Oxygen 4

[SimonD678]

Apologies for the broker based question but these guys are reporting 15mn GBP turnover in their second year from a standing start, which is extremely high.

Does anyone out there know the background? COuld it be a rename of a previous company or existing brokers at other large companies breaking away and taking their clients with them?

Thanks for any info

[FBOman]

The latter.

[SussexBroker]

Oxygen 4 was started in 2005 by three ex- Hunt and Palmer guys. Steven Jack (ex-Bond Aviation I think), Mark Green (also started the Aircraft Zone/Ocean Sky ball rolling) and Rod Glassford who has also made a bit of a name for himself. I know them all from BACA parties and industry functions etc... they're all quite nice guys... for brokers ;)

As a broker myself , it is a problem when staff leave they also take their clients and relationships - but it is part of deal of being a broker. That said, I keep an eye on the competition and whilst Oxygen 4 (according to their press releases) did GBP 9m in year 1 and GBP 16m in year 2, Hunt and Palmer have had two cracking record years since Oxygen 4 started so it couldn't have impacted too much on their business. Not that many of the other "larger brokers" had the same levels of increase in business. Interesting that not many other "one man band styleee" brokers have moved on from the back bedroom image of broking. It is a shame that systems like Avinode and an air charter guide can allow any Joe Public to begin broking... it is perhaps this lack of actual and overall knowledge of the job that gives brokers a bad name.

Thoughts anyone ?

[His dudeness]

Well Simon, I´ve dealt with Mark Green and Rod Glassford whilst they were at H&P. Absolutely nice and professional guys... thats, at least IMO, why they make such a good result.
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Interesting that not many other "one man band stylee" brokers have moved on from the back bedroom image of broking. It is a shame that systems like Avinode and an air charter guide can allow any Joe Public to begin broking... it is perhaps this lack of actual and overall knowledge of the job that gives brokers a bad name.
-----
And why are they in the business anyway - cause Joe Public wants CHEAP. Or if possible, cheaper.

[SussexBroker]

You pays your money, you takes your choice. If the client wants to save £2.50 to go with a broker armed with a mobile phone and calculator with no back up in terms of providing another aircraft should an AOG occur - that is sort of client I'd prefer not to have frankly. If you want a hamburger go to Burger King, if you want fine dining go to a nice restaurant. Honestly speaking, you'll not find me dining at Burger King with clients !!!

At the end of the day, it is easy to broker aircraft with a few airline contacts and a fancy website but it is all about when things go wrong that a good broker comes into their own.

Hurrah for brokers :ok:

SB

[Phil Brockwell]

Sussexbroker,

I disagree. There are good brokers in their conservatories and there are crap ones in larger organisations.

If the guy with a mobile phone and a calculator knows what he is doing I see no disadvantage.

Some of the worst brokers in the UK are part of 5+ employee companies, as are some of the best. You are wrong to associate small with unskilled.

Phil

[SussexBroker]

Hello Phil

I concede that my previous statement was rather sweeping (and unfair) and I didn’t really get across my point properly and I apologise for that. I was not making a generalisation that smaller brokers cannot do the job, I know some smaller brokerage companies have been very successful and have a fantastic reputation… I also agree that conversely many of the large brokerage companies have some staff who have sat at the same desk for donkeys years and have become complacent – this is why some smaller (and start up) brokers have great success; offering clients a pro-active, modern approach. Look at H&P who have just re-branded their image and have become a little more funky with their literature and logo... Air Partner have bought Gold Air in a move push the Jet Card side of things and give them the perfect opportunity to rebrand and move forward both of the two "big" players have done this I guess because smaller broker recognise that tradition and old-fashionedness isn’t the way forward and longer !

We both agree that there are some very good, smaller brokerage firms but there are also some poor ones… likewise for the large firms – big isn’t always best.

Please don’t get me wrong, I am all for brokers going forward and I have massive respect for new brokerage companies that succeed and succeed by doing a good job – look for example at The Charter Company and the string subject of Oxygen 4 as new companies, they have done well by quietly and understatedly doing a good job for their clients (presumably at least according to industry gossip). One has to have respect for them for this...

The point of my first statement was as follows; there are some companies out there who have never seen a private jet but have a nice website and a bit of money to market themselves. This is the scenario to illustrate why this is a bad thing.

Scenario 1.
A broker with minimal experience, contacts and knowledge books an aircraft… said aircraft goes AOG on day of flight… some inexperienced brokers wouldn’t have resources – financially or expertly to provide another aircraft for the client. I know if it were a Centreline aircraft that had gone AOG (not that they ever do ;o) you would provide an alternative aircraft for the broker; but some airlines wouldn’t, thus leaving the broker with a problem. There is a good chance this broker may not have a credit line with many operators and therefore have a problem on the morning of the flight to arrange payment to the replacement airline. Leaving the client with the problem and the word "broker" associated with bad service...

SB

[charterguy]

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!!)

[Takeoff WAT]

Oxygen 4 may be reporting £15m in turnover but I'd be more interested in what the profit was.

£15m can enter your bank account but how much is going straight back out?

[jamesarmstrong]

10% GP reported.

charterguy - "if you want to be in business, you need an MBA or accountancy qualification" - a little limiting and shortsighted I would say.

so aside from the big players, anyone have comments on who the "better" small (er) brokers are? from an operators side it would be interesting.

[charterguy]

jamesarmstrong

What's shortsighted about having the right business qualifications ? No doubt you will tell us next that you are operating your aircraft on a PPL and with no AOC ? :O

brgds
CG

[Phil Brockwell]

Charterguy,

Really an MBA, not 20 years experience in an operator, or as a broker?

I agree with your sentiments about Avinode, it amazes me that so many brokers subscribe to a product that devalues their product so well.

It is an extremely useful tool for selling one ways or out of position aircraft.

Phil

[charterguy]

Phil

20 years experience works for me.

The trouble is that many of these 'conservatory brokers' are unlikely to have that sort of experience. If they had 20 year's experience, they should no longer be sitting in a conservatory.

I guess the MBA is a shortcut for people who haven't got 20 years to learn all aspects of running a business.

brgds
CG

[Phil Brockwell]

I think we should differentiate between the guys who have worked for the big boys and taken a lifestyle choice to look after a few clients from home, and the brokers who see an expanding market and jump in.

In the good old days (groan) brokers had contacts on both side of the supply chain, clients and operators. generating clients has never been too much of a problem with the right marketing budget, but the supply and knowledge of aircraft was more tricky. Nowadays Avinode in theory does it for you, thus my enquiry for a SVO-BQH on a Kingair this morning!!!

Phil

[charterguy]

Phil

Nowadays Avinode in theory does it for you, thus my enquiry for a SVO-BQH on a Kingair this morning!!!


I totally agree with you. Kingair might be too expensive for this trip. :=

Why note quote them the PA31 or PA34 :ok:

Regards
CG

[Phil Brockwell]

So we all agree. Experience is important for running a company. Larger company = more experience of running a business. Smaller comany = less experience required. The point is that avinode and google have made it possible for people with little or no experience to set up as a broker.

In reality the O4 chaps have the experience and as far as I know have carved out their own client base, not simply taken it from H+P. Both companies seem to be growing rapidly because they are experienced and good at what they do in a very bouyant market. Anyone who is not expanding rapidly at the moment are either not chasing new business, or have customer retention problems.

For your stats, out of the flights we do for brokers (approx 30% of our turnover) 90% comes from 4 brokers. Of the enquiries we receive 82% come from brokers who have never contracted a flight with us, most of whom have incorporation dates of 2004 onwards and generally are people who we had never heard of in the industry before.

Phil

[SussexBroker]

Well, as a broker or as an operator, or even as a internet based aircraft search site, if you are not busy at the moment you're doing something wrong. At the end of the day (presently) there is enough work to go around, brokers are happy, operators are happy - life is wonderful.

That said, this is probably why there are so many breakaway brokers and also lots of new airlines springing up...

Being the profit of doom; surely when there is downturn in the industry, which IMO could start next year, some of the smaller brokers and smaller airlines could fall by the wayside... it could be the case we see some of the breakaway brokers joining or being absorbed by the other brokers, bringing with them experience of running a business (with or without MBA!) and the clients that they have gained. It could be a good opportunity for the other brokers to cherry pick some staff that will add value to their business... Likewise the airlines could be in the same position. Not that it could be only the smaller people affected, the larger brokers and airlines with lots of overheads could also come in for a hard time - remember Chauffair or FlightTime and others alike.

Yes, years 08/09 will be an interesting time me thinks...

[Phil Brockwell]

Without stating the obvious "size isn't everything" why would a smaller operator be more likely to be culled than a larger one. I would say the absolute oposite, and the same for Brokers.

The reality is that brokers and airlines who offer a superior level of customer service will gain higher levels of profit and customer loyalty, so, in a time when customers are thin on the ground keeping the ones you have will always see you through as long as your overheads can adjust with your income.

Of the 3 brokers that I perceive to give the highest level of customer service, one is a 2 man band, one is about 20 people, and one about 60 ish.

of the 3 brokers that I perceive to have the lowest service levels, one is a 2 man band, one a 4 man band and one about 50 people.

Phil

[Greystanes]

As a end user who actually charters Aircraft I made a few enquiries earlier this year from two companies. One a large worldwide organisation and one from a small established broker. Nice visit from the sales person at the large organisation blackberry et al no reponse to our request - smaller guy lots of advice, prepared to understand what we wanted and what we actually needed, not always the same. Suffice to say since April the smaller broker has been operating the charter for us with great success.

[Phil Brockwell]

Obviously it would not be appropriate to mention the one that you didn't use, but do you mind me asking who you did use?

[Grecian2000]

At the risk of being boring I can answer the original question.
Oxygen 4 have cracked the Russian exec jet charter market, hence the huge turnover and earnings growth. :)

[The Oxygen Boys]

Well, we’re sincerely delighted that Oxygen 4 have made a move into the first page of Pprune again after so much gossip and rumour about us in recent weeks.
We thought it was about time that gave people the facts rather than hearsay... Oxygen 4 was indeed started by Mark Green, Rod Glassford and Steven Jack... we now have 12 staff and are actively looking for a couple more experienced people to strengthen our team.
James Armstrong you also have the GP reported correctly. Also, the figures given by Sussexbroker were pretty accurate, we’re impressed and flattered that you have good information. Also the info on Hunt and Palmer were pretty fair to say too. For the record, we are all still good friends with all the Hunt and Palmer guys, they are such a great company and our inception has had little impact on their business. Therefore thoughts that we pillaged the H&P database are rather unfounded !!!
Grecian2000 though; you may be surprised to learn that we are not a one trick pony, we are indeed very well connected with the Russian market but it does only account for 50% of our business... there are many other markets that are strong presently and we have jumped on this business too.
We take this opportunity to thank all of the airline partners that have worked with us...
Check out the third year figures coming soon :o) Here is to the future ;o)
The Oxygen Boys

[charterguy]

Oxygen Guys

One thing you didn't explain is how you managed to come up with this really weird company name. Sounds like a mobile phone company or medevac service. You must have been smoking weed (starved of oxygen?) when you decided on the name ? :D Explain.

[The Oxygen Boys]

Well, anyone who knows us will probably understand that the name Oxygen 4 was decided after much Guinness had been consumed in the local :) You should have heard the names we were coming up with before we'd had a beer !!!

Actually, the very reason that we decided on a quirky name was purely so that people would ask that very question and would remember it.

I guess it works eh ? ;)

We think it is quite cool having a name that bears no relevence to what we do...

Not sure what everyone else thinks; but one thing that we have noticed that many of the new airlines or those bringing new aircraft types to their AOC are actually giving the "old school" a run for their money... not so much in terms of price but certainly in terms of service, they're raising the bar and this is such a good thing for our industry. These new companies on the block are trying hard to impress and honestly they're doing a great job ! Anyone else got any thoughts on that ?

[Phil Brockwell]

It's got to be Steven writing these, the other 2 can't spell that well :E



Phil

[The Oxygen Boys]

Dnot konw waht yuo maen Fill ?

[Corp Boy]

First of all sorry to semi hijack the thread but as we seem to have a lot of brokers on this particular one I thought I would ask the question.
I have been thinking of trading jobs within the industry.I Have spent the last several years working in large corporate ops center and am currently head of Ops.I have been in aviation for 13 years and have very good knowledge of the industry.
I was wondering what the details of brokering are: is it salary or commision and rough guide of how much,Mon-Fri or shift,do you get to meet your clients and go to trade shows like ebace and nbaa.If you guys find it enjoyable and rewarding.etc.
Many thanks
Neil