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I am not sure if this is the right site for a question that asks about the economics of aviation rather than the technical aspects of it, but I couldn't find any other stack exchange site so I am asking this here.

As far as I understand, the reason why commercial aircraft are cheap to travel in is because the operational costs of the aircraft are divided among the many passengers in the flight. A fair share of the maintenance costs come from depreciation of the aircraft and the engine overhaul and inspection. In a business jet, I would assume the cost of fuel and the landing fees are much smaller than that of commercial aircraft and, as a result, do not add much to the cost per seat (since the costs are proportionally smaller - approximately at least). So I suspect that costs such as engine overhaul and aircraft inspection do not scale with aircraft size and are approximately the same for both business jet and large commercial aircraft. As a result, the price that each passenger has to pay is much higher.

I tried looking for a few sources on the internet that confirm this but couldn't find any that show a detailed account of expenses. If this hypothesis is correct, I would appreciate it if you could direct me to a source that compares the operational expenses of any commercial aircraft with a business jet.

So is it safe to say that travelling/ transporting cargo is cheaper in a large aircraft than a smaller one if the fuel efficiency is comparable?

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  • $\begingroup$ This is a great question, and I would hate to see it closed due to resource questions being off-limits. I would suggest removing that entire second paragraph. Anyone answering is free to provide a reference to backup the information they provide. $\endgroup$ Jan 16 at 17:16
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Aside from the economy of scale effect of a large aircraft vs a small one you can compare apples for apples by looking at the same type used on both roles.

The Canadair CRJ200 was sold as both a regional airliner and a corporate jet, called the Challenger 850, so it makes a good comparative example.

The Challenger 850, being, mechanically, a CRJ200 with a corporate interior, has pretty much the same numbers for fuel burn etc, as a 200. But it's only carrying 1 to 12 passengers, vs up to 50. So even "full", its fuel burn per occupied seat mile is always going to be several times higher than the airliner version operating with decent load factors (and they aren't much lighter; the corporate interior is very heavy and with 12 bodies aboard you are close to gross weight with a large fuel load - add in a long range fuel system option by STC for that airplane, and the payload with full fuel was 2 persons... yes, 2).

Then there's utilization. The CRJ 200 airliner averages about 2500 hours a year. A Challenger 850, like most corporate jets, averages 300-400 hours per year (corporate shuttle versions fly a lot more, maybe over 1000, but they have regular airline style interiors). All the fixed costs of operation are amortized over a way smaller number of operating hours (most corporate airplanes would fall apart if you put airliner hours on them; they are not designed for that level of use - this made the Challenger 850, with an airframe meant for 2500 hours/year, absolutely bulletproof in its corporate role).

So you have a cost double whammy. You're using several times more fuel to get around for each warm body on board (what I might call "warm-body-miles"), compared to an equivalent airliner, and you're doing it infrequently and so are paying through the nose for all the fixed costs like insurance and hangar space, etc.

The reason for the existence for most corporate airplanes is the time valuation of the "warm bodies" travelling on it. A large company makes the calculation that the value of the CEO, and the CEO's lieutenants' time, justifies the astronomical operating cost of a corporate aircraft; in effect, the jet makes money for the company by making the senior management's job more efficient (in theory - no doubt a lot of it is just "because they can").

If you're the other type of corporate jet owner, the ultrawealthy who own the planes personally, economics doesn't even come into it (I knew a guy who looked after corporate jet purchasers pre-delivery, and he told entertaining stories of bizarre customer meetings, with oligarchs and their children arguing over 500,000 dollar interior options as if they were fighting over who got to lick the cake icing spoon).

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  • $\begingroup$ Sorry, was out of country and couldn't respond. Great answer though, it clears a lot of things up! $\endgroup$
    – Chandrahas
    Jan 26 at 12:05

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