10 April 2012
In our prevous article we covered the factors to consider when choosing a fractional provider, and looked at the cost components of a typical contract.
This week we examine real-world examples, comparing the costs on a typical NetJets flight with a charter flight on the same aircraft type.
As a rule of thumb fractional is competitive for one-way flights, and normally more expensive for a round trip. The reasons are straightforward - fractional charges for occupied hours, and an operator such as NetJets factors in a cost for the empty sectors that they fly. So whether you fly one-way or return, you're paying an implicit charge for the jet flying empty. A round trip is simply twice the cost of a one-way, whether it is the next day or a week later.
Conversely with charter you pay for all hours flown, so if the jet can stay with you, i.e. for a weekend, then there are no empty sectors to pay for.
Most fractional programmes also have considerable additional charges, with fuel surcharge being probably the most significant extra cost. Operators have been reluctant to increase their advertised price as fuel has risen, so the 'fuel variable' - the difference between the fuel rate included in the contract and the prevailing rate has grown inexorably over the last few years. Also high-density airport charges, i.e. extra landing fees at premium airports, are now a growing expense.
Below are some real-world costs for a flight from Luton to Samedan (St. Moritz) for a weekend skiing, flying out on the Friday, back on the Sunday. NetJets pricing is based on their 25 hour jetcard 2012 pricing for a midsize jetcard.
Charter Flight: Citation Excel
Flight cost - One-way €13,700. Round-trip €16,170
Average hourly cost: One-way €8,060. Round Trip €4,760
NetJets: Flight costs: One-way - 1.7 hours @ €7,360 = €12,512. Additional charges: Fuel €1,470. Landing fees €1,325, Carbon offset €75. Total = €2,870. Total flight cost one-way €15,382
Flight costs: Round-trip - 3.4 hours @ €7,360 = €25,024. Additional charges:Fuel €3,120. Landing fees €2,650, Carbon offset €150. Total = €5,920. Total flight cost round-trip €30,944.
Average hourly cost for round-trip = €9,100 per hour.
As you can see, on a one-way flight the hourly cost is comparable (12% difference), but on the round-trip the NetJets flight is almost double (91%).
This example shows that choosing the right option for your own flying needs very much depends on your flying pattern, as well as the type of service you require.
Fractional offers guaranteed availabilty, occupied hourly pricing and other benefits that may or may not be relevant to your situation. Charter offers flexibility, low commitment and generally, lower pricing.
Making sure you choose the right one for you is not always easy, but is essential if keeping costs under control is important to you!
FJE offers impartial, independent advice, so please contact us if you have any questions regarding this article, of if you would like to discuss your own requirements.
FRACTIONAL JET EUROPE
19 Kingly Street, London, W1B 5PY
Tel: +44 20 7534 7138: Mobile: +44 796 651 5255 | E-mail: firstname.lastname@example.org