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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,300 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 22-23 workers, and generates over $12 million annually.

    • The chartered air passenger services industry consists of about 1,300 companies that employ about 29,900 workers and generate $16.5 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
                              Source: Vertical IQ and Inforum

                              Coronavirus Update

                              May 16, 2022 - Ruling That Ended Traveler Mask Mandate Appealed
                              • The US Department of Justice appealed a late-April ruling that struck down the US government's rule requiring masks to be worn on public transportation, most notably aboard airplanes. US District Judge Kathryn Kimball Mizelle said that the Centers for Disease Control and Prevention (CDC) exceeded its statutory authority and failed to properly justify its decision for imposing the mandate. The CDC had extended the mandate until May 3 just a few days before the mandate was struck down. The CDC issued a statement saying that it continues to believe that requiring masks in indoor transportation settings "remains necessary for the public health." CDC will continue to monitor public health conditions to determine whether such an order remains necessary, according to a statement from the agency. "CDC believes this is a lawful order, well within CDC's legal authority to protect public health."
                              • Industry watchers expected the drop in COVID-19 cases to boost air travel demand as Omicron was in decline and more countries reduced travel restrictions for vaccinated travelers. However, the outbreak of war in Ukraine dampened hopes for a rebound in summer travel. Airspace restrictions over Ukraine and parts of Russia and Belarus prompted airlines to reroute flights. Flying is also likely to get more expensive as the conflict pushed oil prices north of $100 per barrel.
                              • Firms are dedicating each pilot/crew to a plane rather than shifting crews across the fleet of aircraft to limit their exposure. Private jets also spend much less time in the air than commercial ones, leaving plenty of time on the ground to sanitize aircraft interiors between flights. Fractional ownership jet companies NetJets and FlexJet have announced they will fly pilots to and from their rotation shifts on their fleets instead of having them fly commercially. Some companies also plan to test all their crews for COVID-19 to reassure passengers.
                              • A study by Globe Air found that commercial passengers can experience as many as 270 person-to-person contacts while private flight passengers experience about 20. Coronavirus concerns could improve consumers’ value perceptions about private flights.
                              • The pandemic is expected to have long-term impacts on business travel. Digital workarounds such as Zoom meetings have made some businesspeople conclude that their pre-pandemic levels of travel were not worth the expense and time away from families. Even given the most positive possible COVID-19 scenarios, 2022 business travel is not likely to reach 2019 levels, according to an outlook by Deloitte. As of January 23, tickets sold through US travel agencies for business trips were 63% lower than they were at the same time in 2019, according to Airlines Reporting Corp.
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