Charter Broker fees

[Cap Loko]

I would like to learn how much a broker adds to the price of a typical charter on the European market. Anyone knowledgeable would like to share some ballpark figures please?

Thanks in advance.

[no-rvsm]

as far as i know it is something btwn 0-10%. Depending on route, type of a/c and if the client is new so they try to get the client just offering prices without ciômmission. 1 1/2 yrs ago +/- 10% was the rule but time change...

[eckhard]

Used to be 7.5% when I was a lad (looks whistfully into the distance whilst lighting up his pipe................)

[No RYR for me]

Between 5 to 10% with the occaisional desperate 0%

The corporate travel departments of a number of larger companies now subscribe to charterX.com or Avinode.com themselves and do the brokers work inhouse. :ooh:

[Cap Loko]

Those numbers seem consistent, thanks a lot for sharing your insight guys.

'No RYR for me' thanks, I will check those sites.

[Call Sign Maverick]

if everyone stays between 7.5 - 10 % we will keep the broker business going.
people who do it for 0% ruin the business

[Privet]

Well said:ok:

[Chidken Sangwich]

Can't agree with those figures quoted above anymore.

Its more like the brokers offering with 0% included and hammering the operators and airlines down on their prices and making their commission from them.

Will all end in tears when there's hardly any operators left...:ugh:

[Uncle Wiggily]

I am curious as to why the potential client does not simply go to the operator directly instead of going through a broker? Does the broker contract state his/her mark-up in price or does the contract simply quote a price and does not show the mark-up in fees?

It also seems that operators are already operating with no margin, so how can the broker seriously hammer out a below margin price?

Thanks.
UW

[Call Sign Maverick]

becase an owner has access to a few aircraft and a broker 100's, so the broker can find aircraft that are closer to a departure point therefore reducing the cost for positioning.
If a operater is based in Paris and the fight starts in Nice then a broker will find aircraft in or near Nice. therefore saving money for the client.
then broker fee should be less that the position fee.

[asdf1234]

10% would be nice! Let's not forget it is what the broker adds in terms of value to the deal that dictates the rate. Finding an aircraft at short notice to service a number of legs to out of the way airfields will earn you more than sourcing 4 seats from Biggin Hill to Paris. Agree however that any broker charging 0% just to retain the business puts the whole market in jeopardy. As do charter operators running flights at cost or less. It is our business/market/life so we all need to look after it!!!!

[Cap Loko]

If there are brokers who continue to charge 0%, they would run out of business themselves too, wouldn't they?

[Uncle Wiggily]

Hi,

Is there anybody out there who has or is using the Avinode or CharterX software? What is your opinion?

Thanks:ok:

[Miles Magister]

This is always a tricky management decision.

Although not managing any more, when I did through good and bad times I always resolutely stuck to my prices NEVER offering the individual customer prices which would undercut the brokers. The same gross price to all. Individual customers come and go but brokers are there for the long term if you build your brand.

It is such a basic principle of business that you need to establish your brand value with your long term customers, in this case the brokers. You will learn the hard way that in this business if you look after your brokers you will achieve longevity, if you discount to passing individuals you will pass with them.

A fool and his bags are easilly separated, never move home for a private owner etc etc.....

Best wishes to all ye brokers. I am not one but have been kept afloat by them when individual customers deserted with their sinking business.

MM

[MarcoT]

The reputable brokers seem to charge between 5 and 10%

I've noticed the bedroom brokers getting greedy and charging quite a bit more, I've seen 30%. I don't know how they are winning business though....

[SussexBroker]

A simple question from someone about brokers and all the operators get on their high horses - love it. If you are an operator, you are doing nothing except biting the hand that feeds “some” of your business. There are few brokers that are working with stupid low percentages and this is indeed harming the market for the brokers, however, with it being a more competitive market, it stands to reason that brokers will have to work on a lower percentage in order to continue winning business for the operators.

If we are broker bashing, we can also make the same note for operators, it is noticeable the in the past 12-18 months it is operators that have been reducing their prices without the intervention of a broker ! If airlines are stupid enough to operate flights for a loss, then that is also harming the industry not to mention their wallets. Let’s face it, at the end of the day it is operators who decide the market rate because they have the product and Cap Loko is exactly right, brokers cannot work on a 0% for the same reasons !!!

Regarding MarcoT’s post, it is not a case that big brokers work for less and smaller brokers rip people off or even vice-versa… a fair percentage is indeed between 5-10% and if a broker can make more by procuring a price that is below “market rate” then they will – this is NOT ripping off the client… I mean I would ask any operator if you have a flight from A-B sold at full rate and a “direct customer” called and booked the empty sector do you give it to him for next to nothing ? I doubt that very much, so are you “ripping off the client” ??? I also doubt you’d agree with that either !!!

A good broker’s job is to spot an opportunity to make a higher percentage whilst maintaining their duty of care for their supply and client; for if the supply runs out, we’re all going hungry and if the clients gets ripped off the same thing happens !

I find it amusing that operators bash brokers and yet it is rare to see a broker bashing an operator, I think operators need to be slightly more respectful of brokers and work with us rather than a “them and us” attitude which frankly is detrimental to industry - I think it is fair to say that the markets are coming back and this will be good for broker and operators alike and we should all work together, there is room here in this industry for brokers and operators to live and work in harmony !

[Uncle Wiggily]

SussexBroker: I appreciate your post. Very good points. I sent you a PM. Thanks.:ok:

[Try Star]

Sensible evaluation SussexBroker - I would add that it is a brokers role and therefore value, to offer realistic evaluation of the operators being offered and make sure that any prices are offered apples for apples. If the client is not aware of the potential pitfalls of certain operators or conditions it is up to us to make them aware - operators directly are not always going to be keen to make a direct customer aware of their industry reputation

It is a trust relationship between broker and client that can be replicated between operator and client, if the client does not need access to varying flight profiles a local operator can assume this role without the need of a broker commission but that relationship comes at a price

The percentage depends on the value added to the process so should vary accordingly


:=
Cos it's strange, isn't it. You stand in the middle of a library and go 'Aaaaaagghhh!!' and everyone just stares at you. But you do the same thing on an aeroplane, and everyone joins in

[MAXTHRUSTV1]

Where do charter broker companies advertise or attract customers? I have never seen Vista jet or Air partner etc ever advertise so how do they generate business and build client lists?

[Alphabet soup]

largely referrals from existing clients.
Rome wasnt built in a day....... an advert isn't going to make people use one broker or operator over another. Good service generates referrals and new business.

[learjet50]

Gentleman/Ladies

Could I just let you all have my views on Charter Broker Fees.

I have not been in the business for 2 Years so my views/comments may be a little archaic .

I worked as I am sure some of you will know for Northern Executive Aviation at Manchester (UP NORTH).

When the company was sold to Ocean Sky in 2008 it had become the Oldest remaining Charter Company in the UK having been formed by David Antrobus in 1962.

I worked for them from 1972 to 2008 so I reckon I know something about what I say .


We had dealing with brokers from the start of my employment and I Can say there are some very reputable brokers out there who have been around since I started (Probably only 6-7) That I would class as reputable.

When we were asked for a Quote we always gave the brokers the same price there were no favourites we worked with them all.

If a Gross Price was £10 000 this price was quoted to all the brokers and always included 7,5 % Commision.


If the client rang direct for the same Quote they were quoted the same price i e £10 000. NO DISCOUNT

This then gave the brokers the chance to deal with the client direct and still be able to get 7,5 % comision from ourselves.

If they choose to cut there commision to 5 % in order to give there client a lower price and get the business so be it but our final bill to the Broker would be £10 000 less 7.5% commison

In the latter years there were many Front Room Brokers started operated from there Front Room(They were virtually all ex People who had work for a Large broker and thought they could run off and take some of the Clients)
We know who they were/are .

These are the people who ruin the Large brokers reputation by Ducking and diving and in the end upset both the clients and the Operators and they normally end in tears or selling Ice Cream on a Beach or in Re-Hab somewhere

On the other side of the coin some operators offer net prices No commision to brokers to everbody who rings up for the price.

These really Piss the Brokers off because they have no or little chance of getting the job if the Customer rings the operator direct.

I Could name you all the Brokers I would trust/have Trusted over the years but I wont but they know me and I know them some lovely people work for these Brokers and I have had the privalidge to work with them over the years.

We have all had our Tears and Tantrums with each other but a decent operator /Broker can work things out amicably with each other.


I did enjoy my years in the business but when I see whats giong on at the moment I would not let some of the current operators Ride my Bike.

The good brokers will always remain the Front room Brokers will come and go Regretfully its who they upset on the way.


Anyhow I have had my rant and look forward to the good Brokers buying me a pint next Time I see them


Regards to all the good people out there


Gerry O Neill

[handflown]

Air Partner are selling block hours at a rate of circa £4700 p/h for a light jet. Even with positioning back the same day this is greatly overpriced.

Certainly more than the 5-10% quoted here!!!!

[smukke]

Handflown - the price you are quoting there is a Jet card rate, which is completely different to ad-hoc charter. They are different products which in turn attract different costs.
Sometimes a company will make more than 10% on a Jet card trip and sometimes they will lose money on a Jet card trip so to look at the hourly rate alone is not a clear idea of the margin.

[handflown]

Smukke......I Know this is the Jet Card rate.

This is a thread about broker fee's, why not talk about a different "product" as you put it.

Its still a broker purchasing the charter of an aircraft for a client. It is just sold differently with a fixed fee.

I am not knocking it. If a customer wants a fixed rate and the broker has to charge a designated hourly fee to cover all costs then great.

Don't be so quick to judge I understand the industry as well. Brokers can charge what they want and I don't have a problem with it.

[Charter JAROPS 1]

http://www.pprune.org/biz-jets-ag-flying-ga-etc/390230-charter-brokers-when-living-without-them.html

[Cap Loko]

The amount of answers exceeded my expectations.Thanks again everyone for sharing insights and the useful links!