Pricing & Payment
The expense of air charter must be evaluated against the trip at hand. How
many passengers are going, and how does the cost compare to other forms of
travel? What is the savings in time, lodging, ground transportation, and gained
business opportunity? Air charter can bring all the advantages that air travel
is supposed to offer- rapid transportation with real convenience and service.
When you really have to be somewhere in a hurry, it is worth every penny.
Aircraft are usually chartered by the hour, with rates varying according to
many factors. Hourly rates are figured against the time an aircraft is actually
in the air. A strong tailwind, therefore, will lower the cost. Air traffic
delays, holding patterns and en route deviations will increase it. Some
operators and brokers, however, will charge based on a quotation that is fixed,
and will not change, regardless of your actual flight time. Be sure to
understand which method your charter professional will be using to quote and
Many operators try to make their pricing more appealing by charging on a
distance basis, against actual trip length. Some will qualify this length,
however, by charging for trip length as extended by expected deviations. Since
there is no way for a passenger to check this distance, it becomes a specious
form of pricing because the unit (i.e. mileage) cannot be measured.
Most unit pricing charges (hourly or distance based) relate to an operator's
actual hourly expenses—aircraft lease, fuel, maintenance, crew wages, and his
profit margin. Prices guaranteed in advance are like any other lump sum
agreement: a bet on the part of the vendor that he can do the job within the sum
quoted and still make some money. To the extent that the market will bear, a
prudent operator will charge extra to give himself some margin. However, if you
are willing to share the bet and accept his unit price terms, you may share the
savings if the trip is quicker than expected. Or you may pay more if the trip is
While many charter operators include all surcharges in their base price, some
bill other aspects of the trip as extra charges. These can include handling fees
(landing and takeoffs), municipal landing fees, ramp (parking) fees, waiting
time, overnight charges, de-icing, preheating of cabin and/or engines, hangar
storage, and federal and state taxes.
Landing and ramp fees are regarded as pass-along expenses to the customer.
The fees vary widely. Though usually quite reasonable (it costs more to park a
car in Manhattan than to land and park a Lear Jet at the average airport), the
expense to land at major metropolitan airports can be very high.
Terms of Payment
Terms of payment are of great concern to the operator. Because of the high
expense of a single trip, one bad debit might erase a substantial portion of a
year's profit. The operator has provided a service that cannot be returned, and
the cost of pursuing a claim may preempt litigation.
Often, and this applies to charter brokers as well as operators, a 15-20%
deposit is required of a new customer. Less frequently an operator may ask as
much as 100%, or complete payment in advance for the trip. Variables that
influence payment terms might include the operator's cash position, the trip
cost, his feeling about the account, and the time available for a reasonable
credit history to be verified. Usually there is no time, so the operator is back
to trusting instincts or asking for pay in advance.
Whether it is a last minute, complicated or short trip,
make certain you
understand every line item of the quote you receive from the operator or broker
and that the payment terms are clear.
At CharterAgency.com, we usually charge 10% of the total cost as deposit to secure your booking, and full payment by a date specified by the charter operator.
Payments will be in an agreed currency, at our account in US, UK or Australia.