasing an aircraft. The decision can be made simply by asking yourself what kind of investment you are willing to make financially regarding time and maintenance. While Flex Air Charters offers all of these options, we work with our clients to find the right solution for their situation rather than a blanket solution. We know that an important decision is best made after being educated on all of your options which is why we offer free advice and consultation to anyone wishing to find out more about charter financial options. Simply give us a call at 1-888-722-0776 and speak to an experienced agent to discuss the options and which one would best serve you.