Charter/fractional question


Island Bus Driver
I'm working up a mock business proposal for one of my courses and I came up blank on this one. Anyhow, the question is, how much repositioning does a fractional or charter company do of their aircraft? And how much lead time is there that the company knows where the a/c is headed before it leaves where it currently is? Aw heck, now I've even confused myself! Anybody?
in our company it goes something like this:

2 hour notice to wheels up, the sked folks will call you with as much notice as they can. we are very close to any of the major cites in the northeast and can make most of the Class D airports in under 20 min.

So there is no pre position issues.

If a customer wants a one way ride that is fine. But they pay for the return trip as well.. If the company picks up a trip that they can redirect the crew (even in the air) that is a bonus, nothing beats double dipping!!

If the customer wants a return tip, for example a east coast west coast gig, they have the choice of paying X hours a day for the aircraft to sit there, (our favorite!!) or they can broker out those down days as trips pop up.

As for the frax folks I don't have a clue I suspect it is more like an airline where they sked people have it all figured out weeks ahead of time.
I'm not a frax pilot but I have looked into these same issues, because I also put together a business proposal for a regional fractional program. If I remember correctly, deadheading accounts for about 30% of the flight time for frax aircraft. That was a number for one of the big operators, I cannot remember which one. Of course is only really an issue if you're planning on only charging the hourly fee for occupied hours. You could set it up where they pay the hourly fee for deadhead too.

As for lead time, I believe the frax operators guarantee an aircraft to be there within 4 hours after the call is made, depending on aircraft type. It's probably longer on the big aircraft due to the obvious limited number.

For large charter companies with aircraft stationed all over the country, they might guarantee a lead time, but most smaller charter companies will just tell you when they can be there by, and if that's good with you, then you're rolling. If not, then you have to find someone closer. (If the charter compnay is worth its salt, then IT will find someone closer to you, of course)

As far as charter companies go, it doesn't really matter to the charter operator how much deadhead there is, because usually the customer pays for any deadhead flights, so from a business standpoint it is all revenue hours.

As a side note, Frax operators advertise that you only pay for occupied hours, i.e. the time you're in the aircraft. Well, we all know that it costs something to reposition aircraft, and therefore those costs are passed on to the customers, albeit indirectly. So you DO pay for deadhead time, it just doesn't feel like you're paying for it. What ends up happening in the end is if you live close to a major city, then the time taken to position an aircraft for you is likely to be smaller than to re-position an aircraft to someone who lives way out in the woods. So the result (since the cost of system-wide repositioning is passed onto you, as a customer, through high monthly fees, or high hourly fees) is that you end up paying for part of the country-bumpkin's repositioning time. However, the convenience of being able to call and have an aircraft on your doorstep in a guaranteed 4 hours will be seen by many as worth the extra money involved in getting into a fractional program.

As a lineguy I see a lot of Frax guys. At the airport I work at most of the frax coming in are dropping off or picking up so one of the legs in or out is empty. So in a day if a frax job has 6 flights scheduled 3 might be empty ones. Now maybe at a TEB, IAD, HPN (busier frax places) they might come in with a load, wait two hours and leave with a totally different owner.

This is just my observation though. I am just a line guy but I do see a good bit of frax flights a day usually when I am working.
The mock business I am writing the proposal for would broker repositioning flights to an open market. Via some sort of web interface a fractional/charter company could list flights that are flying as empty repositioning flights and consumers could then "book" a seat. It would compete against the high cost of last min. airfares. In addition I would imagen that frax and charter companies tend to sometimes populate smaller airports that aren't serviced by the majors or even regionals very often. I still need to look into what FARs and such would apply. I am guessing that the operator would just book it as a another charter flight. Thoughts? Thanks for the input so far.
That is exactly what the Air Charter Guide does. Take a peek at for more info on their setup. I get an email from them every day with a list of empty legs that could be chartered.

As far as providing service to fractional operators go, the people paying for the ride would have to be owners in the program, unless the operation, aircraft and crew are all setup so that they can do 135 flights as well. Since most fractional operators are seeking to avoid 135 regs, and thus are not certified, you would not be able to broker their respositioning legs to non-program people. If they are program people, then they would just call the fractional operator to arrange it.

It would work, and does work, for deadhead charter flights. Along with the Air Charter Guide, I get emails from Delta's AirElite program, which appears to be marketing its own deadhead flights. Due to the lack of a central scheduling base (unlike the fractional operator), there are many more deadhead charter flights than there are deadhead fractional flights.

One way in which you could provide service to fractional operators would be to offer them charter flights if and when they cannot fulfill an owner's request with one of their own aircraft due to lack of availability. I know that they do broker some owner flights out to charter operators in this manner.

...unless the operation, aircraft and crew are all setup so that they can do 135 flights as well. Since most fractional operators are seeking to avoid 135 regs, and thus are not certified.

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NetJets is a certificated 135 operator. We also self regulate our 91 trips to 135 standards. Yes, ALL aircraft and ALL crewmembers are trained/checked FAR 135.

...there are many more deadhead charter flights than there are deadhead fractional flights.

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That is why repositioning flights are NOT billed against a fractional contract. When a charter a/c finishes a duty trip, it MUST return to its home base. NetJets aircraft have no home base. When its trip is finished, it stays there until it is needed again. For the record, I have done 4+ revenue legs back to back with "0" ferry time. It's not that unusual. Of course, I've ferried from PHX-PHL too.
I didn't know if the fractional side of Netjets also complied with 135 or not. I knew that you had a 135 wing, but didn't know that it was all 135able. I believe I am correct in saying that you are the only operator that has all of its fractional aircraft and pilots on a 135 certificate, so there are still many fractional aircraft out there that could not be chartered or brokered.

From the operator's standpoint, fractional is more efficient in terms of the "revenue" legs to "deadhead" legs ratio. With a national program like NJA it would also be harder to charge deadhead directly to a customer. However what I said is still true, that the customers (collectively) do end up paying for all the deadhead, even though it is an indirect cost. But as I said as well, that is the price one has to pay to get guaranteed, nationwide service.

Unless you make use of an aircraft to the point that it would make sense to own your own aircraft 100%, fractional makes a lot of sense for a lot of people, which is, no doubt, why it has been and continues to be very successful. It fills a much needed gap between charter and full ownership without all the hassles of more traditional partnerships.

[ QUOTE ] there are still many fractional aircraft out there that could not be chartered or brokered.

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Keep in mind, that although we are 135 capable, we are not charterable/brokerable.

As far as deadhead expenses go. Although some expense may be offset by management fees, most, I believe, are written off as a cost of doing business, just like maintenance and cleaning. Many times, aircraft are repositioned for one trip and end up doing another. A great deal of the repositions are to and from a maint facility. Most positioning flights to customers are usually less than :30 minutes. When offset by a 3-5:00 hour flight is negligible.

Another fact to consider is the whole mindset of our customers. Charter customers are looking for a good "deal" to fly from A to B. NJA owners are buying for safety and exclusivity. Similar to people buying a Lexus SUV instead of the $20,000 cheaper Toyota version.