Jet charter rates

Jet charter rates are most often fixed on the basis of time. The operator makes an estimate of how many hours of flying are involved and adds overage for possible delays, costs of preparing the aircraft for the flight, airport charges and an allocation of overheads. The quote would include a safety margin in case the journey takes longer than expected. A client can hope for better jet charter rates by offering to share this risk. The rate quoted would then be on an optimistic basis, with everything proceeding to plan, and the client would agree to pay extra in the event of delays.

A less popular method is to quote by distance. Weather and load factors may affect the distance to be traveled and again, the operator would have to build a safety margin into the quote to guard against such eventualities. The client would find it difficult in practice to live with an arrangement in which he or she pays extra for any additional mileage, because it would be very difficult for anyone to verify a possible claim by the operator in this regard.

Airport charges and taxes by local authorities can be very high and they vary from place to place. Most operators would therefore not include such charges in the base quote. Similarly, expenses related to keeping the aircraft ready for the trip can involve significant energy charges, and may be charged extra. It is best to study the fine print of the quote in advance, so that possible surcharges are taken into account in time. This also applies to emergency and sudden use of a chartered jet.

The terms of payment are an important part of the quote. Since operating and fixed costs are high, most organizations cannot afford to extend credit or to take a risk. New customers would almost certainly be asked for a full advance. A 15-20 per cent advance is normal even for regular clients.

Executives, tour operators and the Government, all need to use air charters in the course of their work and routines. Jet charter rates are high relative to surface movement and they include substantial sunk costs for the operator as well. Hence it is in the interests of both parties that the charges are quoted and understood in clear and comprehensive terms.