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Charter Volume (Apr 7, 2022)

Update From NBAA S&D

Fuel price continues to be a significant topic of discussion for FBOs and operators alike. Trying to adjust the pricing for fuel itself and/or fuel surcharges has never been harder. One resource that is worth a look is this site from IATA (thanks to Joe and the team at Everest Fuel for their insight on Jet-Fuel):

The above charts look at price per barrel. If we look at data from AirNav that reflects an average of the posted retail price at over 2,500 FBO's the price is up just over $1.00 per gallon since early February. That price is likely to increase because many FBO's price based on their last fuel load, which may have been at a lower cost. Overall we do see retail prices lagging the fuel indexes for this reason.

So far the war in Ukraine has not had a material impact on charter flight volumes. For the first two weeks of the month, volume is up 17.8% vs 2021 for the cohort of aircraft that we track. This is compared with 18.8% for the full month of February.

When we shift focus to charter hours, you'll see that volume is now trending in-line with 2021 volumes. The last week of March was within 250 flights of the same week in 2021 for the charter market. My take on this is that the biggest factor is the ceiling on the industry's current capacity. That said, we have increased capacity slightly YoY and therefore we should be seeing increases in the 3% to 5%. Tracking at less than that may be the first signs of impact from the war in Ukraine. The combination of the trickle down of certain economic sanctions, uncertainly about the long term outlook for the global economy, and the increase in the price of fuel may be tamping down demand ever so slightly.

The Part 91 trend off 3.7% week over week, but volumes are still higher than charter on a YoY basis largely because the Part 91 volume took longer to recover last spring. In any case, our volumes industry-wide are still quite strong with monthly numbers that are up 9.5% YoY for charter and 30.4% for Part 91, which is awfully good all things considered.

From an airport perspective, here is a look at Van Nuys, which illustrates the macro-level trend that we're seeing. Note how the gray line from 2021 has climbed in recent days, so that it converges with the red line for 2022. This brought the YoY number for the last week of April to 3.8% with a week over week increase of 6.06%.

If you happen to be in San Diego, stop by booth 1516 to say hi and to get your socks like Nelson has. We would love to see you, and we don't want to take any socks back with us if we can help it.

If you're not in San Diego and want socks, you can follow this link to get a pair:

Best regards,