Operator Cancellations

[robash]

Booking flights as supplemental lift due to our bird being in maintenance and have two brokers - 1 in UK, 1 in Europe - asking us to sign up to 20-25% cancellation terms upon booking, despite the flights not being for 3 months...

What are your views on this? thought 10% upon booking was generally accepted terms?? is the broker taking the extra?

[Phil Brockwell]

25% upon booking is standard, just checked 8 different operators contracts and all 25% going up to 100% for a no show.

Phil

[robash]

Thanks Phil - we've done half a dozen trips or so in the last 6 months, not through these brokers but direct with UK operators including TAG, London Exec, Gama and Manahattan and they were all 10% upon signing....just wondered.

[Phil Brockwell]

Robash,

Bear in mind that this only sets up the worst case scenario, normally there is a deal to be done on cancellations.

Phil

[Deeko01]

Our Company is 10% on signing contract.

[V12]

Some US operators now write 100% canx from 15 days out into every contract as standard; given they don't have any DOC's to bear, they make far more contribution NOT flying than doing the job in the first place.

[AircraftOperations]

Any broker is going to play it safe and be the same or higher than the operator whose aircraft they are selling.

Depends if the broker has standard terms across the board, or amends them depending on which operator they have brokered.

[Birdee]

Agreed with AircraftOperations. IF a broker has standard terms across the board then they are likely to be high to cover their backs. They will be dealing with a lot of operators with all different canx terms. Some high some low.

Canx terms can always be negotiated if cancelled in a reasonable amount of time.

[Phil Brockwell]

As an operator we are pretty flexible, but nowadays with Avinode et al there is a lot more tagging one flight onto another, without cover on the cancellations you may commit to a flight that could cost thousands in extra positioning, then being left with a choice to lose money or dump the flight....neither would win you a lot of freinds.

[robash]

Thanks to all - its now clear that it is the operators terms being passed on by the broker (who we use a lot), not the broker setting them. We all know canx terms are 'flexible' but it just raised questions when we had never seen anything more than 10% on any charter we had done before - but its now clear.

On the topic of tagging on other flights and not wanting to be exposed - having searched through old posts on here, there’s some interesting thoughts by operators who price the 'empty' leg at mid way between the cost of performing that leg in isolation and the true sale of the leg in isolation. Therefore meaning that should the first trip cancel, the operator still covers their costs and the customer still sees a discount from the 'normal' sale price of the second trip.

[Phil Brockwell]

Robash,

That's how we used to price up one ways. Nowadays we tend to price very keenly on one ways that are condusive to finding return legs. In effect we carry the risk instead of all the risk being on the primary booker, alternatively we could charge more for the primary booker and almost give away the return.


Phil

[robash]

thanks Phil - I suppose its a case of finding a happy medium.

[Phil Brockwell]

Just as a narrative, had a cancellation today, 1 months notice, no flights relying on it, no charge. As I said, it is only a backstop.