The question is often asked, “Why don’t we just charter a plane?” There is a widely held misperception that charters are always less expensive than scheduled air. This is both true and false depending on the demographics of your group. It is true that the lowest capacity controlled, advance purchase, non-refundable and more restrictive airfares are the least expensive fares. However, the key words here are “Capacity Controlled“, “Advance-Purchase ”, “Non-Refundable” and “Restrictive”. These rates work well for individuals who have flexible travel times and dates, but not for groups unless the group demographics are such that there are few participants originating in the same city.
Capacity Controlled – Each airline only allocates a limited number of seats in their lowest price “buckets”. Once they are gone, they are gone and Yield Management can change the number of seats in these buckets daily and even hourly. If there are a large number of participants originating in the same city only a small percentage of participants will secure the lowest price seats. The rest will all pay the higher fares. Therefore, using the lowest published fares as a cost benchmark when planning a group program is a grave mistake.
Advance-Purchase – Most group programs are planned far in advance; often more than a year in advance. The scheduled airlines do not even upload fares or flight schedules until 360 days prior to their departure date. In addition, at the time of planning, the meeting planner has no idea who will participate so there are no names to purchase in advance. By the time the participants are known, these advance-purchase fares are already sold out.
Non-Refundable – Even if the advance-purchase seats are available and the names are known, the tickets are non-refundable. This means that if the meeting dates are changed, an employee dies, is terminated, retires, etc. the purchaser is stuck with a ticket that has been paid for and cannot be used.
Restrictive – The lowest fares are almost always pattern specific. They usually require a stay over the weekend and are only valid for travel in both directions on certain days of the week.
What Does this Mean? It means that you may have to base your projection for the group on the full coach fares. They do not require advance-purchase, they are refundable and they are unrestricted. They are normally available —– UNLESS —– you have a large number of participants originating in the same city. This will mean using multiple airlines departing and arriving at different times increasing transfer costs due to both these different times and flight delays.
Result – Charter rates begin to look very favorable. Despite the fact that they have to fly empty to the city of origin and then fly empty from the destination city back to their base, then empty back to the destination to pick up participants and back again to their home base empty, they can be competitive. In addition to being competitive, they offer non-stop service, excellent in-flight service and a level of service and branding options not available on scheduled carriers.
Why Not Negotiate with the Scheduled Airlines? It is true that the airlines offer “Zone Fares”, “Group Fares” and Meeting & Incentive” agreements, but have you ever looked at them? Since 9/11, these rates and terms are of little value. Yes, you can block seats on specific flights and times, but there are advance deposits, utilization requirements and again the number of seats that will be allocated at these rates on a given flight is limited.
The above are just a few of the reasons why planners consider chartering. What if the group is going to Tamarindo in Costa Rica or Nevis, St. Kitts or Casa De Campo where air lift (the total number of seats per day) is limited or even less than the size of the group.? A charter is the only option. What if the group is originating from Portland Maine, which has limited lift? A charter again becomes the only sensible option. What if you are moving a group to Super Bowl, the Olympics, the Kentucky Derby or some other event leaving the planner with sold out scheduled service?
Types of Charters
Benefits of Chartering both Large and Small Aircraft
- Flying Direct / Point-to-Point Transportation
- Exclusive Use of an Aircraft
- Security / Direct Control of your Passenger List (Manifest)
- Use of Alternate Airports / Avoid the Busiest Airports
- Preferred Departure and Arrive Times
- Custom in-Flight Services
Categories of Charters
Single Entity: often referred to as an Ad Hoc Charter
- This is the most widely used. In this situation, an aircraft meeting the specific needs of a group is acquired. Charterer pays entire price of charter. Passengers pay nothing directly or indirectly. Contract must be in the name and address of the entity actually paying for the trip, not in the agent or brokers name.
- Charterer is a membership organization and only members and their immediate families are eligible to participate in the charter flight. All passengers must pay the same pro rata rate except children may pay less.
Controlling the otherwise uncontrollable!
A company may simply wish the convenience of controlling its own flight schedules to enhance the value of its program. At Corporate Cruise Consultants, we assess the relative merit of a charter given your specific needs, desires and demographics and acquire the appropriate pricing and aircraft for the job maximizing and balancing the value of both charter and scheduled aircraft. We will always suggest air charter if the demographics of participants and scheduled service to the selected destination warrants. We have resources worldwide to help secure reliable equipment of every size.
For questions all us at 561-625-1951 or complete and submit the request for pricing by:
Air Charter RFP