Charter flying decreasing in some markets

Business Jet Traveler » August 2008
Friday, August 1, 2008 - 5:00am

Charter volume is dropping significantly in some markets, according to charter industry insiders. Recent increases in the size of the business aviation fleet are contributing to this problem, said William Quinn Jr., chairman of Aviation Management Systems in Portsmouth, N.H. "If the demand stays the same or even grows just a smidgen," he explained, "the supply is going [to grow] at a far greater rate than the demand. Most all of the fractional players have matured to the point where they are beyond the so-called critical mass. So their need for charter has dropped off considerably in the past three to five years and I think that will continue. We are also in an election year, and that tends to cause people to back off on making buying and spending decisions."

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““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”

-David Yermack