A Jet You Can Call Your Own

Charter and part-owned planes are looking better

Even before the recent terrorist hijackings, John Jendricks was fed up with the commercial airlines. The vice-president of Milpitas (Calif.)-based Force10 Networks travels upwards of 100,000 miles a year visiting clients of his networking equipment business. To save precious time, last year he started booking business jets with charter brokers such as eBizJets and FlightTime. "I can make five stops across the country in just two days," he says. "On a commercial airline, that would take at least a week with delays and connecting flights."

Increasingly, busy executives are realizing that flying charter is worth the extra expense. Charter usage has grown 12% annually over the past three years, double its historic average, according to charter research firm Boston Aviation Services. Security concerns will accelerate this growth. "Since the terrorist attack, eBizJets has taken an enormous number of calls from executives who now refuse to fly commercially," says Michael Jenkins, an eBizJets spokesperson. If you book the jet, you know the passengers.

BIG DRAW. But efficiency and comfort are still the primary reasons to fly charter. Charter jets go straight to your destination and leave on schedule--yours. The leather swivel seats, the catered meals, the DVD players and Internet hookups, the solitude, all are a big draw for harried travelers. "I make up every penny I pay extra for charter with better play on the golf course," says Douglas Tewell, a professional golfer and FlightTime flier. The time savings vs. scheduled flights will no doubt increase now that new security measures require earlier check-ins.

The Internet has augmented charter's efficiency--and made it easier for customers to find better deals. Web sites run by brokers such as FlightTime, Skyjet, and Air Charter Guide offer online search and reservation tools similar to those available for airlines. Plug in your destination and departure time at Skyjet's search engine, and a list of available flights matching your criteria appears, including a detailed description of available jets: seating capacity, cruising speed, and flight altitude. You buy the ticket simply by clicking "Book."

The broker search engines are a big improvement over the past, when you had to call each charter company separately. But none offers a complete list of the flights available through more than 3,000 operators. To do a thorough price comparison, you still need to visit several sites. In a recent search for round-trip passage for six people between Raleigh, N.C., and Des Moines, Skyjet's site listed a $8,546 fare, FlightTime wanted $13,122, and a commercial airline was charging $8,154. Since charters bill per flight hour instead of per passenger, the savings really become apparent when flying small groups of passengers (table).

Charter companies compete with those that sell fractional ownership in airplanes, such as Executive Jet. With fractional ownership, flyers own one-eighth or one-sixteenth interest in a business jet and get that proportional share of its use.

To fly on a small six-seat jet such as a Cessna Citation V, Executive Jet charges $400,000 for a one-sixteenth share of the plane, $5,224 in monthly management and maintenance fees, and $1,318 per flight hour. Contracts last five years, at the end of which you can sell back your share to the fractional operator, usually for less than you originally paid. In the meantime, as long as you're flying for business purposes, you can deduct trip costs as well as the jet's depreciation in value each year.

By comparison, charter broker eBizJets offers a plan that charges a fixed $1,850 per flight hour for use of a small jet. The company gives you a debit card worth $100,000, then deducts the cost of the flight time from the card. It will refund any unused credits. FlightTime offers a similar package called Freedom Plan. It charges an annual membership fee that varies depending on the size of the plane and number of flight hours per year. For 25 hours on an eight-passenger jet, membership is $35,556 a year plus $1,250 per hour used. You must agree to sign up for at least 25 hours in this plan, but unused hours can be carried over to the next year. FlightTime's membership fee is nonrefundable.

SAFETY RECORDS. Industry experts say if you use less than 200 flight hours a year, charter is usually a better deal than fractional ownership. The latter starts to make sense if you're racking up hundreds of hours of flight time because of the lower hourly cost and the tax benefits.

Safety is an especially important consideration when flying business jets. "The safety records are a little worse than commercial airlines because charter planes are flying into smaller airports, where it's harder to land," says Boston Aviation Services CEO Frederick Gevalt. The best brokers do rigorous safety audits of their pilots and planes. FlightTime's auditor, Wyvern Aviation Consulting, requires its pilots to have at least 4,000 hours of in-the-air command experience, more than double the 1,500-hour standard mandated by the Federal Aviation Administration. EBizJets uses auditor Aviation Research Group/U.S., whose safety director, Peter Russo, developed the Defense Dept.'s aircraft audit program. SkyJet employs both of these firms.

Oddly enough, federal safety regulations are stricter for charter than fractionally owned jets because the FAA doesn't consider fractional jets to be "commercial aircraft." But top fractional operators employ their own internal auditing that can be quite stringent. "We train our pilots 22 days a year, twice the industry average," says Kevin Russell, senior vice-president of Executive Jet. Yet these extra precautions don't protect fractional owners from legal liability if something should go wrong. Because they are part owners, fractional flyers are liable for the safety of passengers even when they're not aboard. Those who hire a charter have no such liability.

Charter brokers are also working on the problem of "empty legs." In the past, whenever passengers were picked up in an out-of-the-way place, they would have to pay for the hours it took the plane to get there if no one else had booked that leg. Flight Time and eBizJets say they've eliminated empty-leg fees by using enough operators to always find an available plane nearby. Some experts argue, however, that brokers embed empty-leg costs in their fees.

Flying charter still costs more than traveling first-class on an airline. But the time saved and the convenience can make all the difference. "I got tired of commercial flights: the delays, the babies screaming, the tons of luggage coming down the aisle," says golfer Tewell. "First-class is not first-class anymore. It's just buying a bigger seat." Indeed, when you fly on a business jet, you're in a class by yourself.

By Lewis Braham

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