| As an aircraft owner or someone considering buying | | | | passengers, accommodate four large and two small |
| a plane, you may have heard you can charter your | | | | suitcases, and have a range of 1,000-1,700 nautical |
| aircraft to the public and earn revenue and potential | | | | miles. The true versatility of a jet is judged by how |
| tax benefits. But have you ever wondered if some | | | | far it can fly when full of passengers and luggage. |
| aircraft are more successful in the charter market | | | | Most aircraft must reduce the amount of fuel they |
| than others? Which models provide higher revenue | | | | carry in order to accommodate the weight of |
| margins, are more attractive to charter clients, and | | | | passengers and luggage. Some aircraft must begin |
| are easier and less expensive to maintain? In short, | | | | reducing the amount of fuel they can carry with as |
| which aircraft have what I call a good "charterability" | | | | little as three passengers on board, reducing the |
| factor? | | | | nonstop range. When deciding between aircraft, |
| First, it's important to know that chartering out your | | | | select the plane that can carry the most passengers |
| plane is not a profitable business venture. I am often | | | | and luggage while sacrificing the least amount of |
| asked, "How many hours does my aircraft need to | | | | performance and range. This makes your aircraft a |
| charter to pay for itself?" The answer is that it can | | | | viable option for a wider variety of short- and |
| never pay for itself since charter rates are too low | | | | longer-range flights. No one likes stopping for fuel |
| and supply greatly exceeds demand. So, what's a | | | | when there is another like size aircraft capable of |
| realistic goal? In most instances, charter revenue can | | | | nonstop flight. |
| cover 30 percent to 70 percent of your fixed costs, | | | | 3. Charter Rates. Market forces determine charter |
| not including the mortgage payment. | | | | rates. However, some aircraft models are more |
| Now that we've addressed how charter revenue can | | | | popular with charter clients and tend to command |
| reduce ownership costs, let's review the key factors | | | | slightly higher rates. Presently, a 2009 Cessna CJ3 |
| that contribute to an aircraft's charterability. There | | | | enjoys only a small premium, perhaps $100, over a |
| are three key criteria: low direct operating cost, | | | | 2000 Citation Bravo, even though the Bravo is nine |
| versatility, and current charter rates. | | | | years older. |
| 1. Direct Operating Cost (DOC). This is the variable | | | | Here are the main criteria that are important to |
| hourly cost associated with the operation of the | | | | charter clients. First, the newer the aircraft the |
| jet-in other words, the total of fuel plus maintenance. | | | | better, many charter clients prefer an aircraft to be |
| Fuel is the single largest variable cost, so the more | | | | no older then 5-10 years. Second, a larger passenger |
| fuel-efficient the aircraft the better. Let's compare | | | | cabin with individual seats is favored over a smaller |
| two popular large-cabin models, the Gulfstream III | | | | one with divans, since everyone prefers having their |
| and the Gulfstream G450. The GIII burns 600gph | | | | own seat rather then three people sitting sideways |
| compared with the G450, which burns 500/gph. | | | | on a couch. Third, a large luggage compartment and |
| Assuming an average fuel price of $4.00/gallon, that | | | | fully enclosed lavatory attract more customers. A |
| is a difference of $400 per hour. | | | | fully enclosed lavatory is defined as having a hard |
| Older aircraft also have higher maintenance costs. For | | | | door separating it from the rest of the cabin. Some |
| a GIII, the sum of maintenance parts, labor, and | | | | aircraft have a soft-leather curtain affording very |
| engine costs averages $1,385/hr. Compare that to | | | | little privacy. |
| the G450 with its average cost of only $514/hr. That | | | | What's the bottom line? You should purchase the |
| means a GIII costs $1,271/hr more per hour to | | | | aircraft that best fits your needs and use charter as |
| operate then the G450. Worse, while the GIII | | | | a way to reduce at least some portion of the cost |
| charters for less per hour than a G450, due to its | | | | of ownership. If you are deciding between two or |
| age and relative desirability. This makes it practically | | | | three different models, and charter is going to play a |
| impossible to earn a reasonable return offering a GIII | | | | key role in reducing costs, these tips above can help |
| for charter. | | | | you select an aircraft with a high charterability factor |
| 2. Versatility. This most commonly applies to light and | | | | and put you on the right track to achieve your goals. |
| midsize jets. Most light jets offer seating for six | | | | |