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Private Jet Charter: Past, Present and Future

Jan. 17th, 2011 | Comments 2 | Make a Comment   
Luxury Aircraft: Air charter was originally designed to offer business executives an alternative to the high cost and ongoing expense of aircraft ownership. Private jet charter offers the same convenience, flexibility and luxury of private jet ownership, without the ongoing cost and expense of owning and maintaining a private aircraft.

It's difficult to say when air charter first "took off" in the private aviation industry. Most experts agree that air charter became popular right after World War II. After the war ended in the 1940s, the surplus of leftover aircraft led many aircraft owners to rent or "charter" out their planes to offset the cost and expense of maintaining the jet.

In the 1960s, which could be considered the "golden era" for private jet charter, the first corporate jet was introduced to the air charter industry. This aircraft was the Learjet 23. Designed after the P-16 Swiss fighter, the Lear 23 quickly gained notoriety for its amazing climb performance and sleek aircraft design, by 1960s standards. The Lear 23 is considered the first charter jet aircraft by many experts in the private aviation field.

After the successful introduction of the private aircraft, many new private jet models were quickly introduced to the air charter industry. Unlike their military predecessors, these charter aircraft were specifically designed for comfort and luxury, setting a whole new precedence for business travel.

Over the next 30 years, the air charter industry expanded to include not only light jet aircraft, but the mid-size and heavy jet aircraft we have today. There was only one problem: No one knew how to find these aircraft.

Before the advent of the Internet, aircraft operators didn't have the ability to advertise the price, availability and location of charter aircraft to a large audience of private jet travelers. From the 1940s to the 1960s, private jet travelers had to rely on either word-of-mouth or the yellow pages to find a local aircraft operator for their charter flights. If a business executive happened to find a local aircraft operator, there was no guarantee that the operator would have availability for their flight. Oftentimes, this forced business executives into flying commercial because they couldn't find an available aircraft.



Jet Charter in the "Information Age"
The advent of the Internet in the 1990s completely revolutionized the air charter industry by enabling aircraft operators to advertise their charter fleets to a large global audience. This enabled private jet travelers to contact a broker of aviation who could then source all the relevant and available aircraft for their charter flights. For the first time in 50 years, private jet travelers had access to charter aircraft through the Internet.

With this new Internet technology came the emergence of several new business models in the late 1980s and 1990s, including fractional ownership, membership programs (jet cards) and eventually, on-demand jet charter. In the late 1990s and early 2000s, jet charter brokers also emerged on the scene. Charter brokers specialize in offering private jet travelers multiple aircraft options for their charter flights.

During the Internet age, the first air charter model to emerge was fractional ownership. Designed by aviation giant, NetJets, fractional ownership provides an alternative to the high cost of whole aircraft ownership. Fractional ownership programs sell a fractional interest or share in a specific type of private aircraft. By purchasing a pro-rata share or fractional interest, private jet travelers can eliminate the costs and expense of aircraft maintenance and acquisition fees, while still enjoying the benefits of aircraft ownership.

However, fractional aircraft owners are restricted to utilizing the same type of private aircraft regardless of the distance or passenger count of individual flights. In addition, the initial cash outlay of fractional ownership is considerable, and can cost individuals and companies well into the millions of dollars, depending on share size.

After the introduction of the fractional ownership business model, membership programs, such as the Marquis Jet Card or Sentient's Membership Program, emerged in the air charter industry. Jet membership programs offer a less expensive alternative to fractional ownership. They share the same fixed hourly rate structure of fractional ownerships, but they don't offer the same economical advantages of owning and depreciating capital equipment as fractional ownerships.

While membership programs further reduce the financial barriers of entering private aviation, they share many of the same limitations of fractional ownership programs. The Marquis Jet Card membership, for example, sells 25 hours at a fixed hourly rate, in a specific type of aircraft, for a minimum starting price of $132,000. Like fractional jet owners, jet card buyers are restricted to utilizing the 25 hours in the same type of aircraft, regardless of the individual needs of their charter flight.

In the late 1990s, air charter professionals came up with a solution to the problems presented by both fractional ownership and jet membership programs. They invented a new business model, called "on-demand air charter," that enables air charter buyers to purchase individual flights in on-demand charter aircraft. Although a brand-new approach to jet charter, on-demand soon became the most successful business model in the air charter industry.

Unlike fractional ownership and jet membership programs, on-demand jet charter enables air charter consumers to purchase jet charter flights on a per-trip basis, eliminating capital commitment or additional monthly fees. On-demand jet charter flyers work with air charter agents to find the safest and most luxurious aircraft for individual charter flights. And since air charter agents have access to thousands of private jet aircraft, they can find the most appropriate aircraft for individual charter flights.



The Future of Air Charter
As we enter a new decade, some of us may wonder how the future will affect the private jet charter industry. Our air charter agency predicts that a new category of lighter and more efficient aircraft, called Very Light Jets (VLJ), will help usher in the next generation of private jet flyers by lowering the cost of on-demand jet charter flights.

It is believed that the introduction of high-speed Internet on jet charter flights will increase the efficiency and productivity of private jet charter. As we move into the next decade, the increasing efficiency of jet charter as a business tool will only serve to increase the popularity of air charter.
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2 Comments on this Article

Oliver commented on March 18, 2011

The future is on-demand jet charter VLJ. Oliver www.jetprivate.biz

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David Urquart commented on January 17, 2011

Stratos Jet Charters is a great choice of name for a new company. Unfortunately, your apparent lack of aviation knowledge jumps out before reading a single word of the article. The last thing people who charter jets expect to see awaiting them on the airport ramp is an airplane with propellers. So why does your promotional piece lead with a picture of a propeller driven King Air? That's a turboprop airplane, and no one in aviation would ever call it a jet. Especially a person who pays money to fly in a jet. I suggest you withdraw that piece fairly quickly. Already, a friend in the jet charter business drew my attention to it with a sarcastic comment that I won't repeat here. Which is a great shame, because the text strikes an excellent tone, and readies the market for more things to come. But the longer this piece stays out in public view, the more ridicule it will draw, and that can't be good. Maybe you should change ad agencies, as well.

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