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10-13-2010 / 02:46 AM

A reader of my recent blog „Who want to fly with the dinos?“ sent me an interesting document, the breakdown of the costs to own and operate a charter jet. Even though it is not labelled as confidential I probably should not have it and I won’t disclose the company. But it is one with a bigger fleet; so the data should be somewhat typical.

What is the most expensive part of the business? It’s not fuel, crew or maintenance, the most costly aspect is to own the aircraft. On a per-flight-hour-basis aircraft depreciation accounts for nearly 50 percent of the total cost. When you take into account that a 10 million dollar investment isn’t used more than one hour a day (300 to 400 flight hours per year), this shouldn't surprise anybody who has at least basic economical understanding.

The numbers clearly show that utilization is the most powerful lever to influence the economics of business jet charter. Increasing utilization from let’s say 400 to a still not impressive 500 hours per year would lower the cost per flight hour by roughly ten percent. So the answer to an operator’s question “How can I make more money with my airplanes?” was already given in 1975 by German pop group Silver Convention: Fly, Robin, Fly.

You think, that is easier said than done? Yes, at least not without adopting new ideas and changing the modus operandi. Learn to sell your service, establish an transparent, easy to use and efficient distribution system, reach out to clients who haven’t used business aviation before and you will see this industry taking off.

Another interesting aspect of the data: It explains how all the single-aircraft-operators with a 15 year old Citation, who distort the charter market at the moment, can survive. With a virtually written off aircraft and no overheads they can easily live with spending more on fuel and maintenance and still make money – even with only a few flights per months.


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