Matt Thurber, editor-in-chief at AIN Media Group, has been flying since 1975 and writing about aviation since 1978 and now has the best job in the world, running editorial operations for Aviation International News, Business Jet Traveler, and FutureFlight.aero. In addition to working as an A&amp;P mechanic on everything from Piper Cubs to turboprops, Matt taught flying at his father’s flight school in Plymouth, Mass., in the early 1980s, flew for an aircraft owner/pilot, and for two summer seasons hunted swordfish near the George’s Banks off the East Coast from a Piper Super Cub. An ATP certificated fixed-wing pilot and CFII and commercial helicopter pilot, Matt is type-rated in the Citation 500 and Gulfstream V/550. Based in the Pacific Northwest, Matt and his team cover the entire aviation scene including business aircraft, helicopters, avionics, safety, manufacturing, charter, fractionals, technology, air transport, advanced air mobility, defense, and other subjects of interest to AIN, BJT, and FutureFlight readers.

Editor-in-Chief

Matt Thurber

The U.S. charter market is undergoing wrenching change due to a sudden drop in activity, according to charter operators and industry observers. 
Although charter activity varies by location, “most people are telling me [that business has dropped] about 15 percent,” said James Coyne, president of the National Air Transportation Association (NATA), which represents charter companies. “There’s no doubt that the economy is in recession in the aviation industry. Recession is defined as when the gross national product has fallen for two quarters, and it’s safe to say that aviation activity has fallen in the last two quarters.”
The biggest factor leading to the decline in charter activity is dropping corporate profits, Coyne said. “Fuel costs normally aren’t that much of a factor, if corporate profits continue to rise.” But with corporate profits declining, “High fuel costs and pressure on budgets for people who travel” are causing a decrease in charter, he explained. 
Traffic Down from Last Year CharterX Wyvern, which tracks the charter market closely and operates the Industry XChange online charter marketplace, has documented a year-over-year drop in buyer traffic of 25 percent, according to Jim Betlyon, CEO. The level of supply (available charter) remains at normal levels, however.
Breaking down the buyer traffic numbers regionally, CharterX Wyvern sees a 22-percent drop year-over-year in the New York area and 14-percent month-over-month. Los Angeles-area traffic is down 6 percent year-over-year and 1.5 percent month-over-month, Betlyon said.
One large charter operator told AIN that he has noted a 25-percent drop in charter activity nationwide. “Our business is down with the rest of the market,” he said. “We’re going to see a lot of companies go out of business.” 
Another charter company said, “May and June have been way off.” In March, this company flew 135 hours in one of its Hawkers, and only 20 hours in May. “June was just as quiet,” he said. “The industry is now undercutting costs just to try and move airplanes.” Everybody in the industry is hoping that business returns to normal in September and during the normally busy holiday seasons. “If it doesn’t,” he said, “there’s going to be a lot of trouble out there.”
This operator is positioned well for the downturn, he said. “I think we can weather the storm for another year before it starts to affect us in a big way.” The company has its own fuel supply, does maintenance in-house and owns its aircraft. “It’s a low-overhead flight operation,” he said, “we don’t keep a lot of excess around.” Another strategy the company uses is to adjust its fuel surcharge weekly, based on the latest fuel price information. He explained that other operators that buy fuel from FBOs often don’t know their fuel costs until all the paperwork has been reconciled and thus make surcharge changes too late to recapture high prices that they paid. 
Kennesaw, Ga. charter/management firm FlightWorks has managed to keep its business activity from dropping too much. James Lara, FlightWorks president, said, “The market is challenging, no question about that. We’re probably treading water or down a little bit.” But at the same time, the complexion of the typical customer is shifting to more serious business users of charter flying. 
Ron Smith, FlightWorks vice president of business development, explained that while some business sectors are halting charter because of financial difficulties, other sectors have grown, such as energy companies, the medical industry and donor activities. 
Said Lara, “Companies in every sector are facing tough cost pressures. This is reflected in all their business dealings.” FlightWorks has had success discussing the value of their business activities with its clients and how charter can help. “Any service company today that doesn’t focus on the creation of value for clients has got a short life,” he said. “Being in front of your customers, that’s the deal. If you’re not, somebody else is going to be there.”
“My advice,” echoed NATA’s James Coyne, “is do more flying. It’s a buyer’s market in deals now, but you’ve got to go out and buy. There’s a real opportunity for those who are shrewd enough to take advantage of the opportunities that exist. I hope smart businessmen and women are saying now’s the time to sweep up some deals and get in the airplane and do it.”

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