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What’s the target market for private jet charter?

by tom44 on November 19, 2013

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Question by Nick F: What’s the target market for private jet charter?
Are most of the people who use jet charter services big, rich company CEOs that go to conferences, or famous celebrities going to concerts, or sports teams traveling to games? I was looking into the air charter business but I can’t exactly identify what type of people are targeted.

Also, would it be reasonable for a “normal” person (in my opinion, one that makes less than 6 figures) to charter a jet?

Best answer:

Answer by Jim
Target market for private jets? The people who can afford them…

=x Unless its a special reason, private jet rides can be expensive…

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6 thoughts on “What’s the target market for private jet charter?

  1. Nathan B says:

    Honestly, i can’t imagine “normal” people chartering a private jet due to the cost. I would probably market this to either rich businessmen or perhaps find some sort of tourism use for it, such as taking rich holiday-goers to far away holiday destinations in style.

  2. Bizjet Flyer says:

    There are many markets for private jet charters. Unlike common perceptions, it isn’t just the richest of the rich and famous and not all private jets are decked out with recliners, plush seats, and premium sound systems.

    The most common use of a private jet is to transport groups of business people from one location to another when there isn’t airline service available. When used like that, a private jet isn’t much more expensive than the airlines.

    Consider traveling from City A, 45 minutes from a regional airport, to City B, about a 2 hour drive from a large airport. 8 people from a company need to travel from City A to City B and back for all-day meetings on a Wednesday bidding for a project.

    Airlines: 8 people drive from their house to the regional airport on Tuesday morning. They make the 45 minute drive to arrive at the airport about 1.5 hours before the flight is to depart. They get on the plane and fly 1.5 hours to the airline’s hub city, which is the opposite direction of their final destination. They wait 3 hours for a connecting flight. They get on the connecting flight, but it is delayed because of heavy departure traffic. Once airborne, they fly for 2 hours to the destination. Rent two cars to drive 2 hours to City B and check into a hotel for the night. Total travel time: about 12 hours. Go to meetings on Wednesday, spend another night in a hotel, and travel 12 hours back home.

    Total cost: 8 round trip airline tickets, 2 rental cars for 2 days, 8 hotel rooms for 2 nights, 3 days worth of meals for 8 people, mileage reimbursement, and airport parking – around $ 8,500.

    Charter: Depart directly from City A (has an airport, but no airline service) early Wednesday morning. Arrive at the airport 10 minutes before departure. Fly directly to City B (again, has an airport, but no airline service). The flight is about 2 hours. The company sends a van to pick up the 8 people and drive them to the office 5 minutes away. They have 6 hours of meetings, then drive the people back to the airport. They are all home for dinner.

    Total cost: Charter flight and lunch – about $ 12,000. No hotel stays, rental cars, parking fees, etc.

    It looks like it is more expensive, but it also saves over 125 man-hours of productivity at, say, $ 40/hr. The airline trip would cost another $ 5,000 in lost productivity, not to mention a lower quality of life for the employees because they have to spend more time away from home.

    Sorry for the huge story, but that’s the primary market for charter flights. Not to say there isn’t a market for the people you mentioned, but they only make up a small fraction of the industry.

    Most “normal” people will not be able to afford a charter jet just to take the family to see Grandma.

    As for running a charter business, it’s hard to make any money. The overhead is extremely high. A lot of money changes hands, but the profit margins are tiny. It takes millions of dollars to get started, between aircraft acquisition, hiring employees, setting up manuals, and going through certification. Most charter companies are lucky if they do better than break even by the time all of the people and bills are paid.

    EDIT: I was addressing small business jets, such as Citations and Lears, not large airliner-type jets used for transporting large numbers of people (30+) privately.

    As for who flies, it really depends on the client.

    If the client is a company, I usually see people in high positions with the company, such as the CEO or CFO, but I have also flown construction workers, public accountants, engineers, project estimators, middle managers, and maintenance personnel.

    If the client is an individual, it is normally people with 7 figure salaries. Spending $ 10k+ on a single flight is not practical for anybody making less than 6 figures.

  3. Howard L says:

    DayJet, an air taxi operator was in the business of private charters to quite a few destinations for about the price of a first class ticket on a regular airline. They were flying Eclipse 500s, a six passenger jet. They went bankrupt last year but there are a number of similar operations in the start up stage. DayJets business model was based on regular people being willing to pay a premium price to fly direct to almost anywhere and avoid the hassle of airport security, long drives to a major airport, round about routings, long layovers, missed connections, lost luggage, etc. Although DayJets failed their business model has a good chance of succeeding.

    If a jet similar to an Eclipse 500 meets your needs almost anyone will be able charter a private jet in the not to distant future..

  4. captsead0nkey says:

    There is a big market for Charter Operations, but private passenger travel is a very small niche of the market.
    Working at a on demand charter operation, I can tell you this, the majority of our passenger business is sport’s team, and seasonal contracts.
    For the sports teams, especially in the playoffs, I.e March Madness, there are alot of teams that are playing alot of games very rapidly. They have to be there!. No Exceptions. They do not want to risk getting delayed, re-routed to get to their game. Another big issue is security, Its alot more secure to charter a team, then having the whole team show up at the rival cities airport.
    Another big business is contracting the use of aircraft to provide overflow to holiday locations, example spring break, where airlines can not justify adding to their fleet for only about 3 weeks of business, but will contract us to provide flights to absorb the over-flow.
    The majority of private passenger (smaller Lear Jet size aircraft) are for companies trying to get a passenger somewhere quickly that can not be serviced by the airlines. One of the most common is sending a Aircraft Mechinaic and tooling to fix a broken aircraft, or shuttle pilots during the hoiday season. We have arranged a lear jet to sit at an airport for 24hrs a day, with a hot crew, ready to go at a moment’s notice to send pilots anywhere in US/Canada for the large cargo. compaines..
    The primary backbone of our business is Automotive Freight for the Big 3. We provide time critcal transportation, that prevents assy lines from going down due to part shortage, shipper’s error, bad stock, rail cars, ships being late.. you name it ..
    By far the best story ever though..
    I single handly saved Formula 1… I was the one who arranged the Charter to intercept the new Michillan tires in Goose Bay and flew the to Indianapolis by 0800e and had them cleared with customs before the start of warm ups laps….

  5. stingjam says:

    There are 3 key rationals for private jets:

    1. Value of Time (Financial Opportunity cost) – If the passengers skills are in demand in multiple places, and they earn more than a certain amount of money per hour or per day, it simply doesnt make sense for them to be sitting in lines or waiting to board at the airport. Waiting is a waste of money. This can be a CEO or Motivational Speaker or a sports star or anyone who has to be THERE to get their job done. They also may prefer to be home with family as soon as possible. In one example? A flight from Jamaica to Mexico is only about 3 hours in a private jet. If you take scheduled travel you would have to go through Miami and thats now about 8 hours in the air, plus waiting time in miami.

    Also factor in local (ground) travel time. With a Jet, you can go to the closest airstrip to your destination even if it is not an international airport, instead of having an additional 2-hour bus or limo ride.

    2. Health / Medical Emergency – This is usuallly about moving as quickly as possible in a life and death situations, but it can also include special illnesses where a person is so sick that they cant travel by conventional means (because of cabin compression at high altitudes).

    3. Security and Privacy – For many companies, simply having certain key officers movements known to the public is a security risk. For other people (celebrities) they may not want to have to deal with journalists, papperazzi or just over-zealous fans.

    For ‘normal’ people, only health and medical emergencies woudl really justify the expense. MANY of us would spend a huge chunk of our life savings to be home in time to say good-bye to a dying family member or to save our family members life.

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