April 24, 2024
Different contract terms and formats make it harder for consumers to compare private jet charter quotes, say industry executives.
Don’t hold your breath waiting for standard private jet charter contracts.
That was the consensus of operators and brokers speaking on a panel at the European Business Aviation Conference & Exhibition titled, “Yay or Nay? Standardizing Aircraft Charter Agreements.”
While the brokers and operators mostly endorsed the concept, as they talked through the realities of the market, it became clear that the best possibility would be hard to achieve.
Konstantijn Huys of Flying Group, which operates over 20 private jets from light to ultra-long-range, said the fragmentation in business models makes coming up with a standard contract like the yachting charter market difficult.
He noted there are both owned and managed fleets, and fleets where aircraft always return to their base, and then the growth of the floating fleet model, where they fly from customer to customer.
James Leach, Chief Marketing Officer of Air Charter Service, who was in the audience, said the concept of standard contract terms also flows against what customers want.
He doubted competitors would agree to standardized contracts.
He said it’s hard to get his two children to agree on which television program to watch, and the exercise of developing a standardized contract was like asking an entire class to all agree to watch the same TV show.
Panelists noted that some customers value flexibility in terms of cancelation policies. Then others are looking for inclusive pricing with catering, while others want the lowest price and don’t care about any frills.
Panelist Mike Ryan of charter broker Shy Aviation suggested while penalties could vary, it would be helpful to the market if cancelation terms could be aligned.
He said cancelation windows range from 45 days to three hours in Europe.
Julie Black of charter broker Hunt and Palmer pointed out that in the U.S., one-way trips often carry a 100% penalty to cancel after the contract is signed.
The group also discussed when an operator cancels.
While clients get refunded, their broker then has to source a recovery aircraft, and the client has to pay the new price, or the broker will sometimes cover part of additional costs from their margin.
Huys said that while charter clients are often upset, owners who are paying the expense to repair their private jets will not offset extra costs for the canceled charter customer.
Karl Milles of management company Tag Aviation addressed problems, saying, “Everyone wants to standardize cancelations terms, but they can’t agree on what they should be.”
The panelists did agree that a standardized format would make it easier to compare, and perhaps that’s a more achievable goal.
