Flight hours a year to breakeven

[TradingPilot]

Hey Guys,

I have been doing some calculations on the costs of the charter business. From what I found out it looks like the mid sized jets need to fly around +-250 Hours a year to break even. Am I right or way off here? Seems like quite a bit of hours a month. I have been looking at flightaware and no one is really flying that much.

Thanks,
TradingPilot

 

[rice]

How are you defining breakeven??

 

[Deskdriver101]

as requested by Rice to you would need to define breakeven. I will you I evaluated a LJ60 a couple of years ago and based on the owner flying approx. 250 hrs annually, the aircraft would need to fly approx. 800 hrs annually to cover fixed and direct expense.

There is a GIV operator out in charter world with a dedicated charter bird and the aircraft needs to fly 100+ hrs per month to cover operational expense and debt service.

 

[TradingPilot]

By breakeven I'm defining everything. Insurance, hangar, maintenance, loan payments, fuel, pilots, charts. I used a citation sovereign as my research plane.

If you guys are saying it takes 100 hours a month to break even it seems like an impossible business. Why even bother doing it!?

 

[Amish RakeFight]

Why would you plan on entering the charter business at a time like this. There's a huge drop in clients right now.

 

[Amish RakeFight]

One of the reasons JB (via their "CEO" ads - hey not every CEO is of a fortune 500, lots of smaller players who used to charter flights) is trying to siphon the borderline charter customers into their planes right now.

 

[Deskdriver101]

By breakeven I'm defining everything. Insurance, hangar, maintenance, loan payments, fuel, pilots, charts. I used a citation sovereign as my research plane.

If you guys are saying it takes 100 hours a month to break even it seems like an impossible business. Why even bother doing it!?

That's where owner's come into play. 135 is built around the aircraft owner / management company relationship as it is almost impossible to purchase a new aircraft for the sole purpose of making it available for charter.

 

[airfreight_us]

The main purpose of offering your aircraft to the charter market is to help subsidize your cost of ownership. I can't say that in my many years in the business that I have spoken to an aircraft owner that anticipates breaking even, let alone making money by offering their aircraft for charter. So in other words, if the aircraft flys charter while the onwer is not uing it, then he can spread his fixed operating costs out over more hours. Thus reducing his hourly operating cost. Hope that helps.

 

[TradingPilot]

Why would you plan on entering the charter business at a time like this. There's a huge drop in clients right now.

Im not interested in starting a charter business im just trying to understand the financial side of aviation that not many talk about. It is very hard to find information on aviation finance.

 

[Shag McNasty]

I don't know much about the financial side either, but I think the tax breaks and depreciation on your personal aircraft can save a private owner millions of $$ on 135.