Charter Report Charter Report
Total Page:16
File Type:pdf, Size:1020Kb
CHARTER REPORT CHARTER REPORT SPECIAL REPORT Business picks up as operations become more complex by Matt Thurber The improving U.S. economy, in contrast to challenging economic buyers and operators use technology is having an effect on quot- circumstances affecting the rest of the world, seems to be reflected in ing and selling trips, managing operations and meeting compli- the charter business, and activity has never been better, according to ance requirements. companies AIN interviewed for this special report. Charter/manage- On the buyer side, the ubiquitous nature of mobile devices has ment firms report steady growth in fleets and business, from both man- spawned a race for the first company to become the so-called agement customers and buyers of charter lift. “Uber of aviation,” and while plenty of apps make this claim, Statistics from market analyst Argus support these claims. The Argus no one has truly replicated Uber’s business model: connecting non- July TraqPak Business Aircraft Activity report (U.S. and Canada) showed regulated drivers with passengers. This model is not possible in charter operations up 9.6 percent compared with July 2014 and 6.1 per- aviation, unless the provider is willing to facilitate illegal charters. cent month-over-month. During the past year, charter activity rose 3.4 per- This special report examines the current state of the charter indus- cent, and Argus projects an increase of 4 percent during the coming year. try and some of the developments that are affecting operators and the The charter industry doesn’t change much, but the way charter brokers that account for the majority of charter bookings. FOCUS ON Aviation, Panorama Flight Services, GROWTH Midlantic Jet Aviation, Galvin Avi- ation, TWC Aviation and Sterling Landmark Aviation, headquar- Aviation. Five of the companies are tered in Houston, has acquired a sig- being consolidated under one char- nificant number of operations and ter certificate (Sterling Aviation’s), now has 120 airplanes under man- while TWC Aviation will retain www.ainonline.com agement, 70 of which are on charter its own charter certificate, but all certificates. Landmark’s acquisi- charter and management will be tions include Piedmont Hawthorne branded under Landmark Aviation. “We worked closely with the FAA to design that plan,” said Ben Murray, president of Landmark’s Aircraft Management & Charter Jet Aviation is seeing more demand for division. The consolidation includes large-cabin aircraft such as the Global 5000. merging information technology, human resources, financial and legal Owners get great value by being services and providing shared ser- chief attractions for customers, part of that family,” he said. vices for charter and management he said, is that the company can One factor that is driving Land- sales and dispatch functions. support customers across the U.S. mark’s management business, Mur- Landmark’s charter/manage- “Customers want to leverage Land- ray said, “is a real demand dynamic As companies move to ownership, ment division is adding an average mark’s network of FBOs and main- where there is more demand than customers seek management opportunities, says Landmark’s of seven new aircraft per quarter, tenance bases, and they benefit from can be fulfilled with the availabil- Ben Murray. according to Murray. One of the Landmark’s national fuel program. ity of your charter fleet.” This is © 2015 AIN Publications. All Rights Reserved. For Reprints go to CHARTER REPORT Top U.S. Part 135 Operators in 2015 Fleet 2015 2015 2014 2014 Rank Operator Size Hours Flights Hours Flights Change 1 Travel Management Co. 69 40,025 27,255 40,193 26,792 1 2 Executive Jet Management 139 39,627 24,252 38,906 23,872 1 3 XOJet 42 39,386 18,524 40,642 18,717 -2 4 Delta Private Jets 60 26,437 17,868 19,568 13,495 0 5 Gama Charters 70 23,412 18,235 6,418 4,330 10 6 Landmark Aviation 80 18,458 12,855 15,845 11,263 0 Avjet expanded its fleet by 14 aircraft last year, with heavy jets, such as the BBJ, accounting for more than half of that number. 7 JetSuite Air 19 16,789 14,323 18,681 15,576 -2 8 Jet Linx Aviation 49 14,183 10,333 11,678 8,436 0 9 Clay Lacy Aviation 46 11,939 6,349 10,683 5,604 0 Guarantee Programs 10 Solairus Aviation 39 11,303 6,297 9,218 5,236 0 According to Delta Private Jets, much of its growth is attributable to its 11 Jet Edge 35 10,379 5,216 7,353 3,697 3 Ownership Assist Program, which guarantees charter hours to aircraft own- 12 Jet Select 25 9,904 6,214 8,166 5,112 -1 ers and covers most operating costs, including maintenance expenses such as engine and parts programs, airworthiness directive and service bulletin com- 13 Kalitta Charters 21 9,402 6,053 7,494 4,969 0 pliance, paint and interior refurbishment and scheduled/unscheduled mainte- 14 Jet Aviation Business Jets 29 8,075 4,176 7,596 4,041 -2 nance. “The owner benefits by a guaranteed revenue stream, and we benefit 15 Red Wing Aeroplane Co. 10 7,252 4,420 6,224 3,719 1 by having the aircraft available for our charter and jet card customers,” the company noted. 16 LJ Associates 23 6,600 5,834 6,087 5,286 1 There are three different guaranteed programs at Delta. Ownership Assist 17 Meridian Air Charter 22 6,495 4,186 6,023 3,875 2 is for owners with limited needs to fly on their aircraft. These aircraft are more 18 Talon Air 20 6,452 5,122 6,015 5,218 2 readily available for charter and thus are used in the operator’s floating fleet. There is a waiting list for this program, according to Delta. For owners that fly 19 Starbase Aviation 20 5,871 3,670 6,050 4,147 -2 fewer than 100 hours per year, aircraft are placed on the high-utilization Air- 20 Mountain Aviation 15 5,788 4,343 5,443 4,179 4 craft Deployment program. These aircraft also serve on the floating fleet. The 21 Pak West Airlines 11 5,702 2,059 4,350 1,752 8 Charter Management program helps owners defray some of the costs of own- 22 Priester Aviation 23 5,608 3,793 6,014 4,051 -1 ership, but these owners fly more than 100 hours a year. Unlike many charter/management companies, Priester Aviation also offers 23 Corporate Flight Management 21 5,490 5,399 4,016 3,790 10 guaranteed flight hours, thanks to strong demand in key markets such as New York, 24 Ultimate Jet Charters 8 5,481 5,599 5,437 5,176 1 Dallas, Houston and Chicago.n 25 Northern Jet Management 11 5,388 4,441 4,047 3,330 7 causing customers who are typically to Bombardier Global 6000s and also owned by Berkshire Hathaway, with Jet Aviation. “We haven’t seen charter and fractional-share buyers Gulfstream G650s, with super-mid- further expanding the purchasing any huge growth or decline on the to move into ownership, where they size and large-cabin types account- power opportunities. charter side.” have guaranteed access to their air- ing for approximately half the fleet. Like all management compa- While Jet Aviation’s charter/man- craft. Customers like having Land- Molsbergen attributes some of nies, EJM is acutely aware of the agement fleet includes some smaller mark hire flight crew, take care of EJM’s growth to the complexities of need to preserve the value of its jets such as Citations, the focus is large- www.ainonline.com maintenance and provide hangar aircraft ownership, including more customers’ assets. “If nothing else, cabin airplanes, typically Dassault Fal- space and fuel, he explained. sophisticated avionics systems and I see EJM more as an asset manage- con 2000 size and up. About 40 percent “Flying has been robust,” said complex flight operations, tax rules ment company than anything else,” of the charter flown by Jet Aviation’s Robert Molsbergen, president and and financial reporting. “You have Molsbergen explained. “You can- U.S. fleet is international, he said, COO of global aircraft management either flight departments or indi- not underestimate the difficulty of including the occasional trip to Asia. for Berkshire Hathaway-owned vidual owners and operators who making sure that customers or pro- The firm’s European division serves Executive Jet Management (EJM). would rather see that handled by spective customers understand that customers primarily in Europe, the The EJM charter/management fleet a management company to make the value you have to bring is mea- Middle East and Asia. has grown more than 8 percent from sure they do that part right,” he sured only at the time of disposal. The company’s U.S. fleet num- last year and now stands at 210 air- explained. The better you do that, the better bers 97 aircraft and should reach craft and is expected to reach 225 As probably the largest charter/ you take care of the asset, the bet- more than 100 by year-end, Halo- by year-end. Approximately half management company in the world ter [the results] at disposal.” burdo said. These are located at the fleet is on EJM’s charter certifi- by fleet size, EJM enjoys substan- “From an activity perspective, about 40 airports, and most of the cate, “and a big portion of our fly- tial purchasing power. It doesn’t we’re about on par with last year,” aircraft are pure management clients, ing is done internationally,” he said.