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 fewer than 20 workers, and generates $14-15 million annually.

    • The chartered air passenger services industry consists of about 1,300 companies that employ about 32,000 workers and generate $19 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

                              May 4, 2024 - Industry Prices, Labor Costs Increase
                              • Chartered air passenger services moderately increased their prices during 2023 to match increasing demand for their services, according to the US Bureau of Labor Statistics (BLS). Employment and average wages for nonsupervisory employees increased moderately during 2023, according to the BLS.
                              • The Federal Aviation Administration (FAA) is 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.
                              • The US Environmental Protection Agency (EPA) has determined that lead emitted from airplanes is a danger to public health. Some experts say that the finding opens the door for the agency’s first limits on lead fuel in aviation. More than 170,000 smaller planes, known as piston-engine aircraft, still use leaded gasoline, according to the EPA, and there is an ongoing dispute about how quickly this form of fuel can be phased out at thousands of US airports. The Federal Aviation Administration said in October that it will move forward with rulemaking aimed at controlling or eliminating aviation lead emissions from piston-engine aircraft.
                              • The Federal Aviation Administration said that it plans new rules to 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.
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