Aircraft charters has mostly been provided for the purpose of leisure, pilot training, and aerobatics instruction. These types of services were mainly provided by independent charter companies without the help of any intermediaries. Since there was a lack of intermediaries, business travelers and companies used other alternatives for their travel arrangements.  These alternatives include:

- Fractional ownership of aircrafts. Each member owns a share in the corporate aircraft. Ownership includes an initial fee to join, a monthly membership fee, and an hourly fee for aircraft operations. Since companies in this situation are an owner, part of the initial and monthly fees build a cash rebate for them.
- Travel Agencies.  The business travelers simply refer to a travel agency for booking flight itineraries. Travel agencies, in the past, have had the biggest market share for corporate transportation.  However, now some travelers are abandoning airlines, and their airports, altogether. Corporate and first-class travelers are looking for alternatives — moving away from large, commercial airlines and airports and beginning to move towards private or chartered planes at so-called general aviation airports such as Leesburg in Virginia and Teterboro in New Jersey.

The market for business jets has tripled over the last four years. Even if people are flying first class or business class, if the flight doesn’t leave, they don’t leave either. Customers tend to want smaller planes and with more flexible flight times.

With the increasing needs of business travel, that is flexible, comfortable, and affordable, many charter companies have entered the aviation market.  These companies own there own fleet of aircrafts.  Traditionally they have advertised in the local yellow pages, ads in business magazines, or special industry magazines.  However, with new wave of the Internet, many of these charter companies have designed their own web sites.  Most of these sites are more of an informational site, rather than one where you can book a flight directly.

E-Intermediaries
 

In the shadow of new technologies such as email and teleconferencing, face-to-face contact becomes an entirely different kind of business tool.  Many orgainzations are using business trip only to finalize deals with their prospective clients.  A significant number of traveler planners have reported an increase in their use of charter for these premium trips, where impression is everything.  Instead of twenty business trips each year, an executive now makes only three, but those trips carry a loaded agenda and are of most value.

Today's business traveler takes advantage of their trips by making several stops to different cities during their trip.  These “road shows” are invaluable for maintaining strong business relationships.  This particular kind of travel is not supported by the scheduled carriers.  Too often the choice is between leaving a productive client meeting to catch a plane, or paying for multiple hotel rooms.  It’s a delicate balance to make good use of the e-business tools, but successful organizations always remember that human relationships, including face-to-face contact, is what gets and keeps business.

Chartered and general aviation aircraft fly 26 million hours annually (almost twice commercial airline flight hours) and carry more than 145 million passengers.  Air charters provides more flexibility, destinations, comfort, and control of a traveler’s trip itinerary than any other air travel option.  With the consolidation of the major airlines, commercial carriers utilize approximately 500 airports in the US. And reliance on the hub system means more than two thirds of all commercial flights actually go through only 55 cities.  By chartering your own plane, you have access to more than 5,000 airports serving just about any community you need to reach.

Air charters offer several advantages over commercial flights. First, direct flights cut travel time 10-60% or more, freeing up time and increasing productivity. Second, the flexibility. One can even change course en route which allows for more productive and pleasant trips.  Third, it offers a quiet, private atmosphere. Fourth, it costs less than the airlines if half the seats are occupied. And finally, it eliminates hassles/delays of main airport terminals.
 

Who are the Charter users?

Of all user groups, the greatest consistency and commitment to this type of aviation comes from those executives that make their own travel plans directly rather than using and agent, planner, or flight department to book a flight.  Reported volume of travel from this group remains high. They cite the cost, convenience and quality service as key influences in their decision.

New executive users have reported anecdotal “hell trips” on scheduled airlines as the main impetus to try charter. Airlines have gotten so expensive and so unreliable lately.  Some executives have returned to charter after trying fractional ownership.  Some of these report that the programs offer no more convenience – only double the price.

How does it work?

Executives currently can go directly to the web page of one of the charter companies, or they can go through an E-Intermediary that specifically provides the services of on-line reservation booking, such as FlightTime.com.  These companies have different search capabilities for finding and available aircraft.  Typically companies have a page on their site where you can input your flight requirements.  Once you submit your requirements, the site does a search in its database for available aircrafts.  It gives back the results and a quotation.  Other sites provide a listing of open legs of charters that already exist.

There are over 3000 charter companies. For a partial list, please click here.
 

Pricing/Revenue Model
 

The above table indicates the revenue model for typical charter companies. From this model we can see the benefits for the business traveler as well as the costs for the charter companies.  The average full fare ticket booked through commercial airlines is $1500.  Through the charter service, one can save up to $500 or more, depending on the number of travelers and the aircraft size. The National Business Aviation Association suggests that for business flyers who use business jets 50 to 100 hours per year, air charter is the most cost-effective choice.

Featured Company: FlightTime.com 

FlightTime.com has been in existence since 1985, specializing in providing premium air charter to travelers worldwide.  It has offices in Boston, New York, Washington, DC, Atlanta, Miami, San Francisco, Los Angeles, London, Amsterdam, Bremen, and Milan, which puts FlightTime.com in a unique position to ensure that even the most complex travel missions are a success.

FlightTime.com’s annual revenues are expected to reach nearly $50 million this year, up from $35 million last year. Annual 2001 revenues are expected to reach $100 million, a result of current measures and planned innovation.

FlightTime.com’s partnerships: Airbus Integrated Company, European consortium of aerospace companies, and Private Air.