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June 2018
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Boeing's 737 Max is the latest variant to enter service

The sizeable world of large aircraft charter

The last three years have witnessed increasing numbers of retro-fitted airliners entering the market, often sourced from well-established scheduled airlines looking to reduce inventory and release cash in a difficult trading environment, according to Air Partner CEO Mark Briffa. The trading pressures that have forced scheduled carriers to rationalise their fleets have caused them to consider new sources of revenue for the remaining aircraft.

Due to the economies involved, this new breed of VIP airliner can reach the market at an hourly rate comparable to private jets with less than half the number of seats. So these cost-effective and low maintenance airliners are available to the charter operator at a significant discount, and in some cases the original owner even provides the VIP refit as part of the deal.

Charter Broker has taken the opportunity to talk to a number of brokers of group charter to see how and why the sector is growing and what the make-or-break qualities are that enable successful achievement of these multi-faceted operations.

"The group charter market is an exciting business because of the variety it offers," says Chapman Freeborn group passenger operations director Catriona Taylor. "Our strengths are in sectors like incentive travel, automotive and sport and these have all been growth markets for us in the last 12 months."

Football related demand at the company has been exceptionally high this year for both team travel and player movements, and is set to continue into the summer months thanks to the World Cup in Russia. Her team flies players and supporter groups to competitions all around the world: the Champions League, Premier League, Europa League, Bundesliga and the Chinese Super League to name just a few. It also manages flights for all sorts of other sports from private jets for professional golfers to team travel for rugby, handball and volleyball.

Taylor says the energy market hasn't been doing as well in recent years but there are still opportunities for charter brokers who add value. If crew rotation work was previously based around long-term contracts between a relatively small number of suppliers, there's been something of a shift in the last few years with clients wanting greater budget flexibility and choice.

As a global company Chapman Freeborn is well placed to serve these kind of sectors as it has a presence in North America, Europe, Africa, Asia and Australia. Clients look for the security of knowing they are dealing with companies who are well established and can manage projects anywhere in the world.

Speciality aircraft

Large aircraft are a speciality of US-headquartered Le Bas International; British Aerospace regional jets, BBJs and Airbus business jets in business, first class or luxury configuration. But although the company has spent vast amounts of money with the operators of such aircraft, who in turn work hard putting the charters together, when it comes to the flight some companies don't necessarily have the correct expertise on hand to manage the smooth running of the operation. This is a particular problem with large aircraft charter and as a consequence Le Bas has to work harder to ensure that what was agreed with the client is delivered.

"If you are operating charter in this domain then you need to have the proper expertise to put it together," says COO Tracey Deakin. "If you are offering a head of state-quality account, or a VIP account, then you need someone onboard who has a background of experience with the likes of Cathay Pacific or British Airways, somebody who knows what to do when the client turns up."

It is so important that the operator, or carrier, has the wherewithal to understand all that is required. He says it can be problematic with a new carrier that is just starting up in this type of work, unless they have expertise or are bringing it in. There is so much background work going on which, if not achieved, means the broker can find itself doing a lot of work for the carrier that it should already know and have done itself. "You really have to know what you are doing in this business because if you don't, and you mess it up, the ramifications are astronomical," he says.

A big weakness for large charter

According to Taylor the broker market has changed in the last decade. It's harder now for smaller start-ups because clients want to work with companies who have absolutely every base covered, from 24-hour operations teams to in-house legal and compliance departments that understand the complexities of the contracting process.

Availability is often her biggest constraint, especially in the busy summer months. But being global helps in this regard as the company has relationships with airlines all over the world. "Volume buying power and control of aircraft gives us more exposure to availability," she says, "but carriers are often holding out for the long-term leasing opportunities and not so much ad hoc flights."

Le Bas speciality aircraft are configured differently to normal commercial airliners. When flying sports teams or entertainers it uses regular aircraft that are split into first, business and economy, with the charter party distributed so that the lead people are up front and the assistants and support team sit further back. The speciality aircraft are hired for key players; corporations, entertainers and incentive-type people. With this sort of charter everything is already taken care of at the terminal, as it would be with first class. There is a dedicated check-in desk and a support team – sometimes Le Bas personnel themselves. Everything is pre-prepared for the client from where to put their baggage, if indeed it has not been picked up beforehand and pre-loaded, to pre-screening of passengers who can then go straight through to the aircraft from the bus.

Sometimes check-ins can be performed outside the airport, for example at a main facility in a sports stadium, after which the bus would be locked with Transportation Security Administration personnel or a security representative on board and would remain in a 'sterile' situation until it reaches the aircraft.

More regulations, more detail

Hunt & Palmer vice president commercial aviation Paul McCluskey says the difference between arranging an executive jet flight and an airliner flight is relatively straightforward: "An exec jet flight is, by comparison, exceptionally easy to arrange and set in motion. An airliner flight is extraordinarily more difficult, complex and challenging. Exec jet flights arranged by brokers are essentially a 'book it, cater it, follow it and forget it' proposition whereas airliner flights are inherently more regulated, more detailed, bigger in every way and require minute attention to detail from the moment of inception to the post-flight follow-up." He believes this is something executive jet specialist brokers usually underestimate and can often lead to disastrous results in terms of product delivery.

Le Bas can spend up to six months organising this type of charter. There is so much to do, especially on the security side if the contract requires a separate check-in area, even a complete shut down of a terminal to protect the identity of the VIP passenger. You run a fine line between allowing the client to get full value for money and clogging up normal day-to-day operations at the airport.

Le Bas often uses secondary airports in order to avoid the press and an over-eager public, but this requires a lot of advance work says Deakin. "You need to make sure the airport has the correct amount of fire coverage, or that it is brought in. You also have to move in ground equipment, make sure the tugs are there, and that there is access to the right fuel. It's a heavy lift but we'll do it because even though the onward ground transportation time may be longer, it is better for the client and it brings value."

Who goes large?

Customer margins are narrow and so large aircraft charter tends to be motor companies and big corporations who are rewarding their high-flying employees with a trip to an island or a safari. "They treat these staff members to everything you can think of," says Deakin. "This is a reward so it's a big ticket item for them, and can cost anything up to one million dollars."

Other clients may be movie personalities or bands. "When you go on tour the hire of the stadium alone can cost anything from $1 million to $2 million per night, and that's before you do everything else. It can cost $700,000 to put a band in there. So on top of all that the flight cost becomes slightly irrelevant. It is all expensive." If the band needs to add a tour date but is unable to make changes to scheduled flight services Le Bas is approached for large aircraft charter. With some of the more successful bands the equipment alone may go on a 747 and the musicians and crew in a separate aircraft. Or it will book articulated lorries for the equipment. "So it's a huge endeavour," he says, "and certainly not for the faint hearted."

Founder and CEO of Privado Osman Erazo arranged to fly 120 staff to the grand opening of a company's golf course on behalf of the owner. "There are a variety of clients who can benefit from large group charters," he says. "Our BBJ clients, on the other hand, are typically the heads of top level companies when they want to fly a larger-than-usual executive team, or when they're thinking of buying a BBJ and want to fly before they buy."

One case that stands out for him is of a client who was interested in purchasing a BBJ, and wanted to test one out by chartering one from North America to Europe. He wanted to use a 25-seat 737 but the available BBJs in the States only had 20 seats. Erazo ended up sourcing one that matched his requirements from the other side of the world which was, of course, more expensive but the client's expectations had to be met. In his experience, operators of large aircraft charters are very well versed in ensuring that client needs are met, or exceeded, and they work with him to arrange additional VVIP services. Overall he has had positive experiences; there are challenges, he says, just like for any other flight but if you have the right experience and process in place then fulfilment is straightforward.

Large scale rescue operations

Le Bas was responsible for the 2005 rescue operation following hurricanes Rita, in the Gulf of Mexico, and Katrina, which devastated the Gulf coast from central Florida to Texas. "It was the biggest airlift since World War II," says Deakin, who shut himself away in an office with two other staff to manage operations. His wife didn't see him for four days.

The scope of work at Chapman Freeborn is huge, from large MICE (meetings, incentives, conferences and exhibitions) groups of 500+ passengers travelling long haul to weekly flights for Premier League football teams, but some of the most memorable operations have been for evacuation airlifts. During the Arab Spring of 2010-11 Taylor recalls the evacuation of over 30,000 passengers from trouble spots on behalf of multinational corporations, insurance companies and aid agencies. "We worked around the clock on operations to fly foreign nationals out of airports like Cairo and back to airports including London Gatwick, Dubai and Barcelona," Taylor says. "We chartered B757, B737 and ATR 72 aircraft as well as executive jets called in from the Middle East."

Last year, Florida-based Air Charter Advisors (ACA) used large aircraft from vendors such as Miami Air to help evacuate larger corporate groups and insured parties during the hurricanes. Miami Air provided Boeing 737-400s and 737-800s which enabled the transportation of 150 plus passengers at a time. "Arranging last minute Part 121 group charters during this overwhelming time posed many problematic scenarios," says president Adam Steiger. "Some of the hurdles both companies faced were downed ticketing equipment at San Juan airport, downed electrical lines and generators and complications in creating and providing manifests since passenger credentials were not all present until boarding."

ACA does not focus generally on larger group airline charters because Steiger finds that most of his customers are shopping for savings over booking a group on a commercial airline. He gets calls and requests from local high school and college sports teams, and unfortunately the expectations they have are not realistic. "They assume the price per seat is similar to booking a commercial airline ticket, whereas it will probably be many times more expensive per person," he says.

Making sure expectations are met by the carrier and operator

"You must select the right horse for the right course," says McCluskey. Carriers for whom ad-hoc charter is not core busi-ness will usually require more management than those for whom it is their primary business. So levels of input required from his Hunt & Palmer team vary from group to group, country to country, region to region and carrier to carrier. He notes there can be huge disparities in quality and service delivery between two outwardly very similar looking operators: even though every legal-for-charter airline is certified to a far higher standard than executive jet operators in the same jurisdiction, certification is not an indicator of service delivery. "That is why the experience and market knowledge of an expert commercial airline broker is vital," he says.

Every time Le Bas does a group charter it has one of its specialists on board, normally the person who started the conversation with the client. They will know what the clients want and can ensure their service expectations are being met, and will still be in place at the other end to make sure the exit transit goes smoothly. It all comes down to expertise: "You have to know what you are doing," says Deakin. "It's like being a butler in the air, and if it were to go wrong the artist may not get onto the stage. The sad thing is that there are people who dabble in this and do a bad job. If you don't do it correctly you damage the industry as a whole."

 

Contact details
Air Partner
Chapman Freeborn Airchartering
Le Bas International Air Charter Worldwide
Hunt & Palmer
Privado
Air Charter Advisors