Plane Conversations

Yesterday we examined internal costs aircraft operators incur and how those are covered in customer quotes.  Those costs are a little bit subjective and may vary from one operator to another within a region and will certainly vary between regions, simply because the costs of living in those regions vary.  Today we will take a look at costs incurred by aircraft operators over which they have little or no control.

Landing and/or Handling Fees- Landing fees are generally assessed by the airport or port authority operating the airport the aircraft operator uses.  These landing fees are based on aircraft weight and may be waived in the event of a Life Flight, but otherwise, landing fees are collected for every aircraft that lands at or takes off from an airport.  The fees vary widely and are sometimes not billed until months after the flight.  Handling fees are generally assessed by the ground handler, which may also be called a Fixed Base Operator or an FBO.    These fees also vary widely.  For light jets, we typically pay around $275 per landing; however, at Boston’s Logan Airport, Miami International and Chicago O’Hare, we have paid as much as $900 per visit.  These fees may be waived with a substantial fuel purchase.

International Fees – Some other countries charge for use of their airspace, whether we land in that country or not.  Other countries charge for flight planning, landings, customs processing, and agricultural fees, among others.  These fees are set by the country involved and are not waived.  These are sometimes also not billed to the aircraft operator until months after the flight.

Fuel Surcharges – Just as automobile gasoline prices fluctuate, so do aircraft fuel prices.  If fuel prices jump for some reason like a storm, oil spill, vacation season, an operator may elect to charge a fuel surcharge to make up for the increased costs rather than recalculate their entire rate structure.  This allows for the charge to be eliminated when fuel costs decrease again.  If the rates increase, but do not decrease after a period of time, the fuel charge may be absorbed into the hourly aircraft rate.

Insurance Surcharges- I have seen these surcharges only once and only for a brief period of time.  After the attacks of September 11, 2001, aircraft insurance rates rose – although, as CS&A’s Tom Chappell informed me in January, not as a result of the attacks.  The general aviation industry was grounded, re-regulated and losing money.  In response to these dramatically and unexpectedly increased costs, many operators introduced different kinds of surcharges.  This insurance surcharge was one of those, but I haven’t seen it used in a long time.

Even operators who issue hard quotes for your trip will exclude some items that are difficult to predict.  Among them are de-icing or inclement weather hangar fees, special catering requests, and flight phone usage fees. 

De-Ice or Inclement Weather Hangar Fees- If your trip takes you to Milwaukee in December, it’s a pretty safe bet that it will snow while you are there.  If it does snow, your aircraft will have to be de-iced to removed the precipitation or it will have to be put in a hangar to keep the snow off of it or to melt the snow.  Regardless of which method of snow removal is used, you’ll have to pay for it.  As of today, de-ice fluid costs about $15 to $18 per gallon to apply.  Some airports have special de-ice pads with a run-off system that collects the used fluid; however, others charge another $0.82 or so per gallon in EPA fees to clean it up.  That gives us a total of nearly $16 to $19 per gallon and since you can easily use a couple hundred gallons in a single procedure, the total bill can climb quickly into the thousands of dollars.  Compare that to hangar rental at between $100 and $500 per event and it’s no stretch to guess which method we prefer using whenever possible.

Special Catering- Most business charter customers use our service because of the expediency we offer.  In line with getting the most done in the least amount of time, many of them would rather eat their meals in-flight than waste that time on the ground having lunch.  Ordering catering for your aircraft is not normally a difficult thing and it’s something that we are all happy to do.  However, catering for aircraft is not inexpensive.  I once had a caterer in South Carolina charge me over $250 for two dozen doughnuts.  I was just certain that the charge was a mistake, but, no.  When I called to get the error corrected, the caterer informed me that this was simply what two dozen doughnuts cost.  I think that he may have actually said that with a straight face, too.  If you are budget conscious on catering, be sure to mention that to your charter operator or broker.  There are solutions which allow us to lower those costs for you.  Your presentation might not be as fancy, but if I have to choose between having a coronary when I get my bill or having an edible orchid on my plate, I’ll choose the healthy heart every time.

Flight Phone Usage – Some charter aircraft are equipped with flight phones.  Passengers do use them from time to time and, since we pay by the hour for their use, that’s how we charge it out.  As of today, the phones on our aircraft are about $2 a minute to use.

Several times over the last few months, you’ve heard us say that charter aircraft operators are not in the business to make a boatload of cash.  If they are, then they are going to be sorely disappointed; the margins in this industry are just not that big.  Now that you know what the line items on your quote or on your invoice are, you are better educated and more equipped to compare quotes between companies and to understand what all of those items mean.  If you see items listed that you cannot identify, just ask your operator or broker to explain it to you.  We love our industry and our product; so, we are more than happy to answer any questions you might have.

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