Private jet travel costs rise as fuel prices soar

As the Iran war pushes jet fuel prices higher, well-heeled travelers are facing hefty surcharges to fly private, sometimes on flights booked months prior, charter brokers and aviation insiders told CNBC.

Vimana Private Jets CEO Ameerh Naran said the firm recently booked a $520,000 flight from Dubai to London on a Boeing business jet for a client. That same trip cost the client $400,000 in 2023. The difference was entirely due to jet fuel prices — which now average about $4.65 a gallon globally — Naran said.

It’s yet another ripple in the recent disruptions to air travel.

More customers turned to private air travel during the pandemic to avoid crowds. The option remains popular and has become more important to the aviation sector as wealthier households prop up spending in travel and other sectors.

These deep-pocketed travelers are less likely to get priced out as airfares rise, but they have to navigate unexpected fees as brokers and charters differ on how they pass along fuel costs. Jet fuel prices in major U.S. cities were up more than 80% last month, according to Airlines for America, an industry group, citing Argus data.

Jet charter brokers like Vimana arrange flights with jet operators, which own the planes and buy fuel, on behalf of passengers. Naran said Vimana does not renegotiate contracts and does not reprice flights, but that charter prices have surged quickly.

He advised travelers to book sooner than later, saying any price hikes are likely to be sticky even if the Iran war ends soon.

Larger jet operators are slower to pass along fuel costs to passengers as they buy fuel in bulk and want to avoid alienating customers, according to Naran. However, operators will likely have to pay more at the pump when they replenish their supplies, and some are taking losses by not repricing flights, he said.

“There’s a long-term effect, because a lot of companies now will be making losses,” he said. “They’re not going to renegotiate the contract because they don’t want to spoil the relationship with the client, but if they’re making a loss today, they’ve got to recoup it.”

Jet charter prices have increased by 5% to 15% on average, with some rising by as much as 20%, since the Iran conflict began, according to charter broker Amalfi Jets’ database.