The Two Types of Business Jet Flights

The two types of business jet flights we highlight here are "charter" flights and "corporate" flights.  Charter flights tend to make much larger contributions to the Airport and Airway Trust Fund, relative to "corporate" flights.  These are also referred to as "non-commercial" or "commercial" flights, respectively.

Chartered Flight

A chartered flight invovles a financial transaction between the aircraft's operator and the passengers flying on that aircraft.  For instance, if two executives from ACME Corporation need to get from Boston to New York, they might hire a company who owns a jet, has pilots and will arrange the entire trip.  They will pay for this service, and the entire transaction will be subject to the same taxes and fees paid by airlines.  More on special aviation taxes and fees >>

Corporate Flight

A corporate flight on the other hand does not involve the financial transaction.  For instance, if two executives from ACME Corporation fly on the ACME company jet, which is owned and operated by ACME, this is not subject to the same suite of aviation taxes and fees.  Instead, this flight will pay a non-commercial fuel tax which will deposit far less into the Airport and Airway Trust Fund.

This highlights the principal problem with today's ATC-funding mechanism; it does not charge users based on their consumption of ATC resources.  Instead, it is based on a variety of factors, inlcuding:

• Fuel burned during the flight
• Number of passengers on board the airplane
• Ticket price for airlines
• Mission
• Charter price for certain private jets
• Shipping costs for cargo

Unfortunately, none of these factors are directly tied to FAA's cost to provide service.  Here's an example:

A 737 might fly from New York to Boston with no passengers on board.  Because there are no passengers, no ticket tax or segment fee revenue is generated.  Thus, this flight will contribute a very small amount (through the fuel tax) to the upkeep of the ATC system.   On another day, this same flight might fly with 135 passengers on board; each of whom paid $100 for their ticket.  This will generate $1,457 in ticket taxes and segment fees, in addition to the fuel tax.

Since both flights impose the exact same burden on the ATC system, both flights should make the same contribution to the upkeep of the ATC system.  Fundamentally, the ticket price and the number of tickets sold is completely unrelated to FAA's cost to handle the flight.