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Air Charter : Pricing and payment


It is critical that the air charter expense must be evaluated versus the trip at hand. The key points include - the number of passengers, and a comparison of the cost against alternative forms of travel. You would need also evaluate the savings in time, ground transportation, lodging, and gained business opportunity. With air charter, you can bring all the benefits that air travel offers - quick transportation combined with convenience and service. Of course, when you have to be somewhere in quick time, it is worth every cent.

Most aircraft are usually chartered on an hourly basis - the rates vary according to quite a few factors. Hourly rates are calculated on the basis of the time an aircraft actually spends in the air. A strong tailwind, hence, will lower the cost. On the other hand, air traffic delays, en route deviations , holding patterns will increase icosts. Some brokers and operators will charge based on a quotation that is fixed. here the quote does not change, whatever your actual flight time. You need to understand which method your air charter broker will be using for quoting and invoicing you.

Many charter operators would try to make a more appealing price structure by charging on a distance basis against actual trip-length. Some operators again, will qualify this length, however, by charging for trip length as extended by expected deviations. Here there is no way for a passenger to check this actual distance.

Most unit-pricing charges, whether they are hourly or distance based would relate to an charter operator's actual hourly expenses - fuel, aircraft lease, crew wages, maintenance, and the profit margin. The prices that are guaranteed in advance are like any other lump sum agreement: a bet on the part of the vendor so that he can do the job within the price quoted and still make some extra money. To the extent that the market would bear, a wise charter operator would charge extra to give himself some margin. However, if one is willing to share the bet and accept the unit price terms, one may share savings if the trip is shorter than expected. On the other hand, one may have to pay more if the trip takes longer.

Surcharges

While most charter operators and brokers include all surcharges in their base price, a few might bill other aspects of the trip as additional charges. These can include handling fees, including landing & take-offs, municipal landing fees, waiting time, overnight charges, ramp parking fees, de-icing, preheating of cabin and/or engines, hangar storage, federal & state taxes.

Landing and ramp fees are regarded expenses that are passed along to the customer. These fees vary widely. Though they are usually quite reasonable, the expense to land at a major metropolitan airport can be quite high.

Terms of Payment

Terms of payment are a big concern to most charter operators. Because a single trip has high expenses, one bad debt can erase a substantial portion of annual profits. Here the operator has provided a service that unlike a product, cannot be returned, and the cost of pursuing the claim may preempt litigation.

Very often, charter brokers as well as operators would ask for a 15-20% deposit from a new customer. Sometimes, an operator may also ask as much as 100%, or complete payment in advance for a trip. The factors that influence payment terms are the charter operator's cash position, his feeling about the account, the trip cost, and the time available for the credit history to be verified. When there is little time, the operator would back his instincts or ask for payment in advance.

Credit cards offer a way out in these situations. The advantages are several: all travelers and companies have credit cards; here a third party of national financial stature is ready to offer support; a method where a "deposit"is placed in escrow or advance. In order to minimize chances of double booking or an unreliable customer. This gives the operator a way to ensure final payment on time. Moreover, cash flow is particularly critical to an industry with huge fuel bills and very expensive equipment leases.

Last but not the least - make sure you thorougly follow every line of the quote you receive from the charter operator or broker and the payment terms are crystal clear.