As higher oil prices are set to hit consumers’ wallets at the gas pump, rising jet fuel prices may also impact your summer travel budget.
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Jet fuel prices have jumped 46.5% over the last 12 months to an average of $89.30 per barrel, according to the Air Transport Association.
The sharp increase will have more of an effect on major air carriers because the operating cost is much greater than for private aviation companies like Flexjet.
“In the private jet industry, our costs are really more around the aircraft, the pilots, the ownership of the plane. The fuel is a small portion,” Flexjet Chairman Kenn Ricci said during an exclusive interview with FOX Business’ Liz Claman.
Ricci said the effects of higher fuel prices won’t come as a surprise. As cost goes up, consumers will travel less.
“I think the airlines, the impact is immediate, but in the private jet world, that is kind of a three- to four-month delay. So we would feel that impact in the summer some time,” he said.
Flexjet offers charter and fractional ownership options to consumers. Ricci said Flexjet should be considered as a country club for members who want the immediacy of travel.
“When you say, ‘I want to tee off at two o’clock,’ you are on the tee at two o’clock,” he said on “Countdown to the Closing Bell.”
Ricci said a member’s travel cost varies by aircraft size, and fliers pay by the hour. Therefore, a jet used on a typical flight from New York to Los Angeles could run you upwards of $3,000 an hour.
The Flexjet chairman joined Claman who moderated a panel at Town & Country magazine’s philanthropy summit where Ricci donated $100 million, unrestricted, to Notre Dame University.
“If you believe in an institution, let them, you don’t know what needs they’re going to have down the road. So don’t restrict what they may want to do in the future,” he said.
Flexjet recently announced it’s set to open a private terminal at Braniff Centre, a 26-acre redevelopment project on Dallas Love Field. The company’s headquarters will remain in Cleveland, Ohio.