Charter Brokers - When living without them????
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Charter Brokers - When living without them????
Hi all,
I am so frustrated my Biz is in Central EU is down by 50 % YTD vs 2008. My times seem so be over and I donīt see me in the favour earning enough money to survive.
I have two brandnew CJ3 adapted to my local market needs. But since Feb the brokers entered my market and ruined my local business. I do not really know what they did - now more CJs entered my market (partly based their ac here) and the broker is now the middleman between me and my fomer client and there are a lot of ac from larger operators (one big Cessna operator from Vienna) stating a the subsitutes and dumping prices. I discussed this issue several times with broker and the new operator but he , the broker still earns nearly 20% courtage....I now only generate cash to survive but the market is destroyed.
I really do not know how this works, as many AC have to be positioned here...the end customer I guess gets a good price because the larger operator and the broker have a contract with eachother.
I know that I have a much better service good connections to my FBO but and stating a fair price..........
How to get away from the broker and out of this situation...... PLS HELP ...............
I need and want my former customers back .......
I am so frustrated my Biz is in Central EU is down by 50 % YTD vs 2008. My times seem so be over and I donīt see me in the favour earning enough money to survive.
I have two brandnew CJ3 adapted to my local market needs. But since Feb the brokers entered my market and ruined my local business. I do not really know what they did - now more CJs entered my market (partly based their ac here) and the broker is now the middleman between me and my fomer client and there are a lot of ac from larger operators (one big Cessna operator from Vienna) stating a the subsitutes and dumping prices. I discussed this issue several times with broker and the new operator but he , the broker still earns nearly 20% courtage....I now only generate cash to survive but the market is destroyed.
I really do not know how this works, as many AC have to be positioned here...the end customer I guess gets a good price because the larger operator and the broker have a contract with eachother.
I know that I have a much better service good connections to my FBO but and stating a fair price..........
How to get away from the broker and out of this situation...... PLS HELP ...............
I need and want my former customers back .......
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Hi
Are you an operator and own or lease the aircraft yourselves? If so then there is unfortunately not much you can do. There are only two options that work longterm: manage aircraft owned by third parties or be a large scale fractional operator. The managing parties will be able to beat you by selling for variabel cost plus since the ownership coast is eaten by a third party is they don't take the hit..
I feel sorry for you but at the same time when you say things like:
I have a feeling that you have no clue about the business world? No offence intended but more an honest observation.. What did you do before?
To answer your question. If you own your aircraft selling them in the current market is a no go nor is flying them neither is parking...
In short there is no way out 
Are you an operator and own or lease the aircraft yourselves? If so then there is unfortunately not much you can do. There are only two options that work longterm: manage aircraft owned by third parties or be a large scale fractional operator. The managing parties will be able to beat you by selling for variabel cost plus since the ownership coast is eaten by a third party is they don't take the hit..
I feel sorry for you but at the same time when you say things like:
two brandnew CJ3 adapted to my local market needs.
brokers entered my market and ruined my local business.
I really do not know how this works
To answer your question. If you own your aircraft selling them in the current market is a no go nor is flying them neither is parking...
In short there is no way out
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Charter JAROPS1
Where are your aircraft based ? If you are based in a desirable location, subscribe to Avinode, and your aircraft can then be sold by all brokers (there are hundreds in Europe). Just google for Avinode and talk to them. If you are in a place that has little need for private jets, think about moving them somewhere else, where there is a shortage of aircraft. Most importantly, don't sit there and watch your business go under. Once you are on Avinode you can check any given route and see what other operators are charging to fly the route. Then thin about adjusting your prices if necessary. I hope the info helps.
Where are your aircraft based ? If you are based in a desirable location, subscribe to Avinode, and your aircraft can then be sold by all brokers (there are hundreds in Europe). Just google for Avinode and talk to them. If you are in a place that has little need for private jets, think about moving them somewhere else, where there is a shortage of aircraft. Most importantly, don't sit there and watch your business go under. Once you are on Avinode you can check any given route and see what other operators are charging to fly the route. Then thin about adjusting your prices if necessary. I hope the info helps.
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We have a charter broker operation and I can't agree with all you say about brokers because we do add value to the business by providing an operator with routes to market thay may not have thought about and an increasing awareness of their product within certain niche markets.
That said I do feel that 20% is an outrageously high margin for the local broker. For the operator/broker relationship to work both must accept that they need the other in order to exist and that as a result both must earn a reward for the service they offer. If one is taking all the reward to the detriment of the other then the market will eventaully fail.
So what to do? (I assume that is the question behind your post). I suggest fighting back by finding your own broker with knowledge of your local market. Agree with them a set rate per hour that gives you a reasonable return on your investment. To incentivise them agree that any hours sold in excess of a pre-determined monthly rate will lead to the excess hours being charged at a slightly lower rate. Agree that the broker cannot over-price your product. It would be sensible that during this economic downturn that the profit margin for the broker reflects the level of demand. Agree what this profit will be beforehand and agree open book accounting. Finally agree that the broker will have first call upon your fleet. And agree this over the medium term - do not see it as a short term measure to get you out of the recession. If you commit to your broker they will commit to you, good times and bad. This is what we offer our operators and they see sense in it.
Hope this helps.
That said I do feel that 20% is an outrageously high margin for the local broker. For the operator/broker relationship to work both must accept that they need the other in order to exist and that as a result both must earn a reward for the service they offer. If one is taking all the reward to the detriment of the other then the market will eventaully fail.
So what to do? (I assume that is the question behind your post). I suggest fighting back by finding your own broker with knowledge of your local market. Agree with them a set rate per hour that gives you a reasonable return on your investment. To incentivise them agree that any hours sold in excess of a pre-determined monthly rate will lead to the excess hours being charged at a slightly lower rate. Agree that the broker cannot over-price your product. It would be sensible that during this economic downturn that the profit margin for the broker reflects the level of demand. Agree what this profit will be beforehand and agree open book accounting. Finally agree that the broker will have first call upon your fleet. And agree this over the medium term - do not see it as a short term measure to get you out of the recession. If you commit to your broker they will commit to you, good times and bad. This is what we offer our operators and they see sense in it.
Hope this helps.
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now a serious question....
Would you as customer pay "after the crisis" still 2300 per hours? When you had the possibility to fly for 1700 per hour?
----> I guess I do not have to explain this.....
Brokers are also co-responsible that my market is destroyed and that my customer`s went away .....
Itīs not alone the broker , also other competitorīs who came with larger fleets who have a discount MX contract etc....which lowers their costs....
NOW - how far should this go? Private Aviation Brokers Are Middle Men
----> I guess I do not have to explain this.....
Brokers are also co-responsible that my market is destroyed and that my customer`s went away .....
Itīs not alone the broker , also other competitorīs who came with larger fleets who have a discount MX contract etc....which lowers their costs....
NOW - how far should this go? Private Aviation Brokers Are Middle Men
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Charter Jarops,
I understand your frustration and I agree that the current market is truly cut-throat. I don't know your local market in detail however I recognise those operators that you refer to.
An operator with a large fleet will see some benefit in running flights at less than cost and the broker need not be the one who pushes prices down.
Now is the time to enter into a strategic partnership with your broker that will outlast the recession. Commit to sharing both the pain in the bad times and the profits in the good times. Plan for the next 5-7 years and have someone with you who will sell your product. All operators fly aircraft from A to B - that is not the product. A broker partner will help sell your individuality, your USP, your difference. That is your product and you need help to sell it to the market. You mention service and your association with the FBO - there must be more. All operators sell their "superior service level".
Finally note that we are not offering our help to you for a very good reason. We don't know your local market well enough and therefore can't add value. A good broker will tell you when they can and can't help. What is clear is that you need help as you are not flying at the moment. Good luck.
I understand your frustration and I agree that the current market is truly cut-throat. I don't know your local market in detail however I recognise those operators that you refer to.
An operator with a large fleet will see some benefit in running flights at less than cost and the broker need not be the one who pushes prices down.
Now is the time to enter into a strategic partnership with your broker that will outlast the recession. Commit to sharing both the pain in the bad times and the profits in the good times. Plan for the next 5-7 years and have someone with you who will sell your product. All operators fly aircraft from A to B - that is not the product. A broker partner will help sell your individuality, your USP, your difference. That is your product and you need help to sell it to the market. You mention service and your association with the FBO - there must be more. All operators sell their "superior service level".
Finally note that we are not offering our help to you for a very good reason. We don't know your local market well enough and therefore can't add value. A good broker will tell you when they can and can't help. What is clear is that you need help as you are not flying at the moment. Good luck.
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All good brokers have a larger contact list than most small charter operators, you pays for knowledge & network
Work closely with a few good brokers, stay loyal, stay candid & grow
Work closely with a few good brokers, stay loyal, stay candid & grow
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Itīs not alone the broker , also other competitorīs who came with larger fleets who have a discount MX contract etc....which lowers their costs....
(Brokers are not all bad, some are good guys to work with and bring indeed clients you would otherwise not reach and if you treat them well they'll seldom bite you)
Most of the companies I talked to then are gone. Its like in the inner cities, not before long there will be only Vodafone shops and other big chains able to survive.
Hell, I could only get a few to share a jaropsbook to save money.
To many egos, to little teamplayers. Not enough imagination.
Play to lose, kill with kindness
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All business is down 50-60% in Light Bizjet marketplace.
At the end of the day you have to compete with your competitor prices which fluctuate from one operator to another.
Brokers earn a commission because they generated the client and you did not.
You must spend marketing money to get clients like the brokers do, otherwise you will not get much flying.
The light jet market is price sensitive more than anything else.
Good Hunting.
At the end of the day you have to compete with your competitor prices which fluctuate from one operator to another.
Brokers earn a commission because they generated the client and you did not.
You must spend marketing money to get clients like the brokers do, otherwise you will not get much flying.
The light jet market is price sensitive more than anything else.
Good Hunting.
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Avinode & Air Partner Launches - Emptysectors.com
This is exactly what I do not like - We little operators are the slaves of the BIG Brokers.
That is the reason why I canceled my Avinode account - which is not worth mentioning it. The industry must wake up - it is still in the 80`s....and still sleeping.Guy`s out there we ( I ) need help.
Air Partner plc has launched an Empty Sectors consumer website.
The new website features real-time empty leg availability on private jets worldwide, by sector and aircraft, at lower pricing than conventional charter rates.
FC News - Air Partner Launches Emptysectors.com
That is the reason why I canceled my Avinode account - which is not worth mentioning it. The industry must wake up - it is still in the 80`s....and still sleeping.Guy`s out there we ( I ) need help.
Air Partner plc has launched an Empty Sectors consumer website.
The new website features real-time empty leg availability on private jets worldwide, by sector and aircraft, at lower pricing than conventional charter rates.
FC News - Air Partner Launches Emptysectors.com
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Charter Jarops,
I don't understand, why do you have a problem with someone actively promoting your product? If someone gives me revenue for sectors that are already paid for I'll be quite happy thankyou.
PB
I don't understand, why do you have a problem with someone actively promoting your product? If someone gives me revenue for sectors that are already paid for I'll be quite happy thankyou.
PB
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Merlin,
I've no inside track on this, but we tried to set up something similar a couple of years ago. The problem we had was that if the broker goes belly up then the money goes to the brokers administrator (whereas the cancx fees should go to the operator) and if the operator went belly up then the money goes back to the broker.
So, not a lot of protection for the operator. I'm sure someone is trying to get around this point of law, but I don't see any operators going for it until they do.
PB
I've no inside track on this, but we tried to set up something similar a couple of years ago. The problem we had was that if the broker goes belly up then the money goes to the brokers administrator (whereas the cancx fees should go to the operator) and if the operator went belly up then the money goes back to the broker.
So, not a lot of protection for the operator. I'm sure someone is trying to get around this point of law, but I don't see any operators going for it until they do.
PB
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Phil
The trouble with flogging other peoples empty legs are:
1/ They are dependant upon your first trip not cancelling out. The broker who sells
your empty leg at 100% profit is going to be mightly hacked off if the trip
cancels and will probably pressurise the operator to operate anyway.
2/ When clients pay for a return trip, albeit the return sector empty, strictly speaking
that leg belongs to that client. If he found out that it had been sold to somebody
else IMO he has the right to ask for half his money back.
3/ If too many operators participate it will only serve to drive prices down even
more.
The profit margin in a good year in this business is about 5%. Most of that comes from the occasional "double bubble". The only winners in the long term in this empty leg business are clients looking to buy a Ģ for 80p and the broker/organiser who has nothing to loose.
I would far prefer a gathering of operators that pooled information on empty legs, so any benefits can be retained by the operators who are the most hard pressed at the moment. All we would have to do is open a secure intranet site for Operators Only.
Somebody mentioned Avinode as a complete waste of time. It is for the operator but wonderful for the broker. I would love to hear from an operator who says avinode provides him with anything other than rock bottom priced trips
The trouble with flogging other peoples empty legs are:
1/ They are dependant upon your first trip not cancelling out. The broker who sells
your empty leg at 100% profit is going to be mightly hacked off if the trip
cancels and will probably pressurise the operator to operate anyway.
2/ When clients pay for a return trip, albeit the return sector empty, strictly speaking
that leg belongs to that client. If he found out that it had been sold to somebody
else IMO he has the right to ask for half his money back.
3/ If too many operators participate it will only serve to drive prices down even
more.
The profit margin in a good year in this business is about 5%. Most of that comes from the occasional "double bubble". The only winners in the long term in this empty leg business are clients looking to buy a Ģ for 80p and the broker/organiser who has nothing to loose.
I would far prefer a gathering of operators that pooled information on empty legs, so any benefits can be retained by the operators who are the most hard pressed at the moment. All we would have to do is open a secure intranet site for Operators Only.
Somebody mentioned Avinode as a complete waste of time. It is for the operator but wonderful for the broker. I would love to hear from an operator who says avinode provides him with anything other than rock bottom priced trips
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Hawker,
Good points well made, I'll answer your points in order.
1. That's the risk of not paying enough, it's using this point that you can promote leakage from the empty leg market to full price charters. I can assure you there is not a broker in the land who would make me fly a full charter at a one way leg price, you pay your money......
2. You are right, and if we get a good double bubble we have and do share it with our principal client (as long as we have made a healthy saving).
3. The sale of empty legs is a different client base with some leakage after the cheap seats have got used to it and don't want to fly orange again. And if it adds Ģ1000 to the cost we will sell it at Ģ2500 or more.
Good points well made, I'll answer your points in order.
1. That's the risk of not paying enough, it's using this point that you can promote leakage from the empty leg market to full price charters. I can assure you there is not a broker in the land who would make me fly a full charter at a one way leg price, you pay your money......
2. You are right, and if we get a good double bubble we have and do share it with our principal client (as long as we have made a healthy saving).
3. The sale of empty legs is a different client base with some leakage after the cheap seats have got used to it and don't want to fly orange again. And if it adds Ģ1000 to the cost we will sell it at Ģ2500 or more.
