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Why Charter Your Aircraft?

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Chartering provides net profits for the management companies that arrange it and an opportunity to spread costs for owners.  For this reason it may make sense for some aircraft owners.

An airplane sitting in a hangar is still costing money even if there are no variable costs like fuel and ramp fees or other trip related expenses.  Many other costs are fixed. Crew for example must be paid, calendar scheduled maintenance must be performed, and maintenance and hangar charges will continue to be billed, etc.

Increasing total annual flight hours through chartering spreads these fixed expenses over a greater number of flight hours which, all else being equal, reduces the annual fixed cost burden for owners.   As long as the charter revenues completely cover all variable trip costs and a fair portion of the fixed costs the net annual impact is positive for the owner whose total fixed costs will be lessened.  But there are important limits that need to be considered.

At the end of the day it is a matter of preference.  Charter hours will be of value to some owners and not others.  An overly busy charter airplane may result in access limitations for the owners, particularly for trips that arise on short notice.  If the airplane is heavily used by the owner the marginal value of charter may be minimal.

As well, too much charter will accelerate hour and cycle based maintenance expenses as well as adding to the wear and tear of the airplane.  This will add to costs, particularly with older aircraft.

And frequently, owners put a value on privacy and do not want third parties to have access to their aircraft.  In short, there is simply no general rule when it comes to the decision to make an aircraft available for charter.  Owners should ask their managers to project the financial implications and, if the charter option is taken, a protocol securing owner approval should be established.

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