Air charter brokers
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Air charter brokers
Dear all, I hope I have placed this in the right forum.
I work for a small family run operator who has never had a working relationship with a broker. Now we would like to approach one but when I contacted a certain broker in the UK, they were so rude. Eventually they asked to send in all info on the company. Fine. But when I mentioned on what fees we would be working on, this was the reply:
"We never disclose fees as they are unique to each booking and private to us!
No broker will ever disclose this!"
Is this normal? I thought an operator (we) had to discount this amount (fee) to the broker so that the end price of a charter is the same to direct client or broker. How does it work then???
Thank you all!
I work for a small family run operator who has never had a working relationship with a broker. Now we would like to approach one but when I contacted a certain broker in the UK, they were so rude. Eventually they asked to send in all info on the company. Fine. But when I mentioned on what fees we would be working on, this was the reply:
"We never disclose fees as they are unique to each booking and private to us!
No broker will ever disclose this!"
Is this normal? I thought an operator (we) had to discount this amount (fee) to the broker so that the end price of a charter is the same to direct client or broker. How does it work then???
Thank you all!
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straight forward: the broker uses smoke and mirrors to ensure you and the end customer have no idea what the real price is. Great business 
For the same reason it doesnt matter to most brokers that you invest more in pilottraining, pay a normal wage to full time pilots and have a real company supporting you. They will only look at one thing: price... They are the reason that we have had crappy companies like 24 jets etc exist....
RANT over
For the same reason it doesnt matter to most brokers that you invest more in pilottraining, pay a normal wage to full time pilots and have a real company supporting you. They will only look at one thing: price... They are the reason that we have had crappy companies like 24 jets etc exist....
RANT over
Last edited by No RYR for me; 14th Oct 2013 at 07:06.
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Thank you all for the replies!
So I understand it is not a straightforward business then? I dont understand how we, as operators, cannot ask what comission the broker charges us? how i am supposed to make sure the end client gets always the same price from us whether via broker or not?
This particular broker has been very very rude in their way of addressing via email... The bottom line is, if the broker is going to charge me a fee, how come they get insulted if I ask them what the fee is??
So I understand it is not a straightforward business then? I dont understand how we, as operators, cannot ask what comission the broker charges us? how i am supposed to make sure the end client gets always the same price from us whether via broker or not?
This particular broker has been very very rude in their way of addressing via email... The bottom line is, if the broker is going to charge me a fee, how come they get insulted if I ask them what the fee is??
Because, for many, their point of view is that they're charging the end customer the fee. You're just one of many (or even alternative) service providers in the package they supply to the customer. Do you tell your customers what your markup is?
Last edited by Tinstaafl; 15th Oct 2013 at 03:21.
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Air charter brokers
I think perhaps it's a breakdown in communication with the Broker, at the end of the day as an Operator you have to give the broker a Net price for you to do the job which allows for all costs to be covered and some profit on top, the broker then gives the end user the price with his commission on top.
Who cares if he/she puts 10 or 20% on top, if you got the trip then perfect.
Your posts make things sound overly complicated when it doesn't need to be which is why in think there is a communication/translation breakdown.
Cheers
D
Who cares if he/she puts 10 or 20% on top, if you got the trip then perfect.
Your posts make things sound overly complicated when it doesn't need to be which is why in think there is a communication/translation breakdown.
Cheers
D
Its beneficial to know what the brokers are adding on. As you don't want to be linked to a broker that is charging 30% margin when everyone else is charging 20% and your aircraft is sitting on the deck.
Why would brokers produce glossy brochures and spangly websites and not disclose to the operator what their intended margin is.
There are some very good brokers out there, however there are some truly poor ones, just like operators.
If you are not getting a good feeling from a broker, then walk away. There are loads of them out there.
PM if you want a couple of names of people I trust.
Why would brokers produce glossy brochures and spangly websites and not disclose to the operator what their intended margin is.
There are some very good brokers out there, however there are some truly poor ones, just like operators.
If you are not getting a good feeling from a broker, then walk away. There are loads of them out there.
PM if you want a couple of names of people I trust.
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Brokers fees
Why should a broker declare their fee to an operator?
Does an operator declare how much profit they make on every flight?
Now if you want to enter into an exclusive marketing arrangement with a broker then that would be different..............
Does an operator declare how much profit they make on every flight?
Now if you want to enter into an exclusive marketing arrangement with a broker then that would be different..............
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Easiest way:
Give the broker a price as you do with all other clients. In the end all parties involved should be happy. The end user will be happy if he agrees in a price, the operator is happy if he get's a good price and the broker is happy if he gets his margin, no matter how high the margin is.
If you want to get into a fixed marketing agreement with a broker, you should negotiate a fixed fee or margin - that's clear and OK. But then you should consider, that this is not a one-way-street.
Basically I also think it is funny, that everybody expects from a broker to publish his margin. Do you ask that your car dealer, hotel, supermarket, taxi driver etc too? Or does your maintenance provider, fuel supplier, caterer, airport tell you their margins.
It comes back where I've started: If the price is right, everybody can be happy.
Give the broker a price as you do with all other clients. In the end all parties involved should be happy. The end user will be happy if he agrees in a price, the operator is happy if he get's a good price and the broker is happy if he gets his margin, no matter how high the margin is.
If you want to get into a fixed marketing agreement with a broker, you should negotiate a fixed fee or margin - that's clear and OK. But then you should consider, that this is not a one-way-street.
Basically I also think it is funny, that everybody expects from a broker to publish his margin. Do you ask that your car dealer, hotel, supermarket, taxi driver etc too? Or does your maintenance provider, fuel supplier, caterer, airport tell you their margins.
It comes back where I've started: If the price is right, everybody can be happy.
Last edited by ChiefT; 15th Oct 2013 at 13:40.
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As you don't want to be linked to a broker that is charging 30% margin when everyone else is charging 20% and your aircraft is sitting on the deck.
Just make your capacity available to as many as possible and as mentioned at net rates 
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I have found that brokers tend to want net prices; so we always quote net; that way they can fight it out amongst themselves. There are good brokers and bad brokers; but I have always treated them with respect. Never side with one broker; not fair for the others and frankly pointless; no broker will ever show you loyalty either.
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Company does some brokerage. Not the main source of income by a long shot so it's done fairly quick and dirty.
We ask operator for a quote as if we are Mr Bloggs and then we add 10%.
We ask operator for a quote as if we are Mr Bloggs and then we add 10%.
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Basically I also think it is funny, that everybody expects from a broker to publish his margin. Do you ask that your car dealer, hotel, supermarket, taxi driver etc too? Or does your maintenance provider, fuel supplier, caterer, airport tell you their margins.
Car Dealer - buys his own stock and takes the commercial risk
Hotel - They own the hotel, employ the staff and take the commercial risk
Super market - Building, staff, stock - commercial risk
Taxi Driver - owns or rents his taxi, and takes the commercial risk
In fact all of your expamples own their own assets and take the commercial risk. Essentially, its their stock or service.
Brokers / agents sell other peoples stock or service. The brokers service is infact their ability to bring end user to supplier. All people want to know is what that service costs. Pretty normal scenario I would say.
Better examples would be :
Estate agent - Full disclosure / regulated
Travel Agent - Full disclosure / regulated
Insurance broker - Full disclosure / regulated
Stock broker - Full disclosure / regulated
It's about time that brokers woke up and get their act together with this or they will be subject to regulatory compliance and forced to go open book...as per the above noble trades (EASA are looking at this as are the FAA) Add to this that the average bizjet charterer is becoming more and more savvy and new innovations in communication technology making it far easier to book direct.
Isn't a bit mad that anyone can start a small company, call themselves Private Jet flights 4U Ltd, and sell a $200k charter without any regulation, industry oversight or qualification, yet you can't sell a £50 seat on scheduled flight without an ATOL licence, having given financial assurances to the regulator.
Is that coffee I smell?
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There are serious negative regulatory and liability issues in letting a broker get between you the certificate holder and the ultimate customer.
It took the Platinum accident at Teterboro some years ago to get back to The FAA enforcing one of their regulations regarding "holding out" as an operator.
Now brokers are required to reveal the operator, there AOC and ALL their DBA's to the client.
Brokers have a role but it must be transparent to he user.
I goes on but as an operator of several heavies I used to quote the brokers the same price as the direct enquiry. It is their problem to agree their fee for whatever value add and there often can be to the client.
You need to be very careful how and where you sit in the transaction.
If the merde hits the fan, and it did in the Platinum case, one or more of the parties will be spending time in the big house.
It took the Platinum accident at Teterboro some years ago to get back to The FAA enforcing one of their regulations regarding "holding out" as an operator.
Now brokers are required to reveal the operator, there AOC and ALL their DBA's to the client.
Brokers have a role but it must be transparent to he user.
I goes on but as an operator of several heavies I used to quote the brokers the same price as the direct enquiry. It is their problem to agree their fee for whatever value add and there often can be to the client.
You need to be very careful how and where you sit in the transaction.
If the merde hits the fan, and it did in the Platinum case, one or more of the parties will be spending time in the big house.
Last edited by gaunty; 16th Oct 2013 at 13:29.
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Chief -
Car Dealer - buys his own stock and takes the commercial risk
Hotel - They own the hotel, employ the staff and take the commercial risk
Super market - Building, staff, stock - commercial risk
Taxi Driver - owns or rents his taxi, and takes the commercial risk
In fact all of your expamples own their own assets and take the commercial risk. Essentially, its their stock or service.
Flynowpaylater:
Good examples!
You miss major part of the (good) Brokers Story, i.e. if Broker undergoes a legal contract with Operator and legal contract with final user, there is plenty of risk for the Broker!
Car Dealer - buys his own stock and takes the commercial risk
Hotel - They own the hotel, employ the staff and take the commercial risk
Super market - Building, staff, stock - commercial risk
Taxi Driver - owns or rents his taxi, and takes the commercial risk
In fact all of your expamples own their own assets and take the commercial risk. Essentially, its their stock or service.
Flynowpaylater:
Good examples!
You miss major part of the (good) Brokers Story, i.e. if Broker undergoes a legal contract with Operator and legal contract with final user, there is plenty of risk for the Broker!
Last edited by zolfen; 16th Oct 2013 at 14:37.
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I'm often mystified by PPRuNe'rs. Such smart, worldly guys, who for some reason often rail about how life SHOULD be. Why not accept that brokers make what they make, and it's nonya business.
So if you are a management company owner, (or a savvy pilot), find ALL the brokers you can, take each of them for a pint and dinner, and fight over the bill, and see how much business you can get.
Sniff them over, call your mates and check them twice, you know that they're naughty, so get cash up front.
I believe this is called "The American Way"
FR
So if you are a management company owner, (or a savvy pilot), find ALL the brokers you can, take each of them for a pint and dinner, and fight over the bill, and see how much business you can get.
Sniff them over, call your mates and check them twice, you know that they're naughty, so get cash up front.
I believe this is called "The American Way"
FR
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FrankR - If its none of the operator business, the broker won't mind that the end client takes a busniess card from the operator then? Afterall, it's nonya buisness right?
Brokers are very protective of what they charge as it is currently hidden to both the operator (who's service you are representing) and the end client (who's money you're taking). Ultimately, not a sustainable situation.
Brokers are very protective of what they charge as it is currently hidden to both the operator (who's service you are representing) and the end client (who's money you're taking). Ultimately, not a sustainable situation.
It would appear that things have changed considerably since I was in the brokerage business 20 years ago.
It was normal at that time to be given a gross price by the operator with a broker's commission of 5% for heavy metal and 7.5% for the lighter stuff. We never loaded the price; not necessarily from a sense of altruism but the possibility the client might get a quote direct from the operator and be unhappy. For one particularly large contract client we rebated the gross price by a couple of percent. That system worked well for us and, I like to think, for our clients and the operators. I wouldn't have liked a system where we were quoted net prices by the operators as seems to be the case nowadays reading this thread.
For our largest freight client the contract stipulated that one of our staff attend the loading and departure, wherever in Europe that may be. I recall that one of the big London brokers often attended local departures as well. Does anybody still do that I wonder?
It was normal at that time to be given a gross price by the operator with a broker's commission of 5% for heavy metal and 7.5% for the lighter stuff. We never loaded the price; not necessarily from a sense of altruism but the possibility the client might get a quote direct from the operator and be unhappy. For one particularly large contract client we rebated the gross price by a couple of percent. That system worked well for us and, I like to think, for our clients and the operators. I wouldn't have liked a system where we were quoted net prices by the operators as seems to be the case nowadays reading this thread.
For our largest freight client the contract stipulated that one of our staff attend the loading and departure, wherever in Europe that may be. I recall that one of the big London brokers often attended local departures as well. Does anybody still do that I wonder?
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Things have changed. See FlyVictor who publish a list of over 100 operators with 500 aircraft on their platform with addresses telephone numbers and links. We (declared interest) have been offering a B to C platform for over 2 years and completed nearly 600 flights. At quotation stage the operator, actual aircraft with tail number and actual pictures are shown to the potential flyer. The margin is declared at 5% for online bookings and 10% for a concierge service. A complete transparent online booking service backed by a member services team.