Sky Aviation Holdings

Aviation Industry Cost Increases

Over the past 18 months, commercial and private aviation companies have seen unprecedented cost increases unlike anything in its history.

June 15, 2022
Pompano Beach, FL

Why Are Airline Costs Are Rising?

Fuel Prices up 100% , Pilot Salaries up 47% and Maintenance Costs up over 30%. These rates are expected to continue to rise due to increased flight demand, supply constraints, and increasing costs of pilot wages, fuel, and more.

SkyshareUSA (SSUSA) to keep our rates as manageable as possible. Specifically, we have not raised our Management Fees since May 2020, and we continue to provide our Fractional Share Owners their fuel, pilots, and aircraft maintenance at our cost.

We’ve been leaning on our advanced technology, our strong relationships throughout the industry, investing a hundred thousand dollars into our own aircraft maintenance facilities in North Carolina, and utilizing all Divisions of Sky Aviation Holdings to mitigate the dramatic rise of fuel prices and pilot salaries.

Rising Pilot Salaries

With the increasingly limited pilot availability and their increasing demand, there has been an unprecedented increase in pilot salaries in the Commercial and Private Aviation industries. Business Aviation News states that pilot salaries have increased 47% over the last 12 months.

Even after raising our pilots’ base salaries by 25% and adding additional incentives, our fractional program has lost some of our chief pilots to commercial airlines who effectively doubled their salaries. At present, Commercial airlines alone need to hire 205,000 pilots.

Rising Fuel Costs

Regarding the fuel increase in our Direct Operating Costs, just like the pain we all feel at the pump, aviation fuel has essentially doubled since 2020. Fuel at FXE was $2.60/gal., and our base rate was $3.00/gal. As you are all aware, we have had to raise the Base Fuel Rate (BFR) to $6.00.

To keep your fuel costs as low as possible, we do not charge an arbitrary “Fuel Surcharge” to your Hourly Rate. Instead, we bill an exact “Fuel Differential” the difference between the Base Fuel Rate and the price at each respective refueling event.

Every fractional owner receives fuel at our cost; it is not a profit center in our business model. We also track fuel prices every day and refuel at locations where we have “Contracted Fuel Prices,” or if that’s unavailable, at the least expensive location. i.e.: Last week AvGas was $12/gal at Teterboro, NJ.

Aircraft Acquisitions

In recent months, the demand for private jets has reached all-time highs, with inventory at historic lows. The result is our Aircraft Acquisitions Team has seen the cost of aircraft essential double in the past year. This is good news for existing owners, as every Fractional Ownership company’s share price increased and the cost of fractional jet ownership has had no choice but to follow the upward trend. Our share prices will consequently have to increase as well.

The Prices of Charter and Jet Cards Are Increasing

Since the fourth quarter of 2020, Charter Aircraft Rates have risen 21 percent and since the end of 2021, rates have climbed an additional 5 percent, according to Private Jet Card Comparisons after analyzing more than 250 jet card programs.

Today, hourly rates for fixed jet cards are up 47 percent for turboprop aircraft, 35 percent for light jets, 24 percent for midsize jets, 22 percent for super-midsize jets, and 17 percent for heavy jets, and 16 percent for ultra-long-range jets since the pandemic began.

SkyShareUSA Is Trying To Mitigate Costs

However, the “Good News” for our Owners is we are doing everything possible to mitigate the rising costs that are out of our control to keep our rates as manageable as possible.

Our unique business model allows us to pass along its benefits and cost savings to our owners. I want to assure you everyone here remains committed to continuing to provide the lowest operating costs in the Fractional Ownership industry.

Feel free to contact us if you have any questions. Talk with an Aviation Expert at 407-923-2336.