Originally Posted by
Hoof Hearted
My guess would be that a company such as XO Jet doesn't use the original way of flying charters to generate income. It appears they are using the aircraft as their assets and hope to get some revenue for them. A high utilization plan can offset some of the costs of their assets. I sucked at economics, however someone with transportation asset management experience can chime in. They do the same thing with ships. Someone buys them, then leases it to a company which uses it then gives it back at the end of the lease. They can keep using it or turn around and sell it when the market is right for the given asset. The guys that own the asset see a nice profit.
As you know these beautiful corporate jets are nothing more then a big write off for the owner. Unlike the airlines we can't sell these aircraft for profit. My D.O. and I sat down and worked out some numbers for our CL-601 to actually make money on ownership thru chartering, the number was around 8000 per hour. Nobody in their right mind would charter an Cl-601 for that when you can charter it for around 4000 per hour. As an owner of a corporate jet it is impossible to make money with these assets, the best you can hope for is to slow down the bledding of the DOC on the aircraft.