High society

It's a challenging process, although O'Hare believes Royal Jet's employees are equal to the task. "You have a relatively small customer base, so everything has to be perfect," he says.

"When somebody rings and says ‘we need to charter an aircraft to pick someone up in Zanzibar and fly them to China' everything has to be planned from the ground up. We need to understand the customers and their needs, such as catering requirements and whether there are specific nationalities they want on board as their crew."

"We then have to plan the trip, such as over-flight permits for every country we fly over on a particular route, quotations, ground handling, catering, crew accommodation and all the customer needs."

"There is a lot of pressure often at short notice to bring all these elements together to make the perfect trip." Like most industry operators, Royal Jet has been forced to adapt to rising fuel costs. Last month, analysts predicted an increase to $140 a barrel - much to the sector's dismay.

Nevertheless, O'Hare is confident the "highly profitable" operation will continue making money regardless of whether or not oil prices climb.

The seasoned aviation figure adds Royal Jet's business model provides cause for optimism. Indeed, unlike commercial carriers, the company can tailor costs for individual flights amid difficult market conditions.

The upshot is that while airlines providing scheduled services need around 70% passenger loads to make a profit, Royal Jet can alter prices to ensure all flights generate healthy returns. It can also provide flights whenever clients require, unlike all commercial airlines.

"The Boeing Business Jet strategy has been highly successful, but it's challenging," O'Hare says.

"The cost structure is different to an airline because you're not selling tickets, you're selling an aircraft. You always cost the aircraft so you can make a profit. An airline works on probability for the trip being profitable because it has to run a scheduled service. It can't always guarantee it will have a full load on every flight, so that's the key difference between us and them."

Despite having flexibility to alter rates, O'Hare insists increasing the fare in line with rising fuel costs is rarely considered. Instead, Royal Jet's management prefers to offer "competitive prices" regardless of market conditions.

Other aviation directors have taken a different stance, with Qatar Airways' CEO Akbar Al Baker recently admitting the airline's passengers will subsidise rising oil costs. But O'Hare and his colleagues are reluctant to follow suit.

"You can't say ‘fuel has gone up $120 a barrel so we will increase the costs by 20-30%' because there's always a risk your competitor won't do that," O'Hare says.

"Private jet businesses are more disciplined and customers understand that. I've seen many examples of an airline that has put up prices based on fuel costs and a competitor hasn't. The market is very competitive so a $5 increase on a ticket when you're relying mainly on travel agents can lose you quite a lot of money. You have to be extremely careful."

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