The term “air taxi” refers to the aircraft service that provides transportation to people on request. This is that you can take a private plane flight when you want to go instead of booking a previously scheduled flight. Air charter is a form of air taxi, but a new class of aircraft and new business models redefines “air taxi” to mean something less expensive than a conventional charter. The idea behind the air taxi system is that the aircraft operator will be able to reduce the number of empty flights that the plane must take.
Suppose you book a flight on Cessna Citation S / II (CE-S550). This Jet may rent an hourly rate anywhere from $ 1,500 to $ 3,100, depending on the age of the aircraft, amenities, and operator qualifications. For our purposes, we’ll assume the usual price is $ 2,000 an hour. This price includes the costs associated with operating the aircraft such as the test salary and fuel costs, but it does not include some additional fees that may significantly add to your expenses such as:
Taxes – generally 7.5% of the total price.
Reset Fee – Suppose you want to fly from Santa Monica, California but the plane is located in San Diego. The aircraft operator will need to send the plane blank to pick you up and then return it blank to San Diego after leaving you in Santa Monica at the end of the flight. This reorganization adds expenses to the operator’s net profit and is generally added to your cost at the reduced hourly rate.
Overnight and waiting fees – suppose your flight flies from Santa Monica to Las Vegas on the same day. Your pilots will wait for you for several hours, and you will be charged an hourly rate for all of the pilots’ time. If your flight requires one-night stay, you may be charged hotel rooms for pilots and one-night parking fees on board. These fees will vary depending on local prices.
Daily Minimum Charge – Most aircraft operators have a minimum of two hours of operating fee for chartered aircraft. If you need to go on a one-hour trip in each direction and complete the legs of the trip in one day, you meet the minimum usage requirements and you will only need to pay for two hours that you use the plane on that day. On the other hand, if your flight is scheduled to travel for one hour on Friday and then return for one hour on Saturday, you will likely be charged for two hours on Friday and two hours on Saturday for four hours, although the plane flew for only two hours . This industry standard practice exists for the “time is money” principle. The plane incurs expenses even when it is sitting idle.
There are two distinct pricing structures in the air taxi model that can be used, and each aircraft operator will make their own decisions about what to use, the entire aircraft or for each seat:
Entire aircraft – again we’ll use Cessna Citation S / II for this example but the hourly rate will be higher than the rental rate of the aircraft; Let’s say about $ 2,500 an hour in this example, but you will not be charged for re-placing, overnight, waiting for landing or other fees. It will be a simple hourly rate for pickup and delivery. After the plane crashes, the plane can take another agent on a flight. The return flight may be in the same plane, or it may be in a different plane, or even a different airline. This type of air taxi service may only be available between certain airports that have sufficient traffic to keep the plane working for pay.
Per Seat – The Citation S / II has 7 passenger seats. If they make a flight with less than 7 passengers on board, the operator will lose money if he divides the fare by the number of seats. Therefore, they will set their prices in one of two ways:
1) Dividing the price completely by the number of passengers already on board for each flight. Suppose you travel with two colleagues, and there is another group of two that will travel with you on this trip for a total of five passengers. Seat price will be $ 2500/5 = $ 500 per seat. If your group was the only one on board, then the hourly price for each seat would be: $ 2,500 / 3 = $ 833 per seat.
2) Dividing the price completely by the average number of passengers carried by the operator per trip. Suppose the operator has been going the SMO route to LAS for quite some time and they have decided that they can routinely get an average of 2.9 passengers per trip. If the operator uses this pricing strategy, you will be charged $ 2,500 / 2.9 = $ 862 per seat per hour. This will be the same price regardless of the number in your party.
Pricing per seat will only be available between city pairs that have limited traffic to keep the plane full of passengers paying. If you want to travel to an airport outside the city network for every seat, you may need to hire the entire plane because the seat price will likely not be available.
It’s all about efficiency:
The emerging air taxi business model brings more efficiency to the aircraft rental model. Reducing waste would be equivalent to reducing greenhouse gas emissions, increasing productivity, and lower final costs. Air Taxi is expected to become more affordable and cheaper as VLJs are produced and made available for charter flights and Air Taxi. These aircraft promise to provide 20% to 40% of discounts from existing jet aircraft such as those in the example. As of this writing, about 100 VLJs and a handful of them have been produced and found their way to air taxi business along the East Coast and Chicago area. But this is another story.