One in Three European Charter Legs Fly Empty

 - May 15, 2012, 3:15 PM

European charter operators are the least efficient in the world due to a higher rate of empty-leg flights, Avinode managing director Oliver King said here at the EBACE show. On average, the online charter broker said that approximately one out of every three flights (33 percent) conducted by European operators is an empty leg, versus a global average of 29 percent.

Charter operators in Russia/CIS are the most efficient, with only a 25-percent empty-leg rate, followed closely by the U.S. and Canada at 27 percent. Middle East operators have a 31-percent empty-leg rate.

According to King, the abundance of available aircraft across the U.S. accounts for the increased operational efficiencies in North America, while centralized demand centers in Russia means charter aircraft can be based near their customers. In Europe, he said, “There is a pull of demand from the East where, in order to capture business, jets from Europe travel great distances to pick up passengers from Russia, the CIS, Ukraine and Turkey.”

Additionally, European aircraft operators tend to bring their aircraft back to the home base after every mission. This is “in contrast to U.S. operators, who are more likely to float their fleets to increase their operational effectiveness,” King noted. The inefficiencies in the system are central to the thinking of companies such as FlyVictor.com, which aim to give end users the chance to share aircraft or take advantage of empty legs.

European Charter Demand Up

Meanwhile, Avinode (Stand 749) said its year-to-date aircraft charter demand index is “slightly up” in Europe. As of Tuesday, the company’s forward-looking aircraft charter demand index stood at 156.71, up some 34 points since May 14, 2011. Avinode’s demand and price indices are measured against a January 2009 baseline index of 100.

Throughout the rest of 2012, Avinode is predicting an average 2.5-percent increase in charter demand in the “Old World,” with much of this expected growth coming in the form of more chartering of large-cabin jets. By aircraft segment, light jets currently account for around 57 percent of European charter demand, midsize jets for about 20 percent, and large-cabin jets for the remaining 23 percent.

In the meantime, aircraft charter pricing has firmed up over the past six months in Europe. Avinode’s price index on November 1 hovered around 98, but jumped to more than 103 by March. Pricing eroded slightly in April but is now back to levels seen in March and appears to be headed upward at a steady–if somewhat slow–pace.