Though Part 135 covers many aircraft in the state, there are a few exceptions for those using general operating and flight rules, or Part 91, for commercial reasons, explains Alaska Air Carriers Association (AACA) Executive Director Jane Dale. One such exception would be carriers serving lodges as incidentals to the lodge business.

“You might just choose to buy an airplane and own it outright for your company and then use it whenever you need it,” says Hubbard, noting the type of plane a company purchases depends on its needs. “You might choose to charter a plane, which means you’d call a company that has a plane to get you where you need to go and bring you back.”

Matt Atkinson of Northern Alaska Tour Company and Wright Air Service points out that though his company specializes in charter flights in the Interior, scheduled flights will always be the cheapest alternative.

“Certainly, if you can jump on a scheduled seat to pick-your-village and come back on a scheduled seat the next day or later in the day, depending on the amount of servicing needed in that community, that’s by far the cheapest way to go—by far. A charter can’t compete with that,” Atkinson says, noting that there are some drawbacks. “Scheduled service is tough. You have to have full planes that have mail and freight sticking to a schedule. You don’t have that flexibility [that comes with a charter flight].”

As a charter operation, the businesses that Wright Air Service works with are mostly contractors, service organizations, Alaska Native corporations, and government agencies. In addition to the service sector, there are businesses that typically provide goods to more remote parts of Alaska via air.

“Where a charter starts to make sense is if you have a generator repair person who is costing $200 an hour; you don’t want to have that guy staying overnight—plus they’re going to have lots of material,” Atkinson says. Depending on the job, that material could include hundreds of pounds of equipment, which may require a business to reserve multiple seats on a scheduled flight to guarantee everything makes it onboard.

“If you need to have someone up there for two or three hours, and they’re bringing a bunch of stuff and some of it’s hazardous stuff, then chartering starts to make sense,” he says. “We have people who help determine [the cost benefit of chartering a plane] because sometimes, especially if you’re a contractor from the Lower 48, you’re not familiar with how it works up here.”

The equation to determine the cost of a charter is pretty straightforward, says Atkinson: in general cost is based on the type of aircraft being chartered, flight time, ground time, and any additional fuel requirements.

“There’s a certain opportunity cost as well; that’s why ground time is associated with that,” Atkinson says. “If you have hundreds of thousands of dollars of aircraft and the pilot away from base, they can’t do anything else. So, you have to have a revenue equation that makes sense.”

Though every company is different, Wright Air Service’s approach is to make sure it is able to factor in the opportunity costs as well as an incentive for a pilot to take the job.

“When it’s forty below, you got to talk someone into going and hanging out for several hours with no services and having to start the plane every hour,” Atkinson says. “And it’s a competitive market for pilots.”

In most cases, ground time is cheaper than flight time, as there is no fuel consumption to account for and the client isn’t generally charged for wear and tear on the engine and airframe when the plane is grounded.

Because most prices among charter companies are comparable, the real competitive edge for charter flight operators—at least in the Interior—is the ability to quickly confirm a booking, explains Atkinson.

“A portion of the time a charter will get people who are calling everyone they can think of,” he says. “The competitive nature for us is our ability to have the resources—both the planes and the pilots—available to quickly convert that to a confirmed booking.”

Though from the consumer side safety is almost always the number one factor, it’s mostly a given, notes Atkinson, because if a business is not comfortable with an operator they won’t even call them.

When considering who to contact for chartered air service, many businesses take into account the fact that typically charter companies specialize in specific industries, such as mining, or are based in a single region.

“Everything exists in Alaska in all shapes and sizes; they are capable of going on field or off field, large and small—I think the real question here is, if somebody has a specific question and knows what their load is, they’re welcome to call us,” Dale says.

Dale notes that the AACA will “never recommend” just one carrier but can assist in pointing business owners toward a group of carriers that might best meet their needs. However, chartering is not always the best fit for a business.

“Companies may decide, ‘Let’s just charter,’ because though it may cost more on a per-flight basis they’re going to spend far less than if they own an airplane,” Hubbard says. “That said, if you own a newspaper company and you have ten community newspapers, each with its own printing press—we have a company like this in the Lower 48 down in Kentucky—any time one of those printing presses goes down, you’re losing money. You’ve got to get a maintenance specialist from your headquarters to the printing press with the tools and get it back up and running as quickly as possible. In such a case, you’re going to want to own your own plane because you routinely have the demand week to week.”

Before a business takes the plunge to just purchase an airplane, there are a few more options, including fractional ownership and leasing.

“A lot of people find real value in what they call fractional ownership of a plane. What that means is that you go in with other parties, let’s say three or four, in the ownership of a plane,” Hubbard says, noting that it’s a similar concept to a timeshare. In such situations, the scheduling is managed by a central person or agency, while the partial owners divide the costs of buying and maintaining the aircraft.

Another alternative is an offer known as a “jet card,” which is a similar concept to a prepaid phone card for a business. Typically, a number of flight hours are paid upfront on the card and are drawn down through use.

“So those are a few of the utilization models that you find that are prevalent and used by people who need to use an airplane for business,” Hubbard says.

Another option for businesses is leasing a plane. This can be a solution for companies that expect to see their territory grow significantly as they scale up.

“Depending on the kind of airplane you’re going to have that is, in part, going to dictate what kind of range you’re going to have,” Hubbard says.

“So you may—I see this all the time with companies in NBAA’s membership—start out with a 100-mile territory around your headquarters, which you could probably handle with a piston airplane.

“Well, maybe five years on, your territory expands maybe an additional 100 miles a year outward. You can still do all of that, but you’re probably going to more easily do it with something like a turbo prop or a small jet.”

In such cases, leasing an aircraft can be a very attractive option, as it minimizes the cost of expanding a company’s footprint.

“The leasing versus ownership is a financing question,” Hubbard says. “In this case, what you’re asking is about the cost-for-utilization question. The underlying questions are the same: How often do we think we’re going to need an aircraft for business? What is the mission profile? How far are we going to have to go? How many people are going? Do we need more than one plane for the mission?”

A company needs to look beyond chartering or leasing a plane to owning one when the opportunity costs of being grounded become higher than the costs of owning and operating an aircraft, explains Atkinson.

“Where we see it is with contractors: for example, somebody who focuses on rural airports that has tens of millions of dollars of gear and crew stationed somewhere and there is only a short window of time to get the work done—they can spend a lot of money on a pilot and a plane because being down could cost them hundreds of thousands of dollars,” Atkinson says. “Looking at the opportunity costs is a great generalization that can be applied to industrial sectors.”

Vanessa Thompson of 40-Mile Air, which primarily provides backcountry hunting and fishing charters in addition to survey work for miners and the Alaska Department of Fish and Game, breaks down the choice another way.

“They would need to be flying 300-plus hours a year for it to be cost effective to own their own plane,” she says. “And if they had to hire a pilot to fly their plane, that would increase their costs tremendously.”

Northern Alaska Tour Company took the plunge and vertically integrated the business when they hit the point at which they were unable to continue to grow the tourism side of their business because they couldn’t procure enough charter seats.

“So in order to maintain our ability to grow, we kind of had to vertically get into aviation. And that’s not easy. We had a couple Chieftains, then we got three, and then a couple more,” Atkinson says. The company now owns seventeen Chieftain aircraft.

Business owners that decided to move forward with purchasing planes can either shop for new planes or pre-owned ones, depending on the company’s needs and budget.

“If you want to buy a new airplane of some kind, usually you’re working with the manufacturer,” Hubbard says. “They have locations through which they are selling their airplanes. That’s true in the case of jets and turboprops and also just piston airplanes.”

For those who opt for a pre-owned airplane, they need to research and settle on a broker who specializes in the kind of airplanes the business owner is looking for.

“Sort of like if you’re going to buy a pre-owned car—you might want to go to a dealer who specializes in that car because they know all the particulars. And, in the case of brokers, they also often know of people who own that type of airplane at the moment and might be looking to sell or maybe are in the process of selling it,” Hubbard says.

The cost range for airplanes is enormous, with the divide between single engine piston aircraft to long-range jets in the millions of dollars.

“The range among airplane types is very profound, even within a single type, depending on what features you have: what avionics are on it, what cabin connectivity systems are in there, and other features in the cabin,” Hubbard says.

However, no matter what type of plane or how a company pursues air transport in Alaska, the rural and rugged nature of the state makes airplanes an essential part of many businesses growth plans.

“There are so many places that people need to go and want to go—to see and experience and live and extract resources—and there’s no ground infrastructure,” Atkinson says.

That said, Atkinson notes that owning a plane is not an easy task, which is why so many companies and agencies rely on charter.

“You’ve got to have margins and wherewithal to deal with owning a plane,” Atkinson says. “Owning a plane is tough; it’s lower margin.”