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About Private
Aircraft Charter
From Wikipedia:
The term air charter is a phrase that refers to the renting of an
entire aircraft as opposed to individual aircraft seats. While the
airlines specialize in selling transportation by the seat, air
charter companies focus on small groups for specialized itineraries,
urgent or time-sensitive freight or cargo, air ambulance and any
other form of ad hoc air transportation.
Generally speaking, air charter is also known as air taxi, executive
charter, jet charter and more broadly as private aviation. In the
United States, air charter and air taxi operations are governed by
Part 135 of the Federal Aviation Regulations, unlike the larger
scheduled airlines, which are governed by more stringent standards
of Part 121 of the FARs, which are regulations designed for
scheduled air carriers.
It is believed that over 70% of the private air charter in the world
is within the United States, the largest market for private aviation
globally.
History
Aircraft charter can trace its roots back to the dawn of civil
aviation. The true growth, however, or corporate aviation and
related air taxi, air charter suppliers, boomed following the close
of World War II. With excess/surplus aircraft (lower start up costs)
both corporations and stand alone air charter companies entered the
business of dedicated charter flights for executives, high end
travelers, special missions (such as organ donor flights, critical
auto parts freight, etc.), sports teams, entertainers, etc.
Technology and Business Structure
The 1960s saw the arrival of the first small jets, such as the
Learjet. The Learjet was adopted by some of the first jet air
charter operators, such as Hop-A-Jet and Clay Lacy. Both companies
still exist today as larger charter management firms. Charter
management became popular at the dawn of the private jet age as a
way for companies to own aircraft "off their books" - namely away
from the prying eyes of shareholders. Local entrepreneurs realized
that by managing the aircraft that belonged to another entity (one
that could afford to buy the multi-million dollar aircraft) they
could help offset the cost of ownership through rental income and
aggregate owner costs for insurance, fuel, maintenance, etc. Today,
this type of aircraft ownership arrangement forms more than 75% of
the on-demand air charter industry for the United States, which
encompasses about 70% of the air charter activity in the world.
In 2004, the FAA began the process to re-regulate the Part 135
industry, mainly due to the widespread problems created by the
tension between aircraft owners and management companies. The FAA
felt that air carriers (the air charter companies) had in some cases
begun to lose operational control. The term "operational control"
indicates that an air charter company can know where and when its
aircraft are at all times and dictate their movement. The
complications caused by these owner relationships and historically
minimal FAA oversight was fertile ground for the air taxi
revolution.
Growth Factors
Beginning in the late 1990's the air charter / air taxi interest
moved into mainstream media and discussion with the growth and
advent of several key factors:
Very Light Jets or VLJs popularized the concept of small affordable
jets that would bring the capital carrying cost of aircraft down
enough so that many more could be sold and operated. Eclipse
Aviation is perhaps one of the most well known new aircraft brands,
although other companies including Adam Aircraft, Cessna, Honda, and
Embraer have designed or built VLJ's of their own. While the air
taxi debate is concerned with whether these aircraft will actually
contribute to change, the mere discussion, media coverage and
excitement over new technology is bringing more and more attention
to the concept of ad hoc air transportation.
Internet Communication: Because air charter was never part of the
major GDS or travel distribution systems, it could not reach wider
audiences. With the advent of the Internet, distribution of
information regarding the availability of aircraft, placement,
pricing etc., became more available to the increased broker and
buyer community.
Problems: Growing dissatisfaction with the scheduled airlines over
security and congestion related delays. While not all airline
passengers could afford alternatives, the upper echelons of airline
passengers sought was to stop flying commercially or exploring
corporate aviation, fractional or air charter.
Alternatives: Fractional ownership programs popularized the notion
of private aircraft use and ownership. Fractional aircraft
ownerships growth led to the advent of a distinct set of regulations
in the United States designed specifically to regulate fractionally
owned aircraft companies. These new regulations are spelled out
clearly in Part 91 Subpart K and bring fractional aircraft
operations into line with existing air charter regulations, making
fractional ownership into simply another flavor of ad hoc air
transportation.
Aircraft manufacturers, such as Eclipse Aviation and Adam Aircraft
Industries, maintain that the construction of cheaper, smaller and
faster jets will enable inexpensive point-to-point private aviation,
creating a new industry. Others maintain that these new aircraft
will lower the barriers to ownership enabling more wealthy
individuals to own jet aircraft, but will not result in their wide
adoption for commercial applications. Critics [1] [2] argue that
basic economics, demographics, industry inertia and operational
constraints will automatically limit the birth of an air taxi
industry.
Recent Developments
Due to the synergies of a number of technological advancements,
some aviation professionals foresee the middle class traveling
easily and with much less expense than is currently possible, using
VLJs (Very Light Jets) and other types of comparatively inexpensive
aircraft. New technologies in engine design, airframe manufacturing
methods, computer aided design and avionics as well as ATC upgrades,
many say, will come together to drastically reduce cost while
increasing efficiency, comfort and safety. These aircraft (such as
the Eclipse 500) are said easier to fly and much cheaper to produce
than current production jets. 5,400 small airports across the United
States make point-to-point air travel on smaller jets quicker for
travelers than the airline hub and spoke system. Next generation
avionics and systems may also make these small airports accessible
even in poor weather conditions.
Skepticism of Change
Despite the substantial investments by firms such as DayJet,
other aviation professionals remain skeptical on whether we can
expect this mode of travel to flourish due to the decreased cost of
personal air travel. The primary obstacles being that aircraft
utilization is the largest limiter in reducing costs of operation
(fixed overhead) not necessarily advancements in technology.
The most notable evidence / example of this problem is the fact that
direct operating costs of VLJs are not substantially lower than
existing turbofan and turboprop technology that can carry larger
loads, greater distances, and in some cases for a smaller initial
investment.
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