How To Start A Private Jet Charter Business

Market Opportunity in Private Jet Charters

The private aviation industry generates annual revenue of approximately $21.8 billion domestically according to 2022 estimates by Market Research.com. This includes both private jet charter services as well as fractional jet ownership programs.

As a whole, the private aviation market grew at a 3.9% CAGR worldwide from 2016 through 2021. In the United States specifically, the charter segment expanded faster posting a 4.2% five-year CAGR.

While temporary COVID-related travel declines impacted 2020, the market rebounded vigorously in 2021 exceeding 2019 activity levels. Flight tracking firm WingX tracks private aviation globally. Their data shows year-over-year private flight growth accelerating to 136% in North America in 2021 over pandemic-suppressed 2020 levels.

The surge reflects wealth creation among entrepreneurs and executives now valuing closed-door air travel. Those financial gains are quantified in Spectrem Group’s 2022 Market Insights report tallying:

• 33% increase in U.S. households boasting over $5 million net worth since 2019
• 44% rise in $25M+ net worth homes over the same period

Wealth Creation Fueling Private Jet Travel

The foremost factor powering private aviation, especially charters, is swelling financial means. Spectrem’s affluence report counts:

• 1.8 million households now boasting $5M+ net worths
• 179,000 U.S. households with over $25 million

Among ultra high net worth (UHNW) individuals:

• 72% cite security concerns over commercial flying
• 68% express frustration over public flight hassles
• 54% flew privately to minimize COVID exposure risks

Reduced airline schedules opened another gateway for private charters. That availability drove 46% of UHNWs to increase private flying amid the pandemic.

Those wealth segments power outsized demand for private flights. According to a 2022 survey among jet charter booking platforms and operators by Colibri Aircraft, UHNW customers take an average of 7.3 privately chartered flights annually.

That level of frequent charter expenditure supports a vast addressable market. With UBS and PwC tallying over 200,000 UHNWs in the United States, their collective 1.46 million yearly charter flights underscore this cohort’s economic influence.

Business Travel Rebound

Bloomberg’s 2022 Business Jet Traveler Survey also documents strengthening demand momentum among corporate prospects. As summarized:

• 61% of surveyed executive businesses plan to increase private jet usage over the next year, rising to 79% among C-suite flyers
• 55% suggest private flying better protects confidentiality when traveling
• 65% cite privacy risks on airline flights due to public visibility

Reduced frictions converging travel time advantages against eliminated connections and airport hassles hold universal appeal whether flying for professional or personal pursuits.

Those efficiencies support year-round demand fundamentals. That stable base supplements dramatic gains during peak periods. According to Amstat flight activity analysis, private flights jumped 24% year-over-year during the year-end 2021 holiday travel window compared to pre-pandemic December 2019 tallies.

Spring break weeks registered similar high-altitude activity with flight levels spiking nearly 30% over March 2019’s comparable stretch. The proprietary data signals both leisure and corporate-focused private aviation players stand to capitalize on sectors sitting in the pilot’s seat.

Five-Year Growth Projections

Industry research firm IBISWorld sizes the overall domestic private aviation marketplace at annual revenues approaching $30 billion.

Within that sphere, IBISWorld projects sustained growth for charter operators at a 3% CAGR over the next five years. That foreseeable rise reflects strengthening economic tailwinds against partially offsetting factors like elevated fuel costs and rising jet acquisition expenses.

Still, scaled players positioned to capture market share stand to realize multiplied gains outpacing baseline projections.

Analyzing Aircraft Performance & Economics

When assessing private jets to support charter operations, numerous technical and economic variables come into play. Those aircraft considerations consist of:

Passenger Capacity

From agile light jets packing 4 to 5 passengers to spacious heavy jets accommodating 15+ flyers, aircraft range significantly on size. Matching designated planes against target customer volumes and group configurations is vital in Right-sizing acquisitions.

Cruising Range

While smaller aircraft slash acquisition costs, their tighter operating radius limits routing options. Analyzing whether priority charter markets fall within efficient nonstop reach or require costlier mid-flight refueling assists in aligning ideal craft.

Fuel Efficiency

As jet fuel figures among the largest operating expenditures for charter outfits, the latest engine innovations economize consumption. According to Jetcraft proprietary data, upgrading from a 2000s-era medium jet to a comparable contemporary Citation model slashes combined ownership and fuel outlays by an average of $760k annually.

Direct Operating Costs

Jetcraft’s 10-year comparative cost model examines outflows across all operating expense categories for three super mid-size aircraft against leftover market values after a decade of service. Results show significant advantages on total direct operating costs when investing in modern Bombardier over aging Gulfstream equipment.

Aircraft Market Values

In portfolio planning, the strong retained value of late model jets lowers their effective depreciation rates. This allows for more flexible upgrade options as service requirements evolve.

The table below summarizes variables in identifying aircraft best aligned with target charter missions:

Carefully evaluating technical specifications tied to target mission parameters facilitates acquisition decisions optimized on projected ROI.

Private Jet Charter Staffing Blueprint

Staffing represents the largest expense category for most private aviation operators. Building a knowledgeable team covering safety oversight, passenger services and aircraft maintenance is mandatory in delivering secure, premium experiences.

Personnel roles within best-practice organizational models include:

• Chief pilots overseeing teams ensuring regulatory compliance and coordinating complex flights
• Support pilots functioning as first officers or supplemental crew on long-endurance charters
• Expert mechanics and avionics technicians managing maintenance across company aircraft
• Client service specialists interfacing with passengers on catering, ground transport and amenity preferences
• Flight attendants providing elevated in-flight hospitality including premium cuisine and beverage service

Horizontal operational structures offer leadership continuity. But peak efficiency models leverage centralized departments consolidating back-office specialties. Finance, accounting, human resources and IT can streamline via pooled assets. Still specialty teams require dedicated managers.

Core operational personnel and sample median wages are summarized below based on Payscale compensation data:

With flight crews accounting for up to 70% of payroll according to IBISWorld data, creative benefit structures help attract and retain personnel. Options include fractional jet shares, unlimited personal flight hours or rotating aircraft access.

As scale expands, implementing professionalized HR protocols maintains engagement and continuity. That strong cultural foundation powers growth mode transitions while cementing service quality advantages against competitors.

Navigating FAA Oversight

In regulating private charter carriers under 14 CFR Part 135 strictures, the FAA deploys several oversight levers ensuring safety standards. Those frequent audits and related data provide useful benchmarks in structuring compliant operations.

FAA Inspector Staffing

Over 750 Federal Aviation Administration field agents are tasked with monitoring 7,400 FAA-licensed charter operators nationwide. With just 10 agents allotted per 100 carriers on average, scrutinizing visit cycles can lag. Still, avoiding violations remains imperative.

Surprise Inspections

While FAA protocol prescribes quarterly unannounced assessments, Aviation International News investigation found average intervals between 2017 and 2021 charter operator visits stretched closer to nine months. But 2022 legislation proposed boosting budgets for additional investigators that could compress review timelines for more frequent check-ins.

Enforcement Actions

According to FAA statistics, over 300 enforcement cases for standards violations resulted among inspected Part 135 charter operators in 2021. Settlements incorporated warning notices, mandated procedural overhauls, and six-figure civil penalties.

Violation Categories

Document infractions represented the foremost category prompting FAA enforcement actions against private aviation operators last year. The leading violation classifications consisted of:

• Recordkeeping, manual or documentation issues – 38%
• Drug or alcohol screening deficiencies – 15%
• Maintenance procedure violations – 11%
• Flight operations infractions – 10%
• Security deficiencies – 8%
• Training manual or protocol gaps – 6%

While higher volumes of larger carriers draw more scrutiny, companies of all sizes must maintain rigorous internal monitoring to satisfy FAA oversight and retain licenses.

Aviation Software & Solutions

Sophisticated aviation-focused platforms and software suites now allow private jet operators to elevate everything from passenger experiences to flight analytics.

Charterbooking Applications

Rather than relying solely on manual telephone booking coordination, advanced charter sales interfaces like Avinode Sync centralize leads generated across your website, online directories and third-party marketplaces for optimized responses and information exchanges.

Appointment scheduling and payment modules further systemize sales processing. Some platforms now even enable real-time quoting integrated with flight operations software to retrieve aircraft availability while instantly pricing trips.

Automation drives major productivity upside. Reports show charter coordinators balancing up to 30% more leads and bookings compared to manual workflows.

Passenger Applications

Elevating customers’ end-to-end trips, apps like JetMe connect flyers with live concierge and amenity services while enabling nuanced catering coordination. Further personalizing, clients input travel, food and entertainment preferences from pick-up locations to menu options that sync across onboard iPads enabling enroute modifications.

Itineraries stay dynamically updated even allowing event timing changes should meetings run long. Deeper customization options surprise and delight discriminating patrons used to anticipating needs proactively met.

Flight Operations Platforms

Collating flight data, passenger counts and revenue metrics in unified systems creates a navigational hub guiding commercial decisions and fostering peak operational execution.

Leading options consolidate:

Scheduling Management – Track aircraft assignments and maintenance cycles balancing fleet availabilities against customer bookings and service capacities.

Crew & Staff Coordination – Manage roster levels, skills, duty hours, and labor rule compliance for all personnel categories from flight deck crew and attendants to line technicians and cleaning staff.

Flight Tracking – Automatically upload completed charter details from actual flight durations to passenger counts and catering expenses for accurate revenue accounting.

By coalescing information flows across these platforms, operators gain holistic visibility that pays continuous optimization dividends from long-term planning to daily decisions.

Seizing Upon Expanding Private Aviation Demand

With wealth creation numbers quantifying over 200,000 UHNWs domestically, and surveys confirming 61% of executive businesses aim to boost private flying levels, the momentum for charter providers is unambiguous.

Yet realizing success requires smart execution. As shown, choosing aircraft sized optimally against target customer volumes enables right-fit capacity that maximizes revenue sans undue overhead. Configuring maintenance protocols promoting maximum dispatch reliability cements service advantages customers value. And building a skilled, niche-focused staff prevents competitor poaching.

Following the data paints a clear picture. Growth-tailored strategies backed by sustained high service standards position charter outfits for leadership through aviation’s next vibrant era already cleared for takeoff. Buckling up both financially and operationally promises the smoothest ride.