Chartered Air Passenger Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,400 chartered air passenger service companies in the US provide air transportation for passengers and related cargo with no regular routes or schedules. Firms may also offer aircraft maintenance and repair services. Chartered air passenger operators generally fly aircraft with 30 seats or less and a payload capacity of 7,500 pounds or less, according to the FAA. Fractional aircraft ownership allows travelers to purchase “shares” of a plane and a set number of flight hours, depending on the investment.
Variability in Jet Fuel Costs
Chartered air passenger travel providers struggle with variable jet fuel costs, which fluctuate according to global market conditions.
New Business Models
Entrepreneurs are leveraging new business models and disrupting the chartered air travel industry.
Industry size & Structure
The average chartered air passenger services provider operates out of a single location, employs fewer than 20 workers, and generates $17-18 million annually.
- The chartered air passenger services industry consists of about 1,400 companies that employ about 34,000 workers and generate $25 billion annually.
- The industry is concentrated; the top 50 companies account for over 70% of industry revenue.
- Large traditional chartered air passenger services firms include Executive Jet Management, XOJet, and Travel Management Company. Large fractional ownership firms include NetJets, FlexJet, and FlightOptions.
Industry Forecast
Chartered Air Passenger Services Industry Growth
Recent Developments
Nov 6, 2024 - Commercial Bankruptcies Continue Increasing
- Commercial bankruptcy filings, an indicator of corporate demand for chartered air passenger services, increased 8% year over year in October, according to Epiq AACER, a provider of US bankruptcy filing data. There were 563 commercial chapter 11 filings registered in October 2024, down 13% from the 647 filings registered in October 2023. Small business filings, captured as subchapter V elections within chapter 11, totaled 202 in October 2024, an 18% increase from 171 in October 2023.
- The Federal Aviation Administration (FAA) has proposed amendments to public charter flight safety regulations. The proposed amendments, which are intended to align safety standards for public charter flights with those of scheduled airlines, redefine “scheduled,” “on demand,” and “supplemental” operations. They also include new safety standards for small community and rural air services and propose a new operating authority for Part 135 operations in 10-30 seat aircraft. The FAA said that the proposals address public charter operations “in light of recent high-volume operations” that make these flights “essentially indistinguishable” from scheduled carriers. Operators like JSX and Aero, which merge the distinction between scheduled and charter airline operations, have caught the attention of US regulators after aviation labor unions and other groups said that the companies are skirting air safety and labor rules. Among the changes could be requirements for how many hours of flying pilots need, which would make hiring more difficult given the competition for pilots with the major carriers and regional airlines. Passengers and crews would also likely face the same longer queues for security screening at large passenger terminals, potentially moving flights from private terminals at the same airports.
- The Federal Aviation Administration (FAA) is also finalizing new rules requiring charter, commuter, air tour operators, and aircraft manufacturers to implement Safety Management Systems (SMS), a safety tool aimed at reducing accidents. SMS are a set of policies and procedures to proactively identify and address potential operational hazards. US airlines have been required to have SMS since 2018 and some aerospace companies already voluntarily have SMS programs. The National Transportation Safety Board has urged the FAA to require and verify the SMS systems in all revenue passenger-carrying aviation operations.
- Total revenue for air transportation increased 3.1% year over year and 16.4% quarter over quarter during the second quarter of 2024, according to the US Census Bureau. Chartered air passenger service industry employment increased significantly while average wages for nonsupervisory employees decreased moderately during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Chartered air passenger services increased their prices slightly during the first seven months of 2024, according to the BLS.
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