It has a long-lasting tradition going back to the 80s, when ski-related missions started. The number of providers is more or less stable and there are some ‘big names’ with long-lasting history, extended client network and stable financial background.
European routes are shorter, typical missions are like a ‘hop-on-hop-off’ tour, average total mission flight times are somewhere between four and six hours only. It means that real costs are relatively high per flight hour as landing, handling and fuel consumption fees must be divided by fewer flight hours. Despite the fact that the EU’s total inflation rate has been above five per cent since 2015, the pricing is stuck at a historical level; it was and is almost impossible to build that into the quotes. Insurance and assistance companies insist on pushing prices down, choosing the cheapest option, so providers quote under each other, while costs (e.g. doctors’ wages, normal household fees, like electricity, not just direct flight operational costs!) have risen significantly, especially over the last two years.
Volker Lemke from FAI said in a recently published interview that real hourly rates for a Learjet operation should be around €2,900 but they must quote around €2,400, only to be competitive. The same goes with TrustAir. Turboprop numbers should be around €2,200/fh, but we can’t really quote above €1,800. Those numbers still come from pre-Covid times, and will have to be adjusted sooner or later, but our clients, partners must acknowledge that beside the global inflation trends and rising prices, Covid was a gamechanger, as well.
The Brent oil price/barrel is US$125, which will result a further increase in kerosene prices. The Ukrainian war further escalates the mess within Europe, resulting in uncertainty within the tourism industry. And the annual inflation forecast for 2022 within the EU zone was 3.6 per cent - before the outbreak of the war. So, I am sure that price increases will be a must, and insurance and assistance companies must prepare themselves for this.
Many airports have reduced opening hours due to the falling number of commercial operations, resulting in reduced availability and significantly higher extra opening hours fees. Despite the fact that European missions are usually shorter, it is still almost impossible to arrive everywhere within the given normal opening hours. Either your departure or your arrival falls out of those, and then you are forced to pay as high as €3,000 for example in Graz, Austria. Just comparing this extra amount to the total quoted price of a typical Balkan-Austria mission, where the price is less, than €10,000 only this extra opening fee will get you almost 30 per cent of the total market price!
There was an air ambulance boom last Summer within Europe. People stayed inside the continent, and this is expected in 2022, even in 2023. Short-haul missions will further dominate, with long-haul Asian and US mission numbers expected to recover only afterwards. This means that correction of prices is vital not only for operators, like TrustAir, but even for worldwide operators, as fewer intercontinental missions are unable to compensate for the increased costs of shorter missions.