Case Study: Charter Jets And The Economic Downturn

Charterjets.com provides an in-depth look at a corner of our industry, offering our observations, expertise, and predictions for the future.

The Private Jet Backlash

It’s 2009, and huge individual bids for pricey jets are a thing of the past. Competition among multi-millionaires for the latest and greatest corporate aircraft is no longer aggressive and fevered.

With examples of private jet misuse on the front of the financial pages, private and charter jets have taken a massive public relations hit. There’s no easier target for populist rage, and the problem was only made worse in 2008, when the executives of the three major car companies pleaded with congress for massive bailouts — all while flying in on company planes.

Automakers and Their Planes

By a certain point in the hearings, the issue of the private planes became far larger than the issue of the car companies, and the idea of a private jet came to stand in for all that was wrong with the overloaded automakers. The thinking went something like this: if the executives could fly on a private jet to beg for a bailout, there was absolutely no way they were capable of spending that bailout money wisely.

This PR misstep has had costly implications for the market as a whole, especially since - according to the New York Times - 85 percent of corporate fliers are not tycoons or executives, but rather small, specific passengers needing to reach a particular destination not served well by commercial aviation.

But that point got lost in the public outcry, and at this juncture, GM has actually closed down its air transportation services unit, putting the majority of its planes on the open market. Ford has done the same thing — both forced into doing so as a condition of their government bailouts. This behavior has led to further sell-offs across the corporate sector: some to trim unnecessary excess, others for PR reasons alone.

Who’s Suffering the Most

This means that aircraft inventory is up, and demand is down. But while the industry as a whole is suffering, it’s worse in some areas, and not as bad in others.

So which sector is hurting the most? That would be the large-cabin, long-range jets, designed for international travel. Long distances mean massive costs, and the huge price tags for these flights are anathema to the current business community (save Bill Clinton’s recent private jet mission to North Korea).

When it comes time to cut costs, it’s just that simple: layoffs are a PR disaster, and eliminating corporate jets are — currently — a PR boon.

Finding Some Positive Signs, Especially for Charter Flights

But most of these cutbacks are coming to company-owned planes. Charter planes are still doing a brisk business, all things considered, and many corporate flights that would once make use of an individual company plane are now being booked on the more - competitive charter market - precisely the one served by CharterJets.com.

Since aircraft ownership costs are currently lower than ever  - thanks to the saturated marketplace - competition among charter jet companies is on the rise. This means lower prices for the consumer - if they can find the great buys - and CharterJets.com can help you do that.

Understanding How to Value Your Time

One of the ultimate benefits of charter travel is time efficiency. If you have business to do, and it has to be done at a certain time, in a specific, under serviced destination, think about it: there are times when the hassles, delays, and scheduling options of commercial travel are simply unfeasible.

It comes down to the most cost-effective use of your time. A day spent traveling to a destination that could be reached in a couple of hours on a charter jet can mean the difference between a closed deal and a lost one, and the work that can be done (especially in groups) on a chartered plane means you’ve got an instant, airborne office — nearly impossible with commercial travel, even in business class.
According to Irish company Jetbird, more than half the time spent traveling on a commercial carrier is spent waiting, and 18 percent of the time is spent traveling to and from the airport. Only 29 percent of the total travel time is spent in the air. Whereas private travel can have a waiting time of as little as 5 minutes, meaning nearly all of that time is spent traveling - and working.

Our Final Thoughts

Private and charter jets have taken a serious hit recently, but when you look beyond the headlines, most of the outrage is directed at what the public believes are excessive, unnecessary corporate flights by well-compensated executives.

The majority of private flights are the exact opposite of that, and the market remains and will continue to remain essential for global business. The market for aircraft is currently saturated, meaning the exclusivity - and excessive prices - of past years are long gone. There has never been a better time to book a charter jet.