If you were going to start a charter company from scratch, what would be the top 2-3 airplanes you would want to use? I currently manage a King Air C90 that I could lease at a very reasonable price. Is this usually a profitable charter plane? What are a few others you guys would recommend?

 

The most profitable aircraft is the one you're not financially responsible for. But it really depends on which market your serving. Citations still seem to be popular.

 

I can't remember the website, but there is one out there that lists the average operating cost per hour. To own an airplane and try to make money with it is insane. I recently lost my job to a situation like that. Usually the only reason an airplane is on a charter certificate is to offset cost, not make money. Unless you're flying boxes, and the airplane is extremely busy, Ala Ameriflight/Airnet, don't plan on making money, plan on spending money.

 

I keep seeing this statement... is that just because of fuel prices and economy? You would think somewhere you could make money with a plane. I mean, how do any of the charter companies do it? Like flexjet and netjets etc.

 

Flexjet and Netjets are fractionals...

so in order to use them, you have to BUY a fraction, THEN pay a monthly management fee, THEN pay a per-hour usage fee... That is how they make money!

There is no such thing as a "profitable" charter... you have to charge so much in order to make a profit that someone would just go to a 135 company that is just offsetting costs for some owner-- just like slyguy said.

But that 135 company is charging a hefty monthly mgmt fee, plus taking 15-20% of revenue made from charter, so the mgmt companies are making out like bandits while the pilots do all the work!

 

what2fly.com

 

You can make slim margins on an airplane on a 135 certificate on every flight. But when maint. comes up, or you need to send pilots to recurrent for their 6 month 8410's and insurance, or the airplane needs upgrades, or a radio craps out, or the nose wheel steering buys the farm, or you have a tire blow out, or the left main gear door develops a crack, or the cowl splits and the nose bowl needs to be replaced and re-painted, there goes not only your profits, but more than likely some money out of pocket too. My former employer was going to try and buy a Metro. He was going to get it for a song and dance, with a ton of spares. Even with financing half only of the cost on an airplane that was from the seventies, the monthly nut to crack would have left about $100/200 an hour in profit. On an airplane that might charter 35-40 hours on a REALLY good month, you do the math. Is the risk really worth the return? This was also paying the pilots hourly, not a salary. That is a good way to cycle through pilots like some cycle through underwear. If you want to keep a guy around, pay him a salary so when he's not flying, he still has piece of mind that his mortgage is still going to be paid.

 

Off the top of my head the DOC's on a C-90 is around $550/hr. Looking at a wet lease what do you think you can bill it out at?

 

$500/hr...............

 

Somebody who actually knows what they're doing will include all direct operating costs (fuel, maintenance parts/labor, & engine reserve) along with all fixed costs (crew salaries & benefits, hangar, insurance, etc) along with a margin percentage into their hourly charter rates.

Many newer charter aircraft are on engine programs like TAP/ESP/JSSI/MSP/etc. and some even on nclusive hourly maintenance programs like Cessna's ProTech or FalconCare where all scheduled & unscheduled maintenance is included in a single hourly rate. With programs like these, the unscheduled maintenance event isn't a "budget buster".

There's a reason why many owned charter aircraft are older, however; low acquisition price and the high operating costs can be passed right along to the customer.