A charter airline, also sometimes referred to as an air taxi, operates aircraft on a charter basis, that is flights that take place outside normal schedules, by a hiring arrangement with a particular customer. These flights are often more expensive, but allow the customer the convenience of flying at a more suitable time. Most scheduled airline companies also operate charter flights but are not considered or classified as charter airlines.
In the context of mass tourism, charter flights have acquired the more specific meaning of a flight whose sole function is to transport holidaymakers to tourist destinations. Such charter flights are contrasted with scheduled flights, but they do in fact operate to regular, published schedules. However, tickets are not sold directly by the charter airline to the passengers, but by holiday companies who have chartered the flight (sometimes in a consortium with other companies).
Although charter airlines typically carry passengers who have booked individually or as small groups to beach resorts, historic towns, or cities where a cruise ship is awaiting them, sometimes an aircraft will be chartered by a single group such as members of a company, a sports team, or the military.
Many charter flights are sold as part of a package holiday in which the price paid includes flights, accommodation and other services. At one time this was a legal requirement (or one enforced by the airlines' cartel), but this is no longer the case, and so-called "flight-only packages" can be bought by those who merely want to travel to the destination. Such packages are frequently cheaper than regular schedule airline fares. Furthermore charter airlines frequently operate on routes, or to airports, where there is no scheduled service. Much of the traffic through small and medium sized airports in the United Kingdom consists of charter flights, and the survival of these airports often depends on the airline landing fee they get from the charter companies.
Many airlines operating regular scheduled services (i.e., for which tickets are sold directly to passengers) have set up charter divisions, though these have not always proved competitive with the specialist charter companies. In addition, some cargo airlines occasionally carry a few charter passengers on their jets. Conversely, some charter airlines have branched out into scheduled services when their charter operations have uncovered a need or a market niche.
The economics of charter flights demand that the flights operate on the basis of near 100% seat occupancy.
The airlines operating charter flights, and the holiday companies who are the initial purchasers of seats on them, have acquired an unhealthy reputation for financial instability. There have been a number of high-profile cases where holiday-makers, mostly with European charters, have had their arrangements cancelled at short notice (and sometimes lost the substantial sums they have paid for package holidays), or have been left stranded at their destinations, by the collapse of the airline or holiday company. A number of compulsory insurance and bond arrangements have been put in place to minimize at least the financial risk to the public from such events.
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