Paying Too Much in Fuel Surcharges?



Am I paying too much in fuel surcharges?

Have you ever wondered if the fuel surcharges on your private jet invoices for your fractional jet share were accurate? It is difficult to know what the fuel cost is every month and this can be a time consuming endeavor to verify all the data on your invoices each month.

Jet Advisors’ research has revealed errors on invoices for fuel surcharges. One audit revealed an error of $225 in fuel surcharges on one trip based on an inaccurate fuel adjustment factor.

The truth is the fractional jet service providers are generally charging fractional jet owners according to their contracts but at least one of the fractional jet service providers is exploiting the fuel surcharge as a profit center as opposed to protecting the profit margins.   Multiple fractional jet service providers are charging clients based on “their” cost of fuel which sounds fair but it is a nebulous number and nearly impossible to confirm.   Others charge based on the national average of fuel but it is obvious that they do not pay that rate at the pump.

How do you protect yourself?   Survey the different operators before signing the documents.   Have them quote their fuel surcharges for the posted rate of fuel is at $2.00, $3.00, $4.00 & hopefully not $5.00 a gallon.   This will give you a written record so that when fuel reaches that level you can check against what they assured you when you bought your fractional jet share.   If they base their rates on the national average, this will serve as a contract extension but if they use their “cost” of fuel, then this can only be used as a guideline to understand if they are buying fuel at a lower discount than they had at your time of purchase.   There could be legitimate reasons for the rise in their cost of jet fuel, however, this would be counter intuitive if their buying power increased during that time.

Ultimately there has to be some trust between you and your fractional jet operator about the mechanics of their fuel surcharges.   Remember, these operators continue to have some of the best safety records in aviation.    With the best intentions, all companies will make some errors in reporting and those errors can cost you, the private jet flyer, thousands of dollars.   There are companies who audit invoices like Jet Advisors and can insure against accounting errors, flight time variations and contractual accuracy.