subject: Fuel Prices And Their Effect On Charter Costs [print this page] So how do fuel prices effect your overall Air Charter cost?
Let me first point out that EVERY aircraft operator I know of presently is charging some type of fuel surcharge. That being said, no one is immune to the adverse effect of rising fuel costs. I can also point out that on average, the fuel surcharges I see generally make up about 25% of the overall costs of the Air Charter, and rising.
The sad fact is that little can be done by the average AV Gas or Jet Fuel consumer. Short of plane-pooling, there are few, if any quick cost reduction steps to take.
A common misconception by the public is that the Oil companies drive the price of fuel. Partly thats true, but supply and demand - low supply, high demand - drive the costs higher. The truth is there is no shortage of oil, just a massive shortage of refining capacity to make the fuels that are required to fly our Aircraft Services and drive our cars. Our President (GWB), love him or hate him, pointed to the grim reality in a speech just today that you cant build a refinery in the United States, and you cant expand a refinery in the United States. This serves to reduce capacity and drive prices higher.
On yet another front, the price is being driven higher by the declining dollar. In real terms the price of Crude has only risen marginally in the last 6 months. The lower dollar, which has PLUNGED in the last 6 months, exacerbates the effect by providing a lower value per barrel as compared to the Euro, Yen, Won, and other foreign currencies. In real terms the price of oil has remain fairly constant, but still way above the $50 a barrel of just two years ago.
Interestingly, the prices per gallon of fuel in the same time have not risen by an equal factor.
In the best interest of the aviation industry and our Air Charter clients I wanted to provide some kind of explanation as to why the cost to hire a Lear Jet or 747 has risen by over 30% in the last 2 years. Simply put, the cost of fuel drives the cost of everything higher.
When youre looking for your next flight, I hope youll consider giving AirCharterGuru.com a try. We work tirelessly to provide solutions to every customers individual needs and offer a multitude of options for our clients to select from.
If you desire the privacy of a private jet charter or the elegance of a VIP Jet, like a Boeing Business Jet, or even if youre an organization looking to book your group travel on a 737 Charter, we find solutions to meet and exceed your expectations. Jeff Alan is the Air Charter Guru. Having spent nearly two decades in the Transportation Industry, he leverages his knowledge, experience, and extensive network to create Intelligent Solutions for Time Critical Transport. Feel free to comment or contact us at any time via e-mail at jeff@AirCharterGuru.com or you can reach us at 866-501-GURU (4878).
