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 1,300 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

                              Recent Developments

                              Dec 2, 2022 - Fuel Price Decreases
                              • Aviation fuel prices decreased 1.2% month over month in October, according to the US Department of Transportation’s Bureau of Transportation Statistics. Prices fell even as usage increased due to a rebound in air travel. The price of aviation fuel remained elevated, however, at $3.45 per gallon in October compared to $1.93 per gallon in the pre-pandemic month of January 2020.
                              • The Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed in early October to slash output by two million barrels of oil a day. Experts say that move may boost already-high global energy prices. The production cut is the biggest from the group since April 2020, signaling its intent to keep prices high after enduring seven years of a relatively subdued market. OPEC+ members called the decision a technical response to a flagging global economy, especially in China, where COVID-19 restrictions have hurt oil demand. Experts note, however, that there is considerable uncertainty about how deep the cut in oil production will go. Most OPEC+ members regularly fall short of their production quotas because of low investment and will not trim production much if at all. Richard Bronze of research firm Energy Aspects estimates that the actual cut will be about one million barrels a day.
                              • High jet fuel prices will continue to put pressure on the air transportation cost base for the rest of the year, according to the director of the International Air Transport Association (IATA). The ‘crack spread’ – or the difference between the price of crude and jet fuel price – is at its widest since the beginning of the year, said Willie Walsh. Walsh also noted that refiners, who were quick to turn off their jet fuel taps when demand waned, have not been increasing supply as demand recovers.
                              • The No Surprises Act, which went into effect in December 2021, may have prevented more than two million surprise billing claims in its first two months, according to a survey from AHIP and the Blue Cross Blue Shield Association (BCBSA). AHIP and BCBSA surveyed 31 commercial health plans and group health plans, asking them to share how many claims they had received that would have resulted in a surprise bill without the No Surprises Act in place. Such claims include emergency services by out-of-network providers, air ambulance services, and non-emergency services and products offered by an out-of-network provider at an in-network facility. The survey result exceeds the government’s projections that the No Surprises Act would result in 17,000 independent dispute resolutions each year.
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