Well said, SussexBroker.
Avinode has a lot to answer for. They have created a small army of mini-brokers working from the breakfast bar in their kitchen (also known as BBBs – breakfast bar brokers). Generally, there is nothing wrong with that. All businesses have to start somewhere. The problem is that most of these mini-brokers have had little or no formal business education. If you want to run your own business you need formal business training or at least a sound understanding of accounting, which many of these guys and gals lack They don’t understand the difference between cash flow and profit, and need outside accountants to tell them at the end of the year whether or not they have made any money ! If you want to be in business, you need an MBA or accountancy qualification. If this is too much to ask, go work for someone else.
The company I work for keeps a close eye on all these mini-brokers. Financial accounts are freely available from Companies House and make an invaluable marketing tool when selling air charter. If someone tells you that XYZ broker has undercut your price, send the client a copy of XYZ’s accounts. Chances are, they have made a loss the previous year and need the client’s money to pay their next mortgage payment.
Once you have educated the client that this industry is largely unregulated, he will send his money to the company that has the financial strength to deliver.
Personally I think all brokers should be regulated to protect clients’ money. At the very least they should have a mini or trade ATOL, whether they need it or not. At least the client would be satisfied that the broker meets the stringent financial requirements of the CAA. After all, operators have to meet CAA requirements, so why exclude brokers ?
Many of our clients put up as much as a million pounds for their flight programmes, so they prefer to deal with brokers who have their mortgages covered (or better still, companies who don’t have mortgages!!)