Survey reveals optimism, more competition in Euro charter

 - October 9, 2007, 4:27 AM

The European executive charter market is becoming more and more competitive, and the majority of operators and brokers expect demand to increase over the next 12 months. These are the main conclusions of a survey conducted by online charter network Avinode between April 1 and September 1.

The Swedish firm collected data from 80 of the 85 operators subscribing to its system, as well as about 60 of the 67 brokers that use it. These companies are located throughout Europe, but predominantly in the UK, Scandinavia and Germany.

The survey showed that increased competition is particularly apparent in falling rates for positioning flights. For instance, the average positioning cost for a Cessna Citation Excel fell from €3,250 ($3,542) per flight hour in April to €3,000 ($3,270) in August.

According to Avinode founder and managing director Niklas Berg, falling positioning charges indicate an increased tendency for operators to seek charter bookings for flights originating outside their own countries, and this is resulting in broader price fluctuations for the overall flight quotes. For example, using Avinode to search for a one-way flight from London Luton Airport to Nice, France, revealed net prices ranging from €8,500 ($9,265) to €9,400 ($10,246). Operators vying for this business came not only from the UK and France, but also from Germany, Switzerland and Denmark.

Asked how they view business prospects over the next three months (through the end of November), 56 percent of operators and 52 percent of brokers said they thought it will pick up; 22 percent of operators and 29 percent of brokers thought it would stay the same; and 22 percent of operators and 19 percent of brokers thought it would slow down. Asked the same question for the next 12 months, the respective results were 71/92 percent predicting an upturn, 24/8 percent expecting no change and 6/0 percent foreseeing a downturn in demand.

Over the five-month survey period, 35 percent of requests were for turboprops, 30 percent for light jets, 18 percent for midsize jets, 15 percent for large-cabin jets and 2 percent for piston aircraft. However, over the course of the summer, Avinode showed a gradual increase in requests for midsize and large-cabin jets, with corresponding dips in demand for light jets and turboprops.

Nitty-gritty Data
The distribution of charter bookings for the survey period was 55 percent for round-trip flights, 29 percent for one-ways and 16 percent for multi-legs. The average charter distance for turboprop aircraft was around 375 nm and 500 nm for ferry flights. The comparable charter/ ferry stage lengths for light jets were respectively 550/200 nm, 900/350 nm for midsize jets and 1,550/650 nm for large-cabin jets.

The Avinode survey found that the most commonly requested departure airport in Europe was Moscow Vnukovo, with 4.6 percent of bookings. Overall, the Moscow-area airports now account for 6 percent of all departure searches using Avinode. The second most popular individual airport for executive charter departures was London Luton, with 4.5 percent. In fact, London accounted for 12 percent of all departure searches. For arrivals, the most frequently requested airports were Nice (2.6 percent), followed by the Spanish resort Malaga (2 percent), Munich (2 percent), Paris Le Bourget (2 percent), Brussels (2 percent) and Moscow Vnukovo (1.8 percent).

Berg also told AIN that operator and brokers are increasingly looking to take advantage of empty-leg availability, although this is still problematic due to the essential flexibility of ad hoc charter bookings. Avinode lets customers offer and monitor the availability of empty legs in real time. According to Berg, several of his customers have predicted that eventually the majority of European executive charter flights will consist of one-way empty legs in much the same way as road-taxi services have long been offered.