Corruption in Private Aircraft Charter
How much are aircraft brokers actually making on a flight?
Aircraft operators may be the only ones that truly know the answer to this question. Aircraft operators (the ones that operate the airplanes that provide the charter service) often have visibility to what the client was charged and what the flight actually cost. After speaking with several aircraft operators about the mark-up that brokers are charging, a disturbing trend emerged.
The accepted "norm" for brokering out an aircraft is that the operator will discount the cost of the flight by 5% to the broker. The broker, in turn, adds the 5% back onto the cost so that the price to the client is the same whether they book through a broker or directly through the operator. This scenario should work in favor of both the operator and the client.
In the standard scenario, the aircraft operator benefits by having brokers bring them clients they would otherwise not have. The client benefits, in theory, because they have an advocate looking for the best deal across multiple operators. So, how has the service industry of aircraft brokerage become so corrupt?
Like anything, lack of transparency ultimately lends itself to greed. The aircraft operators that we spoke to revealed how much corruption there is within the aircraft brokerage world. The operators disclosed that they have seen brokers charge anywhere from the industry standard 5% to a whopping 40% for their brokerage services. On top of the ridiculous commission aircraft brokers charge, they are also not held accountable to "shopping" around for the best deal. Often, brokers have a working relationship with select operators. They may receive two or three quotes and may not even present their client with the lowest price option. Why? The commission they receive is based on the cost of the flight. They make more money if the client is charged more for the flight. The current standard does not encourage fair pricing for the aircraft charter customer.
So, how do we change the current standard so that the average charter customer can have faith that they are getting the best deal? The solution is apparent. We have to provide the charter customer and the operators visibility into the bids received on a charter flight. This keeps the broker accountable to the client. A relatively new company has provided a unique way to provide this transparency into the aircraft brokerage industry.
Clear Flight Charters is the first aircraft brokerage company to adopt a model of transparency for both the charter client and the operators providing the flights. Through transparent brokerage, the client is able to see all options for their flight. They can clearly see how many bids have been received for their flight and which option best fits their needs.
Clear Flight Charters provides an additional advantage to the charter customer. Because the operators have visibility to the other operator's bids, they are able to discount their flights below their standard pricing to out-price the lowest bid and secure the charter flight.
The tough economic times have led some aircraft brokers to put ethics aside and gouge their customers to stay afloat. Clear Flight Charters has decided to take a different approach and change the business model to better serve their customers. Learn more about Clear Flight Charters at www.clearflightcharters.com.
Aircraft operators may be the only ones that truly know the answer to this question. Aircraft operators (the ones that operate the airplanes that provide the charter service) often have visibility to what the client was charged and what the flight actually cost. After speaking with several aircraft operators about the mark-up that brokers are charging, a disturbing trend emerged.
The accepted "norm" for brokering out an aircraft is that the operator will discount the cost of the flight by 5% to the broker. The broker, in turn, adds the 5% back onto the cost so that the price to the client is the same whether they book through a broker or directly through the operator. This scenario should work in favor of both the operator and the client.
In the standard scenario, the aircraft operator benefits by having brokers bring them clients they would otherwise not have. The client benefits, in theory, because they have an advocate looking for the best deal across multiple operators. So, how has the service industry of aircraft brokerage become so corrupt?
Like anything, lack of transparency ultimately lends itself to greed. The aircraft operators that we spoke to revealed how much corruption there is within the aircraft brokerage world. The operators disclosed that they have seen brokers charge anywhere from the industry standard 5% to a whopping 40% for their brokerage services. On top of the ridiculous commission aircraft brokers charge, they are also not held accountable to "shopping" around for the best deal. Often, brokers have a working relationship with select operators. They may receive two or three quotes and may not even present their client with the lowest price option. Why? The commission they receive is based on the cost of the flight. They make more money if the client is charged more for the flight. The current standard does not encourage fair pricing for the aircraft charter customer.
So, how do we change the current standard so that the average charter customer can have faith that they are getting the best deal? The solution is apparent. We have to provide the charter customer and the operators visibility into the bids received on a charter flight. This keeps the broker accountable to the client. A relatively new company has provided a unique way to provide this transparency into the aircraft brokerage industry.
Clear Flight Charters is the first aircraft brokerage company to adopt a model of transparency for both the charter client and the operators providing the flights. Through transparent brokerage, the client is able to see all options for their flight. They can clearly see how many bids have been received for their flight and which option best fits their needs.
Clear Flight Charters provides an additional advantage to the charter customer. Because the operators have visibility to the other operator's bids, they are able to discount their flights below their standard pricing to out-price the lowest bid and secure the charter flight.
The tough economic times have led some aircraft brokers to put ethics aside and gouge their customers to stay afloat. Clear Flight Charters has decided to take a different approach and change the business model to better serve their customers. Learn more about Clear Flight Charters at www.clearflightcharters.com.
Source...