Airline Types - Scheduled Versus Charter

Last updated: 2001-04-23

It is sometimes confusing as to whether a flight is scheduled or charter, especially as many charter flights operate to a schedule and the seating on some scheduled flights is as cramped as charter flights. Here, then, is a brief explanation of the situation.

Seats on scheduled flights are sold by the airline and often through travel agents as well, whereas charter seats are never sold by the airline - they are always sold by travel firms (almost always tour operators) who have allocations of seats on the flight. The operator may also sell through travel agents. It is noteworthy that it is the operators who do most of the marketing for charter flights, so that charter airlines typically have small marketing budgets whereas scheduled airlines usually have much larger marketing budgets.

Legally, it is the operator which bears the responsibilty for the performance of the charter airline, whereas scheduled airlines bear responsibility for their flights. In the UK, the seller of charter seats must hold a licence - an ATOL granted by the Civil Aviation Authority (CAA) - or be the agent of an ATOL holder. The ATOL system also provides a bond for consumer protection.

Seats, especially on charter flights, are often bundled in a holiday package, though the operator may also have a seat-only business or offer late, seat-only deals if seats are available from unsold holidays. The reason, incidentally, why these late, seat-only charter deals are available is due to the very different ways that seats are sold. The operators who take allocations of seats on a flight do so under different contracts for scheduled and charter airlines. For scheduled, any unsold seats are usually returned to the airline several weeks before departure but, for charter, the operator pays for the allocation regardless of whether he can fill the seats. This is why an operator will often sell at cheap rates any unsold charter seats from his allocation which he reckons he won't sell through the usual channels.

So why, I hear you say, don't scheduled airlines do the same with those empty seats close to departure? The reasons are too complex for a full explanation here, but reflect the fact that distribution systems differ considerably because scheduled airlines largely take the risks for their flights whereas tour operators largely take the risks for their charter flights. A scheduled airline often needs to employ revenue management techniques to help make money on every flight, which typically leads to the setting of convoluted fares which encourage decent bookings and payment in advance of departure and charging the most for late bookers. So, contrary to what some people think, walk-up fares are often the highest because the airlines know that late arrivals without a ticket are often the most desperate to get onto a flight.

There is no particular reason to believe that there is any correlation between the safety records of airlines and whether they are are scheduled or charter.

In most cases, the practical differences for the customer are:

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Copyright © 1999, 2000, 2001, 2002 Roger Chung-Wee
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