In today’s world of flying private, there are more options than ever when chartering an aircraft. Technology has enabled operators from all over the country to compare schedules and connect flights, cutting down on the number of empty aircraft or “dead-heads” positioning from one airport to the next. The industry is evolving and private aircraft are being utilized more efficiently.
The demand for “one-way pricing” and the ability to connect flights with other operators has caused some aircraft operators to move from the traditional charter business model and adopt one based on a transient or “floating” fleet of aircraft, higher volume (sometimes multiple flights per day) and promoting one-way pricing and cost savings to the customer in exchange.
This type of model sounds like a less expensive alternative to traditional jet charter service and is of course attractive to people as flying private is not exactly inexpensive. What exactly are the savings and at what if anything are you giving up in exchange?
True One-Ways vs. “One-Way Pricing”
The term “one-way” is used often and loosely in the jet charter industry. The promise of a one-way flight is very attractive and some companies have chosen to capitalize on this term.
A true one way is an empty leg or a “dead head” that is positioning from one airport to the next to pick up a flight or return to base after dropping someone off. In this case, the operator can charge a standard retail hourly rate for the flight time used plus any positioning legs. A true one-way is where you will find the most cost savings – the closer the match to your routing, the better the savings. Most true one-ways are found on industry forums and websites accessible by operators and brokers as well as directly on some operators’ websites.
One-way pricing or “point to point” pricing is a little different. These are the operators with a floating fleet of aircraft that essentially leverage the connectivity of the charter industry to find the next flight. Some also market heavily to retail customers with the promise of discounted rates. Since there is no guarantee of when and where the next match will be they have to round the hourly rate up, sometimes way up. Many of these companies also require you to purchase a block of time or Jet Card in order to access the-one way pricing. Some flights will subsidize other flights depending on the positioning legs needed. It’s not uncommon to see “one-way” hourly rates that are double current retail hourly rates, though I’m going to assume that the reader is smart enough to see through that sales strategy and focus on real one-way pricing that does produce some savings.
If for one-way trips or drop offs you traditionally had to pay for the aircraft to return (empty) than a “one-way” price would be about half that right? Not exactly… that would require an exact match to split the cost 50/50, someone going from the exact airport you were flying into, say Aspen and return to the same place the aircraft is based, say Carlsbad, on the same day at a time that coordinates with your time. The likelihood of that happening is really dependant on how popular of a route you are flying and the time of year. What is more likely to happen is within a day or two someone is looking for a charter from Vail to Los Angeles. So you’ve got to cover the cost of the crew’s downtime (hotels, meals etc.) as well as the positioning legs from Aspen-Vail and Los Angeles-Carlsbad.
Here are some examples of one-way prices I have found for two different customers just this week:
One customer needed to go from San Diego to the UK with no return trip. The full retail price in a GIV would have been around 150K. His dates were flexible and I was able to find him a true one-way within his date range for just over 100K. That’s over a 30% savings and the best we were going to do. The flight was 100% non-refundable and he had to pre-pay immediately to confirm the aircraft. In this scenario the low risk that he may have to cancel was worth saving 50K.
Some other customers were moving from San Diego to Florida with their 2 sweet dogs and didn’t want to hassle with airlines. Full retail in our Hawker 800XP was $33K. They needed to lock in the departure date a few weeks out and we were unable to find a true one-way that far in advance, so we used a “point to point” operator that cost $28.5K, a 13% savings. This “one-way” is non-refundable and non-changeable whereas paying full retail gives them the flexibility to move or cancel if needed. For some the 13% savings may not be worth the risk.
As you can see the savings vary widely and are rarely over 30%. The more popular the route, Southern California-New York, New York-Florida the better savings on the one-way flight. As I mentioned previously, companies that solely operate on a one-way model can’t guarantee when and where they will find the next match so they have to round up to cover the costs of positioning legs. They also have to have very strict rules and rigid cancellation policies. One Schubach customer had been considering buying a block of hours with a company that only charged for “one-way”, thinking it may be a good way to save some money. After reading through all of the charges and limitations listed on the quote, he had one question – Are they going to start charging me to use the lav? Needless to say, he did not pursue this operator and stayed with Schubach.
Loss of Flexibility
Discounted rates come with limitations. Business profitability becomes dependent on volume, filled capacity and flight predictability. For the larger point to point companies, shortly after your jet drops you off, it’s time to move on to the next trip. Traditional charter operators, on the other hand, can afford to allow you some breathing room because in most cases you are that jet’s only passenger for the day. The entire crew’s attention is on your flight and your needs. One-way operators may be flying your jet up to 4 times on the same day.
In order to remain compliant with FAA regulations when flight volume increases, charter operators need to run on a strict schedule with lots of tight rules. The impact is often felt by the customer. Running late? They reserve the right to take off without you (yes, LEAVE WITHOUT YOU) unless you’ve opted to buy waiting time at up to $600 an hour. With traditional charter operators, there is no waiting time charge – the plane is there for you, and will be on standby for you until you’re ready to leave. One of the greatest benefits of flying privately is that you are able to travel on your own schedule. With a one-way model, that benefit goes away.
Similar loss of flexibility occurs with these operators if you have a last minute change to your itinerary. If you decide you need to cancel at the last minute because something has come up, you’ve prepaid and will likely not get your money back. If you need to add an extra leg or change destinations, many of these charter operators may say no because it will throw off their schedule. At a certain point, you have to ask whether the savings in price is worth the potential pain experienced with a change in itinerary.
Benefits of the Traditional Charter Model
At Schubach Aviation, we do not offer Jet Cards, or focus on one-way flights (though we do offer to find them when it makes the most sense for the customer). For many, our business model falls into the traditional category of charter operators. We intentionally choose this business model because we believe it delivers what’s best for the customer – extraordinarily personalized service. We know the hard-to-find wines that you like and the specific foods you prefer, and we’ll make sure they’re on flight for you. We’ll also catering to special diets and be mindful of allergies. After over 20 years of business, we have seen it all and learned what works best for our customers.
Highly personalized service means we go to great lengths for our customers. Here are a couple of examples:
We have one customer who loves nice blankets, so Schubach bought them 100% cashmere blankets and had them embroidered with their initials. These blankets are kept in the hangar and brought out just for them each time they fly.
Another customer has a company with a bold colored logo. On one flight, the flight attendant was wearing a shirt in that was the same color as the logo . The customer noticed and seemed happy to see it, so Schubach went out to purchase ties for the pilot in that same color.
Quality of Experience
Because these point to point operators are managing a larger fleet of jets, they may not always have the time to give every traveler the personal attention they deserve. You also may not see the same pilots or aircraft more than once. Again, with discounted prices, profitability becomes increasingly reliant on volume and efficiency, not personalized customer service. These new types of charter operators may give you the opportunity to fly at a slightly lower price point at times, but it’s up to you whether that lower cost is also worth the decrease in personalized service. One of the main reasons people choose private jet charter is for its inherent flexibility, but this can be lost lowering the overall value of what you are paying for.
The Bottom Line
While Schubach’s business model is more traditional according to today’s terms, our business continues to thrive because of the high quality of our flight experience and the personalized service we provide for our customers, giving them true value for the money they are spending.
The next time you start shopping jet charter quotes, consider asking yourself the real reason you are flying on a private jet.
One-ways can make sense for certain scenarios depending on your city pairs and the firmness of your departure date and time. That doesn’t mean they work the best in all cases or that a true one-way match will even be available. I personally always try to make the best recommendation for the customer taking the whole picture into consideration. Please feel free to email or give me a call if you would like to discuss the best options for an upcoming flight.