- 14 Apr 2021
- René Armas Maes
How can you balance cost with safety to ensure you get the best Business Aviation flight possible? René Armas Maes provides practical insights…Back to Articles
Private aviation offers many types of solution for those seeking to use aircraft without the commitment of wholly-owning one. These include on-demand charter, block charter, multiple travel (or jet) card options, shared flights, and scheduled shuttle operations. Beyond charter itself, are options to fractionally own aircraft, or engage in short- and long-term aircraft leases.
In the past, charter was the preferred – and perhaps only – solution available to those not wanting to own a jet. Today, micro-segmentation and personalization has drastically increased the access levels to private aviation.
However, with the increase in the solutions has come an increase in service providers, all looking for a slice of the pie. Therefore, it has become increasingly important for users to analyze the service providers for reliability, service recovery, and consistency.
On Demand & Jet Card Charter
Using on-demand charter means that there is no commitment beyond the specific trip being booked. In contrast, a jet card requires a committed relationship for a set number of charter hours over a period of time (i.e. one year), meaning the user can expect a consistent level of service and adherence to safety standards, at a set price.
Though the jet card user is not obliged to use all the hours they have booked during that time, they will lose those hours when the jet card expires.
For those using ad hoc charter, the non-committal element may work well if they are flying less than 25 hours annually.
But if a relationship has not been established with one operator, attention will need to be given to ensuring the best travel experience each time, at the right price, and with adherence to the highest safety standards.
This will require the ad hoc charter user to research and obtain new quotes for each new trip, which is likely to be time-consuming.
On the other hand, those traveling on ‘high demand’ days may find difficulty obtaining a flight from their preferred provider. Recently, for example, NetJets eliminated peak day access on its new Elite jet cards. Previously, it had placed a 25% surcharge on 45 peak days per year, but this recent development was done to protect its service delivery to fractional share owners on the busiest days of the year.
Shared Private Charter
The shared private jet charter business model can offer important savings for users, but it also presents many limitations. For example, not only does it require at least two parties to agree on the routing, time and date of departure, but users lose the flexibility to change the routing. Moreover, one of the key benefits to private aviation – privacy – is lost.
Shared private charter gets more complex depending on the number of people individually buying a seat on the flight.
Large jet card programs might allow its program members (and perhaps non-members) to buy individual or blocks of seats on scheduled shared flights – particularly when the provider is targeting price-sensitive customers who are aiming to save on a per-seat basis, and who cannot afford to charter an entire airplane by themselves.
Scheduled shuttle operations are provided by operators who publish commercial schedules just like the airlines do, but offer passengers reduced travel time by operating from small and private terminals.
In addition to the above, aircraft operating leases may be favored by some users with specific travel demand for the duration of a key business project, over a specific timeline.
The preceding discussion should highlight the need for users to evaluate what Business Aviation travel option is most likely to meet specific budgetary and customer needs, if not whole aircraft ownership. This will require due diligence, factoring the pros and cons of each travel option. (The evaluation framework provided in Table A can help serve as a quantitative and qualitative assessment tool.)
Moreover, the information and metrics set out in Table B need to be collected, reviewed and understood by potential owners, and perhaps even by their lawyers (since many vendors will try to simplify matters, using standard contracts).
This way, a user can establish what can be negotiated to meet their specific needs, and arrive at the best value-creation travel solution.
Build a Yearly Budget
It’s important to go a step further and build a multi-yearly budget that includes the total cost per flight hour for each option, using a number of assumptions (i.e. the percentage of travel in summer vs. winter; peak day travel vs. non-peak day travel; and more).
Rank all of the options from the lowest cash outflow to the highest. You could even assign ‘weights’ to specific items and perks that you value the most, and execute a second evaluation.
Evaluation of Safety Standards
There’s more that goes into an evaluation of a service provider than mere monetary items, however. It is also important to evaluate where each potential operator stands in terms of safety standards.
If you are booking your travel through a broker, it is wise to understand which company will be providing the service, since many play the role of ‘intermediary’ as they actually don’t own the aircraft or operate the flight. Instead, the service will be provided by a third party, and even potentially sub-contracted to a third party not known by the broker.
The following checklist can be used in your safety standards evaluation:
What’s Your Typical Travel Requirement?
Finally, to make the highest return on investment decision when evaluating a business jet travel option through its many available options, it is key to define your typical travel mission requirements, including range, regular destinations, number of flight segments, and frequency of flight.
In addition, define what your typical travel profile is in terms of:
Having a clear idea of your requirements will help you focus on what matters most for you. Gather the information, interview the Business Aviation service providers, fill-in the evaluating framework sheet, weigh up all of the options, and if possible book and ‘live the experience’ through a one-time charter flight with the two top selected providers.
After you have completed your due diligence, you are most likely to arrive at the best travel decision for your needs and budget.