The term “air taxi” refers to an aircraft service that provides transportation to people on demand. That is, you can take a flight in a private jet whenever you want instead of booking a trip that was previously scheduled. Air charter is a form of air taxi, but a new class of aircraft and new business models are redefining the “air taxi” to mean something less expensive than traditional charter. The idea behind an air taxi system is that the aircraft operator will be able to reduce the number of empty flights that the aircraft must perform.

Air letter:

Let’s say you book a flight on a Cessna Citation S / II (CE-S550). This light aircraft can be chartered for an hourly rate between $ 1,500 and $ 3,100, depending on the age of the aircraft, the amenities, and the operator’s qualifications. For our purposes, we will assume a typical rate of $ 2,000 per hour. This price includes costs associated with operating the aircraft, such as the pilot’s salary and fuel costs, but does not include some additional charges that can add significantly to your expenses, such as:

Tax: generally 7.5% of the total price.

Repositioning Fees: Let’s say you want to fly from Santa Monica, California, but the plane is located in San Diego. The aircraft operator would have to send the empty plane for pickup and then return it empty to San Diego after dropping it off in Santa Monica at the end of the trip. This repositioning adds expenses to the operator’s bottom line and is generally added to their cost at a reduced hourly rate.

Overnight and Wait Fees: Let’s say your trip involves flying from Santa Monica to Las Vegas and returning the same day. Your pilots would wait for you for several hours and you will be charged an hourly rate for the pilots’ time. If your trip requires an overnight stay, you may be charged for the pilots’ hotel rooms and overnight parking fees for the aircraft. These charges will vary based on local rates.

Minimum Daily Charge: Most aircraft operators have a two-hour minimum operating charge for charter aircraft. If you need to take a flight that takes one hour in each direction and completes both legs of the trip in one day, then you meet the minimum usage requirement and would only have to pay for the two hours you use the plane that day. If, on the other hand, your trip is scheduled to fly one hour on Friday and then return for the one-hour trip on Saturday, then you will probably be charged for two hours on Friday and two hours on Saturday for a total of four hours, at even though the plane only flew for two hours in total. This industry standard practice applies to the “time is money” principle. Aircraft incur expenses even when idle.

Air taxi:

There are two different pricing structures in the air taxi model that could be used and each aircraft operator would make their own determination as to which one they would employ, full aircraft or per seat:

Full Aircraft – We will again use the Cessna Citation S / II for this example, but the hourly rate will be higher than the air freight rate; Let’s say around $ 2,500 per hour for this example, but you won’t be charged for repositioning, staying overnight, waiting for landing, or other charges. It will be a simple price per hour to pick up and drop off. After they drop you off, the plane can take another customer on a trip. Your return trip may be on the same plane or it may be on a different plane or even a different company. This type of air taxi service may only be available between certain airports that have enough traffic to keep the aircraft employed on a paid basis.

Per Seat: The Citation S / II has 7 available passenger seats. If they fly with fewer 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 two ways:

1) Divide the total price by the number of passengers actually on board the aircraft for each flight. Suppose you are traveling with two colleagues and there is another group of two who will be traveling on this flight with you for a total of five passengers. The price of a seat would be $ 2,500 / 5 = $ 500 per seat. If your group were the only one on the plane, the hourly rate per seat would be: $ 2,500 / 3 = $ 833 per seat.

2) Divide the total price by the average number of passengers carried by the operator on each trip. Let’s say the operator has been flying the SMO to LAS route for some time and has determined that it can typically get an average of 2.9 passengers for each flight it performs. If the operator uses this pricing strategy, they would charge you $ 2,500 / 2.9 = $ 862 per seat per hour. This would be the same price regardless of the number in your group.

Pricing per seat would only be available between limited city pairs that have the traffic volume to keep the aircraft full of paying passengers. If you want to fly to an airport outside the city network by seat, you will probably need to rent the entire aircraft as the price per seat is likely not available.

It’s all about efficiency:

The emerging air taxi business model brings more efficiency to the charter model. Less waste will equate to a reduction in greenhouse gas emissions, more productivity and lower final costs. Air taxis are expected to become more available and less expensive as Very Light Jets (VLJs) are produced and made available for charter and air taxi flights. These jets promise to provide discounted services of 20% to 40% of existing light jets, such as the one in the example. At the time of this writing, around 100 VLJs have been produced and some of them have made their way into the air taxi business along the East Coast and the Chicago area. But that is another story.