““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
10 questions air charter buyers should ask
When you buy a seat on a commercial flight, the choice of airline can matter less than the departure and arrival times. But when you book a charter flight, picking the operator is the most important decision you can make. The wrong choice can cost you lots of time and money, or even create safety risks.
So how can you be sure you're selecting an operator that will provide a safe and trouble-free trip? The answer is to pose the right questions before committing to anything. Here's what to ask:
1. What experience do you have? Finding a company that has been operating with a Part 135 charter certificate for a year or more is essential. "Look for respected providers, the people with the long tenure that have a good, safe reputation," said Thomas Fitzsimmons, COO of charter-management company Gama Aviation. The outfits that have been in business a relatively long time have the infrastructure, financial resources and experience to do the job right, he explained.
2. What's your safety record? An experienced operator will have passed numerous scheduled and unscheduled inspections and spot checks by FAA safety auditors. The National Business Aviation Association recommends that new customers contact their local FAA Flight Standards District Office to verify an operator's good standing, however. Also, the FSDO will be able to provide safety and accident records.
Look, too, for ratings by independent safety auditors. The most respected are Wyvern and Aviation Research Group/U.S. High ratings from either of these companies indicate that you are selecting a safe operator.
Wyvern rates day-to-day and maintenance operations, aircraft fleet and personnel against standards that exceed the government's, said president and CEO Jim Betlyon. And according to the company, statistics prove the effectiveness of its standards: not one of the 811 Part 135 fatalities between 1991 and July 2005 involved a Wyvern-recommended aircraft or crew, and of the 1,163 Part 135 accidents during the same period, only two involved Wyvern-recommended operators.
ARG/US rates business jet charter operators on a five-level scale: Platinum, Gold+, Gold, Silver and DNQ (did not qualify). Only a small percentage of operators qualify for the Platinum rating, which requires at least one year of experience, a safety management system, a workable emergency response plan and well-kept records for all major aspects of operations and maintenance. Additionally, captains and first officers must have a minimum number of hours and experience for an operator to qualify for the Platinum rating.
3. Do you have "operational control"? If you book a flight through a charter broker or a management company, you should know that brokers do not hold Part 135 charter certificates and neither do some management companies. Without Part 135 certificates, they do not have "operational control" over the aircraft, the pilots and the decisions made in flight. However, good brokers and management companies should be able-and willing-to provide you with information about the operators they engage that do hold Part 135 charter certificates.
4. Can you guarantee an airplane? To avoid a potentially disastrous situation-such as finding yourself standing on a tarmac, waiting for an airplane that isn't available--ask when the operator can commit to delivering the aircraft you want. "Few operators can tell you over the phone that the aircraft you want will be available when you need it," said XOJet CEO Paul Touw. "Look for an operator that can make a rapid commitment and keep it." Or look for an operator that advertises only jets that it can confirm will be available.
5. What's in your fleet? "There's a big difference between a 2008 jet and one that's a decade old," Touw said. "The average charter aircraft is 14 years old, so pay attention to an operator's average aircraft age, as well as the size of the aircraft."
There is also a big difference between an operator that owns three or four airplanes and one that owns 100, said Steve Hankin, president and CEO of Sentient Flight Group. "The capabilities in the operating team, in the command center and in their ability to respond to unforeseen events [will all differ]."
A good operator or management company will explain how its various aircraft types differ and help you match the model to the mission. For example, a reputable company would advise a customer to charter a smaller airplane, such as a Bombardier Learjet, for a short domestic trip and a larger airplane, such as a Gulfstream IV, for a transatlantic trip.
6. What training do your pilots have? Find out how much flight experience the pilots have-total and in the particular aircraft type. Auditors such as ARG/US and Wyvern can recommend flight-crew minimums to help you determine appropriate requirements. ARG/US, for example, requires captains to have 3,000 hours of total flight time and 1,500 hours of pilot-in-command (captain) time. Captains should also hold an Airline Transport Pilot (ATP) license, the highest rating a pilot can attain. Additionally, pilots should have a minimum amount of annual training, including simulator training. The training should be conducted through a certified provider, such as FlightSafety International or CAE SimuFlite.
7. What are your operational capabilities? Sentient Flight Group's Hankin said one of the most important characteristics of a good operator is the ability to respond to unforeseen events. If something doesn't go quite as planned-a passenger needs a schedule or itinerary change or the aircraft has a mechanical problem-a good operator should have systems in place to address the issue. A large operator would be able to provide a customer with another aircraft if there were mechanical problems, for example.
Gama Aviation's Fitzsimmons added that if a trip involves international travel, working with a charter operator that has worldwide dispatch coverage is important. "There are overflight permits, landing permits, ground transport requirements, visa requirements and ever-changing legal requirements," he explained. "It's a challenge to fly overseas, but we have dedicated departments in the U.S. and Europe that take care of planning and dispatch. They keep the customer up to date about visa requirements and whatever else the customer may need."
8. How much liability insurance do you carry? Choose an operator that has a minimum of $50 million in coverage, recommended Toby Batchelder, aircraft management sales manager for Elliott Aviation. Insist on seeing a certificate of insurance. In addition, if you use the same charter company regularly, you can ask that it name you as "additionally insured" on its policy.
9. Can you give me an all-inclusive price quote? Many operators add charges that aren't included in the original quote. "Fuel surcharges can add $100 to $400 an hour," said Batchelder. "Ask operators to send you a quote before the trip so you can see all the charges."
Catering, ground handling, permits and parking are examples of extra charges that can also increase the cost of a flight. Matt Sevick, Sentient Flight Group's vice president of corporate development, said his company provides basic catering, but special requests, such as for a particular champagne, will cost extra. Sentient might also charge for a pilot's lodging, if a customer requests an overnight trip.
10. Can you supply references? Harlan Sparrow, manager of the FAA's Commuter, On Demand and Training Center Branch, said that a good charter operator will always supply references. And talking to a satisfied customer, he said, is one of the best ways to gauge the effectiveness of an operator. Hankin agreed: "Word of mouth is quite important."