How Jet Fuel Prices Affect the Price of a Charter Flight

You might have noticed when obtaining a charter quote for your next trip that the price might seem a little higher than you expected! In this economy, how could charter jets be more expensive you ask? Well, whether or not the individual jet you are looking to charter is more or less than last year, one thing is for certain. The jet fuel is considerably more expensive. It is all over the news how the substantial increase in jet fuel prices is impacting the profitability of the airlines, but how is it affecting the charter market and you the charter flyer?

According to Platts, the world’s foremost source for of price assessment in the physical energy markets, jet fuel prices at February 11 were up 5% from the previous month, and a whopping 42.8% from the previous year. Whether you blame prices on demand, unrest in the Middle East, speculators or any of the dozens of factors that contribute to the price of crude oil, prices for jet fuel follow in lock-step with crude oil and are not coming down anytime soon. Expect to either see a significant fuel surcharge, or higher hourly rates to compensate for this.

What is a fuel surcharge? It may have been a year or two since you have seen this itemization on your quote for a charter flight. A fuel surcharge is when an operator sets a base rate for the aircraft based on a certain fuel price. When prices for fuel are higher than that base rate, the cost is passed on to the user of the jet. There are two situations where you will see this; when flying into locations where retail jet fuel is more expensive than what has been set as a base rate or when prices in general are rapidly increasing.

Using the location example, I looked up the best prices for Jet Fuel in Salinas, KS and Key West, FL. The price per gallon was $4.45 in Salinas and $6.03 in Key West. So if your jet has a base fuel rate of $4.50 per gallon, you are going to see a fuel surcharge of $1.53 per gallon for a flight where refueling is necessary in Key West (assuming the operator does not have a contract to buy fuel at a lower cost).

Aside from location, a fuel charge can almost always be expected when fuel prices are increasing so rapidly. The operator most likely will not adjust the base rate to match current prices. Even if they wanted to, the prices are constantly changing. Most operators and brokers are very fair when it comes to these necessary surcharges and do not look to scoop profits from these high charges. As always, ensure you are working with a reputable broker or operator. If anything doesn’t look right, ask what numbers were used to arrive at your fuel surcharge. Make sure your quote is inclusive of all fees and taxes, including any fuel surcharges. It’s always best to ask for an all-inclusive charter quote anyway so there are no surprises upon receipt of your final invoice.

Everyone from airline passengers to aircraft owners are feeling the pinch as fuel prices continue to rise. As individuals, we can’t do much to change these costs, but to be aware of why they exist and the factors that contribute to them will make you a more savvy charter flyer!

If you have specific questions about planning a charter flight, just a general private aviation question, or would like to share your experiences on this topic, please feel free to contact me directly.