“[New billionaires in fast-growing countries] have to buy longer-range airplanes. If you’re flying from Mongolia to Nigeria, it’s either a three-day journey flying commercial or a nine-hour flight on your jet.”
Understanding your invoice
You examine your bill at restaurants and scrutinize charges before checking out of a hotel, but how savvy are you about auditing your air charter invoice? Unfortunately, deciphering a charter bill isn't easy: no standard charter invoice exists, some simply list a total amount due, and even when charges are broken out, they can be opaque.
The good news is that charter companies present an estimate before they provide services. "I encourage every charter customer to understand the quote and what it does and doesn't include," advised Toby Batchelder, sales manager of Minneapolis-based Elliott Aviation.
Here's a look at what you might find on your bill:
Flight charges. The cost of the aircraft-the largest component on the charter invoice-usually reflects a per-hour figure and estimated flight time (including taxiing). Unexpected weather can alter flight length and the ultimate charges. Savings alert: Many providers that traditionally imposed minimum flight times or daily minimums have waived the requirements to stimulate bookings in a sluggish market. If your quote includes charges for minimums, ask to have them waived.
Landing fees. Landing fees vary greatly and can amount to several hundred dollars at some airports. Yet they may be waived (as may parking and ramp fees) for aircraft buying fuel. Some charter quotes include flat-rate landing-fee estimates, though the final bill reflects actual charges; other charter providers assess a flat rate whether a landing fee is paid or not, and whether the actual fee is more or less than the estimate. Ask providers how they bill for landing fees.
Fuel surcharges. These surcharges reflect the difference between a benchmark price set by the operator and the actual fuel cost. They may be assessed as a per-hour figure added to the base cost of flight time or be derived as the difference between actual fuel costs and the price of fuel at the operator's benchmark rate. If the operator calculates the surcharge from actual costs rather than from an hourly rate, the estimate may be based on preferred rates negotiated with FBO chains and fuel companies. If you want to use a specific FBO or service provider at your destination airport, ask whether this will affect the fuel surcharge (and ramp and parking fees).
Overnight and per-diem fees. When the crew remains at a destination overnight during a roundtrip, charter operators typically charge an overnight fee-$600 domestic/$750 international is common-for their food, lodging and ground transportation. You may also be charged a per diem for day trips, often in the $75 range, to cover crew meals. If you're thinking of changing a day trip into a multiday one, factor the overnight fee into your costs.
Federal excise tax and segment fees. Domestic charter flights incur a 7.5-percent federal excise tax, but not all charter quotes include it. Ask whether yours does. The government also imposes segment fees ($3.70 per passenger per flight) and, if you're flying to Hawaii or Alaska, an additional tax of $8.10 per person.
Positioning fees. If the aircraft picks you up or returns you to an airport other than where it is based, you'll likely be charged for the cost of moving the empty airplane. Not all charter providers list this charge separately, so ask yours to do so. Seeing this cost can help you plan-and economize. For example, if the aircraft is dispatched from an airport on one side of your city to pick you up at an airport near your office on the other side of the city, you may opt to drive to the base airport to save the positioning fee.
Catering. Many charter companies provide beverages and snacks at no extra cost. Anything more will show up under catering. Regardless of markup, catering charges are relatively high because air caterers have costs that restaurants and ground-bound caterers do not. Inquire about catering charges if you're planning an in-flight meal.
Unanticipated costs. Expenses that weren't on the quote may appear on the final bill. In winter, the airplane may require de-icing. If the aircraft must be hangared overnight, you'll be charged a hangar fee. If you soil the aircraft interior, you may be charged for cleaning.
International fees. These can include arrival and departure taxes, overflight and other permit fees, charges for flight-planning assistance, customs fees and fees assessed by host countries on foreign-registered aircraft using their airspace. Charges vary considerably, but flight-planning services can provide estimates to the charter company quoting the trip.
Though any charter provider should be willing to discuss costs with you, don't expect line-item invoices from all of them. "We prefer not to give a breakdown because we want to keep it simple,"said Scott Phillips, the Naples, Fla.-based CEO of aircraft charter and management company Jet 1 and owner of charter broker Charter Logic.