28 Jul 2021

With the level of global travel uncertainty still high, many travel companies are considering aircraft charters as a way to increase capacity at short notice this summer.  Chartering is an option for both commercial aircraft and private jets and once seen as an option only for the wealthy, the pandemic has seen a rise in the number of private jets hired by both travel companies and customers alike.

Here are our top 10 tips if you are thinking about chartering a commercial aircraft or private jet this year:

  1. Price – how much will it cost? The price of chartering will depend on a number of factors:
    • Availability of aircraft on the market for the dates you require;
    • Flight length – a longer flight equals greater fixed costs (fuel, aircraft handling, crew costs);
    • Destination – Some airports carry expensive landing or parking fees;
    • The size and age of your preferred aircraft. Would a smaller private jet work or do you need a larger commercial aircraft?
  2. Will you be using a charter broker, or do you intend to contract with the aircraft operator directly? The benefit of using a broker for either a private jet or larger commercial aircraft, whether for one (return) journey or a series of flights, is that they will assist with their knowledge of the aircraft market and with the administrative tasks required for a charter flight. These include arranging permits, licences and ensuring compliance with safety measures. The broker should offer you good customer service, however, they may charge you more, so shop around if you can. The broker will add its commission for its agency or ‘procurement’ fee on to the buy price of the aircraft from the operator; it won’t disclose its buy price to you, but its fee will be factored into the price you pay.
  3. Have you considered the time limitations on permits? If you are considering arranging a last-minute charter journey using a broker, factor in the time it will take to obtain landing and over-flight permits for countries on your flight path. Sometimes permits can be obtained on very short notice, but not always.
  4. If you need an aircraft for more than one journey, it might be worth considering leasing an aircraft on an “ACMI” or “wet lease” basis. A wet lease is an arrangement under which an airline (the lessor) provides the aircraft, complete crew, maintenance, and insurance (ACMI) to the travel company (the lessee) and also obtains the relevant permits and licences. The lessee pays for the aircraft by the hours operated. This can work out cheaper than chartering if you need an aircraft for several flights or for a longer period of time – i.e., a summer or ski season.
  5. Alternatively, have you considered a dry lease? Under a dry lease the lessor provides the aircraft and is usually responsible for permits and licences, but the lessee provides its own crew. The lessor does not retain operational control of the aircraft either. With dry leases you may be able to exercise more control over the flight experience for your customers.
  6. Whether you charter an aircraft (private jet or larger commercial models) for one journey or use a wet or dry lease, you need to consider whether your customers need ATOL protection. This will depend on a number of factors including who is selling the seats to the public and whether any exemptions apply to the business making the sale.
  7. If using a broker, check the basis on which you are contracting.  Typically, private jets are chartered on an agency basis but if you book a commercial jet, the broker will contract as the principal. Under an agency arrangement, the broker’s main responsibility is to procure the aircraft. The travel company, as the customer, accepts the terms and conditions of the operator and the broker effectively ‘steps out’ of the contractual arrangement made between the customer and operator on signature. If the broker is the principal however, it is responsible for providing the services to you even though the operator has full operational responsibility for the aircraft.
  8. Who will take responsibility if there are problems with the aircraft? Read the terms and conditions of your charter contract carefully. A broker may carve out liability for machinery or engineering failures of the aircraft and your rights may be determined by who you have contracted with. There may be a non-circumvention clause under which you are not permitted to contact the operator for a period of time after your flight. You will also be expected to indemnify the broker and/or operator for any damage or loss you or your customers cause to the aircraft.  
  9. Consider who will take responsibility for the (non – Regulation 261, for which see below) costs of a delayed flight. The aircraft operator will have full operational liability for the flight, but it will not be responsible for all costs if the flight is delayed. You may, for example, be responsible for extra costs such as demurrage (the fee charged by an airport if the aircraft is delayed on the airport tarmac). Be clear on who is responsible for these costs.
  10. Passenger claims: If a flight is delayed, the passengers may have a right to claim compensation under Regulation 261 ((EC) No 261/2004). By law, this is an operator cost, but as the flight charterer, the operator (or broker) may ask you to indemnify these costs. This is a commercial decision, which is always worth negotiating, but ensure there is certainty on where this cost falls.

Related sectors

Authors

Follow us online

Register for updates

You can register online or follow us on Twitter or LinkedIn to receive our latest news, events and publications.

Register

Search

Portfolio
Title CV Email

Remove All

Download