Opinion: Seat selling vs private charter – competition or opportunity?
– What is seat selling, how does it work?
Private aviation is a privilege that may not be affordable to everyone. Chartering the whole aircraft for yourself or owning a private jet requires particularly wealthy status. So while majority of charter customers prefer to fly alone or in confidence of their family, some adventurous aviators have created a charter model, that allows clients keen on luxury, upscale their travel to a private jet for a fracture of price – single seat sale.
While for most of us, the best chance to experience private aviation on a regular basis, represents a non realistic idea, some jet companies in the USA and Europe offered such opportunity either on individual flights, or via membership. It is quite close to the real luxury charter trip at much less cost, however, for an aircraft owner and broker in the GCC like ASM “buy a seat models for private travel”, misses a couple key benefits.
The ultimate comfort of luxurious private jet interiors, dedicated, individualised service and highest level privacy is essential for charter flyers. For one, a client has an expectation of a private jet made at his disposal, flying to the destination a client has requested for. But in reality, by purchasing a single seat on a private jet, he will have to travel on a set schedule like commercial airline flight, sharing a flight with people he doesn’t know.
The seat sold in charter does allow a more luxurious setting, fast track immigration procedure and arrival to, or exit from airport through a smaller, more convenient FBO terminal in just minutes after arrival. On flights, less than 1,5 hours, charter seat traveller can cut the total travel time in half. In some cases, the single-seat – charter concept allows more flexibility to divert flights to a less busy airport, meaning landing closer to the desired arrival point and avoiding the customs delays at major airports.
In Europe, all-you-can-fly monthly charter memberships can cost about charge of business class on a commercial airline. Either way, it’s a lot less than a client had to charter the entire plane. Even so, it is unlikely that the private jet owners or regular charter flight users in the GCC and UAE in particular would appreciate the idea of sharing, while they can afford a private flight for themselves.
– Is the business model sustainable? Are there legal and financial implications?
Yet the attraction of paying as little as few hundred dollars for a seat on a private jet or even a couple thousand dollars a month to fly as much as you want, holds out the prospect opportunity. Only if the GCC conditions for single charter seat sale demand were to arise.
Serving routes that connect cities without any scheduled airline flights looks like a good idea. Yet, in the UAE or other Gulf countries with smaller territories, such service can be carried simply by ordering a car service or a helicopter, if necessary.
Altogether, these more democratic opportunities to indulge in private flying do not necessarily have to be successful. Many USA and European private jet companies have tried single charter seat model without success, even though USA and Europe are the biggest private aviation markets in the world. The major outbound charter broker market for ASM is the UAE, with its regulative and geographical limitations to apply.
– Are seat brokers competing unfairly with ad hoc air charter brokers? Is it a matter of competition and opportunity, or is there a threat to security?
ASM does not sell by-the-seat. The portfolio of customers that we operate have a strong preference to complete privacy and service dedication to their travel needs. Private aviation in the GCC, region outbound which we primarily offer such service, is a sensitive to wealthy individual requirements. We offer entire aircraft to our charter customers.
We also assume the responsibility of the charter operators, working with the FAA Part 135 regulation at use. Selling charter flights by seat would make the operator performing scheduled on particular date and time flight, which is a violation to Operator’s Certificate and puts an operator in direct competition with commercial airlines.
In other words, selling charter flight by seat in a particular region’s economic and regulative setting would not be ethical nor presents competitive advantage to ASM Charter broker division.
– If you sell seats, what questions do you ask the passengers and how do you assure their security?
It is very complex situation to sell flight as a single seat concept, which requires secure process of seats booking, regulative infrastructure, policies and fleet in place. Therefore, we don’t think that such service will be on demand in the GCC in the near future.
– How aware are clients of the different profile and risks between private charter and seat selling?
Private charter is normally a business flight or group of people who know each other travelling together. Taking out the concept of exclusive privacy and placing strangers to fly together on a smaller jet, may raze security concerns of travellers and have a deluding effect on the private charter exclusivity confidence.
Shared flight plan, impersonalised details of the trip, not attributed to one key customer can easily upset a VIP customer, resulting it the loss of business.
– What are the important issues for air charter brokers, how are you impacted by this activity and what are the risks, and opportunities, for your business?
We see vast opportunities in private aviation of GCC Charter brokering, it feels like the surface of the business travel was barely scratched. Introducing individual seat sales on a private charter market in GCC could potentially assess the corporate travel, making a fair competition to the business class on short-haul flights to neighbouring countries. However, it is unlikely that single seat sale will be applicable for GCC region.
Priyantha Brito, Executive Director-Fuel & Special Projects at Aviation Services Management. Commentary given to the Charter Broker Magazine, March 2019.