NAFA member, David Wyndham, Co-Owner and President of Conklin & de Decker, discusses potential issues and concerns for operators to consider before choosing to hire a management company to charter your business jet when you're not using it.
Putting an aircraft on a charter operator's certificate may incur expenses for the initial inspections that are required to demonstrate its compliance with FAA standards for commercial service. Both the aircraft and crew must conform to the charter operator's approved operating limitations.
The aircraft must also be enrolled on the charter operator's approved maintenance program, which could require more frequent inspections, while commercial operations may necessitate the installation of additional safety equipment and the crews must train to the approved operating standards fo the charter operator.
The above costs, which are typically borne by the aircraft owner, can range from several thousand to tends of thousands of dollars.
Given the added costs of approving your aircraft for on-demand commercial service, there must be sufficient charter revenue to make the arrangement work financially. The more you fly for your own purposes, however, the less time the charter operator has available to monetize your aircraft. This can be a delicate balance to find, since scheduling charter flights will impact the aircraft's ability for company travel.
Moreover, peak demand for charter may overlap with your own intended travel schedule, especially in the summer and around the holidays. So, you will either forgo the charter revenue or be forced to adjust your own itinerary to accommodate.
Some charter operators may claim that they can charter your aircraft for 700 hours per year - but that won't be possible unless you fly infrequently and avoid peak travel periods. If you fly more than 100-150 hours annually, you may not be able to generate enough charter revenues to make the extra work worthwhile.
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This article was originally published in AvBuyer, Vol. 23, Issue 2, 2019, p. 62.
