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

                              Mar 4, 2023 - Refiners may Struggle To Meet Jet Fuel Demand
                              • Global refiners may have difficulty meeting sharply rising jet fuel demand this year, with increased capacity falling short of the expected growth in demand and most new plants starting up too late for the summer season, according to New Energy Intelligence. New refining capacity will be partly offset by an expected reduction of supply from Russia. Net additions will yield around 535,000 barrels per day (b/d) more middle distillates, less than the expected 717,000 b/d in jet fuel demand growth this year. Jet fuel supplies are expected to gradually increase during the year as more secondary and upgrading units come on stream. Up to 2.5 million b/d of new refining capacity is due on line by the end of the year, most of it in Asia-Pacific and the Mideast. The bulk won’t reach full production until the fourth quarter, however, too late for peak summer airline fuel demand.
                              • There is momentum toward greater sustainability in the travel industry, according to Jesko Neuenburg, global travel and aviation industry lead for consulting firm Accenture. Initiatives include synthetic fuels and electric aircraft, connected “smart” systems within the Internet of Things, hybrid low-emission vehicle fleets, and artificial intelligence that can optimize resources and maintenance. About 83% of global travelers think sustainable travel is vital and 69% seek out more sustainable options, according to the A Net Zero Roadmap for Travel & Tourism report from the World Travel & Tourism Council and Accenture.
                              • The International Air Transport Association (IATA) expects a return to profitability for the global air travel industry. The expected improvement comes despite growing economic uncertainties, with global GDP growth predicted to decrease to 1.3% from 2.9% in 2022. Lower oil price inflation and continuing pent-up demand should help to keep costs in check as the strong growth trend continues.
                              • High jet fuel prices will continue to put pressure on the air transportation cost base, 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 widened considerably in 2022, 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.
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