Buying aircraft with charter on your mind

Say you’re shopping for a jet and, like most buyers in the preowned market, you plan to make your aircraft available for charter. As you’ve undoubtedly heard, this isn’t likely to come close to covering all your costs, but it can offset some of them. So it makes sense to keep in mind the factors that can make an aircraft appealing to charter customers and to the brokers and operators who would market it. 

Age is among the most important factors. “Aircraft that are not more than five years old will be most attractive [to marketers and passengers],” says Pascal Bachman,a senior vice president of sales at Jetcraft, which like all major brokerages often advises clients on charterability issues.

Another reason to opt for newer models is that older ones will cost you more to maintain. Hawkers remain popular with passengers, for example, but age-related maintenance expenses make them less than ideal for charter. “The operating costs are so high that the margin is challenging,” says Dave Coleman, an aircraft sales representative at Duncan Aviation.

Additionally, aircraft models that are familiar to potential customers, such as those that have seen heavy use in fractional fleets, “generally perform best on the charter market,” says Coleman. “Airplanes like the [Citation] Sovereign, popularized by NetJets, or the Challenger series…Flexjet had a large number of those.”

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Wi-Fi is a must. “If you want charterability, you’ve got to be willing to invest in connectivity,” says Jay Mesinger, CEO and founder of Mesinger Jet Sales. Large-cabin, long-range jets need “a combination of domestic [air-to-ground] and international [satellite] solutions. It doesn’t have to be Ka band [satellite connectivity]. It could be Swift Broadband.”

Consider, too, the market for the aircraft category. If you’re shopping for a light jet, for example, you might want to shelve charter plans. “The light jets tend to attract very price-sensitive charter customers,” says Coleman. “The margins are insufficient for it to make sense.”

Once you’ve identified suitable acquisition targets, “a good management company can provide you with a range of operating budgets prepared for existing owners with real-world operational scenarios and charter revenues,” says Michael Tamkus, senior vice president of client services and management sales at Executive Jet Management. “That can give you a realistic view of your charter prospects.” Alternatively, your aircraft broker can contact appropriate management companies to inquire about charter options on your behalf.

You may ultimately discover that the delta between true ownership costs and charter income provides less offsetting revenue than anticipated, as posted rates are often discounted. “On paper it may look good, but once you find charter is sold for Y, not X, that margin may disappear,” Coleman says.

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