Private aviation consultant, James Butler, advised the readers of Business Jet Traveler about the risks facing the growing number of longtime charter customers who’ve decided to become aircraft owners.
Charter management companies have hit upon a creative way to expand their service capabilities without purchasing additional aircraft - have their customers do it. Citing heavy demand for charter, operators are encouraging clients to purchase aircraft and then put those aircraft on the operator’s charter certificate. As a means of recouping operating costs, operators hold out the promise of, but don’t contractually guarantee, a continuous flow of charter revenue.
Deals like these may seem appealing now (while the charter market is hot), however, there are many reasons to think twice.
“I see more people getting out of owning their planes than the other way around,” Butler cautions. “They’ve run the numbers on what it’s costing to own and operate the airplane, and they feel it’s less of a headache to let somebody else take that over.”
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