Air charter brokers

[nanocas]

Dear all, I hope I have placed this in the right forum.
I work for a small family run operator who has never had a working relationship with a broker. Now we would like to approach one but when I contacted a certain broker in the UK, they were so rude. Eventually they asked to send in all info on the company. Fine. But when I mentioned on what fees we would be working on, this was the reply:
"We never disclose fees as they are unique to each booking and private to us!
No broker will ever disclose this!"
Is this normal? I thought an operator (we) had to discount this amount (fee) to the broker so that the end price of a charter is the same to direct client or broker. How does it work then???
Thank you all!

[No RYR for me]

straight forward: the broker uses smoke and mirrors to ensure you and the end customer have no idea what the real price is. Great business :rolleyes:

For the same reason it doesnt matter to most brokers that you invest more in pilottraining, pay a normal wage to full time pilots and have a real company supporting you. They will only look at one thing: price... They are the reason that we have had crappy companies like 24 jets etc exist.... :mad:

RANT over ;)

[Set 1013]

10 years a go when I was a charter broker the standard commission rate was 7.5%.

[nanocas]

Thank you all for the replies!
So I understand it is not a straightforward business then? I dont understand how we, as operators, cannot ask what comission the broker charges us? how i am supposed to make sure the end client gets always the same price from us whether via broker or not?
This particular broker has been very very rude in their way of addressing via email... The bottom line is, if the broker is going to charge me a fee, how come they get insulted if I ask them what the fee is??:confused:

[Tinstaafl]

Because, for many, their point of view is that they're charging the end customer the fee. You're just one of many (or even alternative) service providers in the package they supply to the customer. Do you tell your customers what your markup is?

[Deeko01]

I think perhaps it's a breakdown in communication with the Broker, at the end of the day as an Operator you have to give the broker a Net price for you to do the job which allows for all costs to be covered and some profit on top, the broker then gives the end user the price with his commission on top.

Who cares if he/she puts 10 or 20% on top, if you got the trip then perfect.

Your posts make things sound overly complicated when it doesn't need to be which is why in think there is a communication/translation breakdown.

Cheers
D

[HS-125]

I agree with Deek.

All of our customers (whether a broker or a direct client) get a NET price, if they want to put commission on top then that's there responsibility.

[Spunky Monkey]

Its beneficial to know what the brokers are adding on. As you don't want to be linked to a broker that is charging 30% margin when everyone else is charging 20% and your aircraft is sitting on the deck.

Why would brokers produce glossy brochures and spangly websites and not disclose to the operator what their intended margin is.

There are some very good brokers out there, however there are some truly poor ones, just like operators.

If you are not getting a good feeling from a broker, then walk away. There are loads of them out there.

PM if you want a couple of names of people I trust.

[Travelman Africa]

Why should a broker declare their fee to an operator?

Does an operator declare how much profit they make on every flight?

Now if you want to enter into an exclusive marketing arrangement with a broker then that would be different..............

[ChiefT]

Easiest way:
Give the broker a price as you do with all other clients. In the end all parties involved should be happy. The end user will be happy if he agrees in a price, the operator is happy if he get's a good price and the broker is happy if he gets his margin, no matter how high the margin is.

If you want to get into a fixed marketing agreement with a broker, you should negotiate a fixed fee or margin - that's clear and OK. But then you should consider, that this is not a one-way-street.

Basically I also think it is funny, that everybody expects from a broker to publish his margin. Do you ask that your car dealer, hotel, supermarket, taxi driver etc too? Or does your maintenance provider, fuel supplier, caterer, airport tell you their margins.

It comes back where I've started: If the price is right, everybody can be happy.

[No RYR for me]

As you don't want to be linked to a broker that is charging 30% margin when everyone else is charging 20% and your aircraft is sitting on the deck.

Why link to one broker? That is like a hooker pimp relation! :rolleyes: Just make your capacity available to as many as possible and as mentioned at net rates :8

[LAS1997]

I have found that brokers tend to want net prices; so we always quote net; that way they can fight it out amongst themselves. There are good brokers and bad brokers; but I have always treated them with respect. Never side with one broker; not fair for the others and frankly pointless; no broker will ever show you loyalty either.

[OhNoCB]

Company does some brokerage. Not the main source of income by a long shot so it's done fairly quick and dirty.

We ask operator for a quote as if we are Mr Bloggs and then we add 10%.

[flynowpaylater]

Basically I also think it is funny, that everybody expects from a broker to publish his margin. Do you ask that your car dealer, hotel, supermarket, taxi driver etc too? Or does your maintenance provider, fuel supplier, caterer, airport tell you their margins.

Chief -
Car Dealer - buys his own stock and takes the commercial risk
Hotel - They own the hotel, employ the staff and take the commercial risk
Super market - Building, staff, stock - commercial risk
Taxi Driver - owns or rents his taxi, and takes the commercial risk
In fact all of your expamples own their own assets and take the commercial risk. Essentially, its their stock or service.

Brokers / agents sell other peoples stock or service. The brokers service is infact their ability to bring end user to supplier. All people want to know is what that service costs. Pretty normal scenario I would say.

Better examples would be :
Estate agent - Full disclosure / regulated
Travel Agent - Full disclosure / regulated
Insurance broker - Full disclosure / regulated
Stock broker - Full disclosure / regulated

It's about time that brokers woke up and get their act together with this or they will be subject to regulatory compliance and forced to go open book...as per the above noble trades (EASA are looking at this as are the FAA) Add to this that the average bizjet charterer is becoming more and more savvy and new innovations in communication technology making it far easier to book direct.

Isn't a bit mad that anyone can start a small company, call themselves Private Jet flights 4U Ltd, and sell a $200k charter without any regulation, industry oversight or qualification, yet you can't sell a £50 seat on scheduled flight without an ATOL licence, having given financial assurances to the regulator.

Is that coffee I smell?

[gaunty]

There are serious negative regulatory and liability issues in letting a broker get between you the certificate holder and the ultimate customer.

It took the Platinum accident at Teterboro some years ago to get back to The FAA enforcing one of their regulations regarding "holding out" as an operator.

Now brokers are required to reveal the operator, there AOC and ALL their DBA's to the client.

Brokers have a role but it must be transparent to he user.

I goes on but as an operator of several heavies I used to quote the brokers the same price as the direct enquiry. It is their problem to agree their fee for whatever value add and there often can be to the client.

You need to be very careful how and where you sit in the transaction.

If the merde hits the fan, and it did in the Platinum case, one or more of the parties will be spending time in the big house.

[zolfen]

Chief -
Car Dealer - buys his own stock and takes the commercial risk
Hotel - They own the hotel, employ the staff and take the commercial risk
Super market - Building, staff, stock - commercial risk
Taxi Driver - owns or rents his taxi, and takes the commercial risk
In fact all of your expamples own their own assets and take the commercial risk. Essentially, its their stock or service.


Flynowpaylater:
Good examples!
You miss major part of the (good) Brokers Story, i.e. if Broker undergoes a legal contract with Operator and legal contract with final user, there is plenty of risk for the Broker!

[FrankR]

I'm often mystified by PPRuNe'rs. Such smart, worldly guys, who for some reason often rail about how life SHOULD be. Why not accept that brokers make what they make, and it's nonya business.

So if you are a management company owner, (or a savvy pilot), find ALL the brokers you can, take each of them for a pint and dinner, and fight over the bill, and see how much business you can get.

Sniff them over, call your mates and check them twice, you know that they're naughty, so get cash up front.

I believe this is called "The American Way"

FR

[flynowpaylater]

FrankR - If its none of the operator business, the broker won't mind that the end client takes a busniess card from the operator then? Afterall, it's nonya buisness right?

Brokers are very protective of what they charge as it is currently hidden to both the operator (who's service you are representing) and the end client (who's money you're taking). Ultimately, not a sustainable situation.

[Expressflight]

It would appear that things have changed considerably since I was in the brokerage business 20 years ago.

It was normal at that time to be given a gross price by the operator with a broker's commission of 5% for heavy metal and 7.5% for the lighter stuff. We never loaded the price; not necessarily from a sense of altruism but the possibility the client might get a quote direct from the operator and be unhappy. For one particularly large contract client we rebated the gross price by a couple of percent. That system worked well for us and, I like to think, for our clients and the operators. I wouldn't have liked a system where we were quoted net prices by the operators as seems to be the case nowadays reading this thread.

For our largest freight client the contract stipulated that one of our staff attend the loading and departure, wherever in Europe that may be. I recall that one of the big London brokers often attended local departures as well. Does anybody still do that I wonder?

[vikingar]

Things have changed. See FlyVictor who publish a list of over 100 operators with 500 aircraft on their platform with addresses telephone numbers and links. We (declared interest) have been offering a B to C platform for over 2 years and completed nearly 600 flights. At quotation stage the operator, actual aircraft with tail number and actual pictures are shown to the potential flyer. The margin is declared at 5% for online bookings and 10% for a concierge service. A complete transparent online booking service backed by a member services team.

[FrankR]

Hello flynowpaylater (yawn)... quite often, the pilots and CSRs will all be handing the clients their personal and company business cards. Clients all know this, and know full well that they could have called the operator directly. After the first time that the operator says "we don't have a G550. but our CL601 is just as good", clients make a mental note to pay the extra and have a broker find the plane they want.

And sure, an operator can get into the selling business, and a broker can work deals, but in the end, everyone is in it for their own gain. Why is this so hard to figure out?

FR

[flynowpaylater]

Frank - Guessing you're a broker?

You are totally right. There is a definite and valuable role that brokers play in the market. The trouble is the current system of many unregulated and unqualified people representing the operators product and service without the knowledge of what's on offer. What's wrong with people (end client and operator) knowing what the broker charges for their service? and having the reassurance that their broker is suitably qualified and experienced and of course fit proper to be conducting the transaction. It's just normal.:ugh: Why the secret and hidden charge? No wonder people inherently don't trust brokers.

Good brokers are great to deal with. but why are we in a multi billion industry where there is no guideline for the user of a broker as to their credentials?

[His dudeness]

Good brokers are great to deal with. but why are we in a multi billion industry where there is no guideline for the user of a broker as to their credentials?

Why should it be different in our business then in any other (or lets say almost all) businesses ?

Why do you think that common sense should be replaced by regulation ? Way to many things are regulated already....

Any sane person should understand that if they employ a middle man, that they then have to pay for this service. Wether the service is good or not is a different question, but if you give your car to inspection you have to thrust them as well, don´t you ? And if the service is bad, then you vote with your feet, don´t you ?

BTW, I´m not a broker, but I worked with a few of them in the past. I always saw the 5% we gave em as the equivalent of what we would have to spent for PR. And often we had british brokers using us for british clients, a clientel we would not easily have access to.

[flynowpaylater]

Hi Dude : Yep, get that but the 5% you refer to is more like 15% + but that is not the issue. The issue is that people don't know what the service is costing.

Your reference to the car inspection. You know what the garage has charged and then you can decide on whether it was value for money. You wouldn't use an agent to get your car serviced, you go direct to the garage. The garage is the performing party in this example. Much as the airline is the performing party on a charter.

My whole point is that operators and end clients should know what the broker is charging for his/her service. The broker should not fear this. This is adding integrity to the profession and raising the entry requirements and standards by way of professional qualification and approvals. Everyone wins......except the dodgy broker.

FNPL

[zolfen]

Ever heard about the expression "Free Market"?

Let the Final Clients judge weather the Service offered by a Broker is good or not!

If it was good, he will return to that Broker, if not he lost a Client and potential for a longer Business relation!!!

And a final comment on Operators view in this story:

They should perhaps choose Brokers not on the basis how much they charge final Clients but perhaps on different reasons/Parameters (there are plenty of them). Might be good thinking about that!

[michaeljackson12345]

Hello and good day aviation enthusiasts,

I was reading through some of these forum posts and saw some interesting, but old threads about charter brokers. Therefore I'd like to start a new conversation and hope, that some people with valuable knowledge can help me.
I work in the business aviation in Europe and would like to get into the Charter broker business.

With all the new apps and online programs like Avinode and Fly Victor... what sort of abilities do you need to become a good broker in the business aviation and how do you start?
Are there any companies you can work from at home maybe? The aviation knowledge, be it aircraft, ground ops, ATC routings, slots and the like are nothing new for me.
It seems like nobody wants to share information in this business segment, which I can totally understand. Nevertheless I'd be very glad if I could get some answers.

Thank you in advance,
Michael