16. Page 3-7
3. Program Characteristics
Private Jet Travel: Understanding the Options
Like Block-Frax, Block Charter offers benefits (e.g., easier scheduling,
guaranteed availability) to customers that agree to pay in advance for air
transport services they intend to use during the year. While operationally similar
to Fractional Ownership programs, there is no transfer of ownership to the
customer under a Block Charter contract.
Some Block Charter programs offer a dedicated fleet that they own or lease.
They might augment this fleet with excess capacity on aircraft they manage on
behalf of private owners, and/or with similar aircraft available for charter from
third-party charter companies. They might audit the safety and consistency of
these backup aircraft themselves, or rely on outside audit firms to conduct these
inspections. At the opposite end of this scale are Block Charter companies that
can be viewed as pure brokers: they match customer needs with aircraft provided
and operated by third-party charter companies, in some cases with no auditing of
such third parties.
Both types offer customers similar transportation options, but the consistency,
cost, and service standards can vary greatly by the nature of the chosen
Financial Considerations of Block Charter
The financial structure of Block Charter contracts is much like that of Block-Frax.
One comprehensive upfront fee either covers your aircraft use for a fixed number
of hours, or forms an account that is “debited” based on aircraft usage at a pre-
set hourly fee. Note that a dollar-for-dollar “debiting” can mean that the customer
winds up getting fewer hours if the hourly “charge” is increased.
The various Block Charter programs handle miscellaneous charges in differing
ways. While some may truly offer an all-inclusive hourly rate, others may bill you
for overnight fees (if incurred), standard catering, fuel surcharges, etc. Some
charge taxi time on top of flight time, and some add further additional charges.
You should be prepared to ask Block Charter operators to provide you with a list
of any charges that fall outside of standard fees.
Some Block Charter providers market themselves as “Membership Card”
programs, where you can add value to the card balance at any time. They do,
however, require a minimum balance to initiate membership. Other programs
require similar levels of upfront payment, but treat the relationship with you as
more of a one-year contract. With most programs, any balance of your upfront
payment remaining at the completion of your term is forfeited – you are indeed
committing to use the number of hours you agree to purchase.
As an incentive, some Block Charter programs offer a frequent user program,
similar to commercial airlines (one is even offered in conjunction with a major
airline). Rewards can be in the form of additional hours, discounts for renewal, or
other flexibility-enhancing enticements.
There is a range
of Block Charter
Block Charter fee
Independent Source: Deloitte Private Wealth, Private aircraft: Flying private makes sense for those with the right information (page 20)
*This website has no affiliation with Deloitte.