Avinode Data Confirms Uncertain Outlook for Charter Market

 - October 26, 2010, 11:28 AM

Price index data from online charter portal Avinode reinforces the impression reported by operators and brokers that the market has been making a slow and gradual recovery during the course of this year. Analysis of the company's price index since Jan. 1, 2009, shows a marked decline in expected rates for worldwide charter, as well as specifically within Europe and the U.S., followed by a slow recovery.

Through August 2009, all three of these sectors were declining at about the same rate. Then ­Europe started to flatten out, while rates for the world and the U.S. continued to fall until they reached a low point around the turn of the year. Since January, the figures for the world and the U.S. have shown a more pronounced upturn than those for Europe. As of September 30, the price index for the U.S. stood at 98.13–less than two points below the January 2009 baseline index of 100, while ­Europe and the world were not far behind at 95.90 and 96.63, respectively.

Avinode also generated data for AIN, breaking down flight requests by region (Europe, North America, the Middle East and the rest of the world), comparing last year and the first seven months of this year with a baseline of 100 as of January 1. By contrast with the price index data, these statistics show European demand accelerating beginning this spring. In all sectors, the recovery can be seen to take off from around October 2009, but the data then shows some fluctuation in the fortunes for the global numbers, as well as for those of the U.S. and the Middle East. By contrast, ­Europe's flight demand data continues to ascend.

Studying Avinode average flight hour prices for three sample aircraft types over the past 12 months confirms the impression given by operators and brokers of a period of somewhat patternless, unpredictable price fluctuation–albeit within fairly narrow bands. Comparing average rates between October 2009 and the end of September 2010, those for the Bombardier Challenger 604, Hawker 800 and Cessna Citation Excel have increased modestly in the U.S. market, while falling slightly outside the U.S.

Within this time frame, rates fluctuated across the board and, generally, not in ways that fit the established demand patterns for operators being busier in the summer and fall months. At face value, the changes in flight-hour prices paid seem small, but to operators already struggling to achieve any sort of worthwhile profit margin even small shifts can seem critical.