Charter pricing explained, from the hourly rate up

A private jet quote usually arrives as one number. Behind it sit five or six separate lines, and knowing them is the quickest way to tell a fair quote from an inflated one, or to see where a trip could cost less. This article builds a charter price from the bottom up, starting with the hourly rate.

1. The hourly rate: aircraft, crew and fuel in the air

Every charter price starts with an hourly rate. It covers the aircraft, its pilots, fuel and the operator's maintenance costs for each hour flown. Rates follow cabin size more than anything else, because bigger jets burn more fuel, need more crew and cost more to own and insure.

Approximate US market rates per flight hour before tax, fees and repositioning.

Within each range, newer aircraft, busy dates and popular departure airports sit at the top, while older aircraft and quieter days sit lower. Two quotes for the same class can differ by a third or more for those reasons alone.

Flight time or block time

Operators bill either flight time, from takeoff to landing, or block time, from the moment the aircraft starts moving to the moment it parks. On a short trip the taxi minutes add up: ten minutes at each end is a third of an hour. A clear quote says which method applies.

Minimum billing per leg

Many operators bill at least one hour for each flight leg, however short. A 35 to 45 minute hop from Teterboro to the Hamptons can be priced as a full hour, which is why short trips cost more per minute in the air than long ones.

2. Positioning: the hours you are not on board

The jet that flies you has a home base. If it is not already where you are leaving from, it has to fly there empty, and on a one-way trip it usually flies home empty afterwards. Those positioning hours are normally billed at the same hourly rate.

This is the biggest variable in charter pricing. A one-way from New York to Palm Beach on a jet based in New York often includes the empty return, roughly doubling the billed hours. The same trip on a jet based in Florida, which needs to get home anyway, can cost far less. Finding aircraft that are already in the right place is a large part of a broker's work.

Empty legs are the flip side. When an aircraft has to reposition anyway, the operator may sell the empty flight at a discount, often 25–75% off. The catch is that the route and time are fixed, and the flight can be cancelled if the original trip changes.

3. Waiting time, daily minimums and crew overnights

When the aircraft stays with you on a multi-day trip, two more costs appear. The first is the daily minimum: operators commonly bill one to two flight hours for each day the aircraft is on your trip without flying that much. The second is the crew's hotel, meals and ground transport for every night away from base.

Crews also work within legal duty and rest limits. A long day that combines an early departure, a wait and a late return can run past them, which means either a second crew or an overnight. A good quote plans for that up front instead of adjusting later.

4. Airport, handling and other fees

Every landing creates charges: landing fees set by the airport, handling and facility fees from the FBO, the private terminal where you board, and parking or hangar fees if the aircraft stays. They vary widely by airport and rise on busy weekends. Other lines appear only when they apply:

• De-icing in winter, billed by the fluid used, which can be a significant amount on a large jet.
• Catering beyond the standard snacks and drinks.
• Wi-Fi on aircraft that bill data separately.
• International fees such as handling agents, permits and navigation charges.

5. Federal taxes

Domestic US charter carries a 7.5% federal excise tax on the amount paid for the flight, plus a segment fee of about $5 per passenger per leg, adjusted each year. International trips are taxed differently, with per-passenger arrival and departure taxes instead of the 7.5% on the international portion. An all-in quote includes these, so the total really is the total.

Putting it together: a worked example

Here is how the lines add up for an illustrative one-way: a midsize jet based in the New York area flies six passengers from Teterboro to Palm Beach at an hourly rate of $5,800, inside the typical $4,500–7,000 range.

Illustrative figures built from typical rates; not a quote.

Almost half of that total is the empty flight home. If a Florida-based midsize jet is already in New York and due home, the positioning line can all but disappear and the total falls to about $16,850. That saving comes from sourcing the right aircraft, not from haggling over the hourly rate.

How to read a quote

• Aircraft type and year. The class sets the rate; age and cabin refurbishment affect comfort.
• The operator. The company holding operational control should be named before you book.
• Billing basis. Flight time or block time, and any minimum per leg.
• What is included. Positioning, crew costs, fees and taxes, plus anything listed as variable.
• Cancellation terms. They differ by operator and by how close to departure you cancel.

Five ways to pay less

1. Choose the smallest aircraft that genuinely fits your passengers and bags.
2. Be flexible on time or airport, so an aircraft already nearby can take the trip.
3. Compare a round trip with two one-ways when you stay several days.
4. Ask about empty legs if your plans can move with someone else's schedule.
5. Book peak dates early, before the best-placed aircraft are committed.

Related

• Round trip vs two one-ways: how the math works
• International charter costs: what changes
• Charter rates by aircraft and trip estimator