Private jets face a $50,000 war
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Private jet operators are being charged up to $50,000 in “war risk” insurance costs to land in the Middle East, a fee that can sometimes double the price of renting a plane in the region.
In some cases, jet operators are refueling outside the region to cut insurance costs by reducing their time spent on the ground in the Gulf, brokers and operators said.
The initial surge in demand for private travel from the Gulf following the first US-Israeli attacks on Iran this month has waned as commercial airlines such as Emirates restarted flights after thousands of cancellations in the early days of the war. However, there is still significant charter traffic in the area, airspace is limited and wealthy residents are either trying to return or leaving.
“Traditionally standard insurance would cover the Middle East without any problems, but they need additional cover to be able to enter at this time,” said Charles Robinson, founder of the platform Enterjet.
“The cost is quite significant. We have seen instances where war risk insurance alone for a trip has gone up to $50k more than the standard charter rate. It depends on the airport, the time on the ground at that airport, various terms in the insurance contract.”
While the typical “war risk” premium is typically $5,000-10,000, it can reach $50,000 for a trip in addition to other insurance and running costs, said two other brokers still working in the sector.
Toby Edwards, co-CEO of charter brokerage Victor, said his group was being quoted £10,000-30,000 for war risk insurance, depending on the type and age of the aircraft.
Dan Hurley, co-founder of broker Global Charter, said prices can vary greatly depending on the type of aircraft. “The 2020 Global 6000 will require significantly additional insurance compared to the 1991 Gulfstream GIV through asset valuation alone,” he said. “It’s all relative, so if you’re not too fussy on the plane you can avoid a hefty bill.”
Prices for renting aircraft from the Gulf soared up to three times in the early days of the conflict, when private jets from airports such as Muscat in Oman or Dammam in Saudi Arabia were the only way to leave the region.
The outbreak of the Iran war left hundreds of thousands of travelers stranded in the region, with major airports in Dubai, Abu Dhabi and Qatar closed or disrupted for several days.
Airlines and jet operators report that those who wanted to leave the area have done so since the conflict began. British Airways last week stopped offering a daily return flight from Muscat, Oman, after being unable to fill planes.
Dubai Airport, which is handling a large number of Emirates flights every day, estimates it has processed about 1 million people in the three weeks since the conflict began.
Operators and brokers said prime prices for charter jets have fallen since the conflict began about three weeks ago, but they remain well above normal.
Hiring a large jet would typically cost around £10,000 for each hour of operation, although this doubled to around £20,000 including insurance costs after the conflict began.
Rising jet fuel prices, driven by the price of oil, which reached $115 a barrel on Thursday, are a significant factor. A jet broker said prices were so volatile that a charter operator was billed €2,000 after the plane landed in Europe to account for prices that had risen since the plane was booked.
