The state of the air charter market
Would having fewer aircraft operators with larger fleets benefit the air charter market? This question was one of many issues discussed at the ‘Role of the Charter Broker’ session at the Business Aircraft Europe 2012 seminar in Biggin Hill.
The panel, chaired by BACA Chairman Dick Gilbert, consisted of brokers Alex Berry from Chapman Freeborn, Sandy Boyer from Hunt and Palmer, and Mark Green from Oxygen Aviation.
Alex Berry says the VIP and executive market is still a bit of a cottage industry, especially compared with the United States.
“In the US, an operator with 50 aircraft would be considered a ‘mom and pop’ business. In Europe, it is treated though it was the ‘world’s biggest operator’. All these small operators with two or three aircraft is financially a completely unworkable model.”
The panelists agreed that consolidation of aircraft operators has been talked about for years. So why hasn’t that happened?
Mark Green suggests that it is a quite emotive issue. “Many owners of these small companies still see it as their baby and will fight to retain control.”
All agreed that it can be difficult to ensure the quality of service is maintained. Aircraft availability can be a recurring problem especially when aircraft owners ‘want their cake and eat it’. In other words, they want charter revenue on their aircraft but also demand their aircraft are always released for their own use.
Sandy Boyer asked if there should also be more regulation of air charter brokers, especially with so many new brokers entering the market over the last two or three years.
“Maybe there should be a certification for brokers, which would ultimately be a benchmark of achievement and help to weed out the weaker brokers.” He admitted that it may increase overheads leading to possible price increases for clients but ‘’if we can provide an even better service then they would be willing to pay for it.’’
The general consensus was that there was a necessity for continued dialogue and understanding between brokers and operators, enabling each to be fully aware of their respective roles and responsibilities to clients and suppliers.
In other words, some operators need to value the brokers’ role much more and understand the benefit they bring to clients and suppliers.
Sandy Boyer said the vast majority of operators do a fantastic job but the brokers are vulnerable if an operator fails to deliver what he promised. “We are particularly exposed to those operators that leave brokers in a difficult position because, ultimately, we are the first point of contact for the client….not the operator.”
Too many instances arise when a broker has not been at fault but the broker loses the client when the operator fails to take responsibility, he says. “Inevitably circumstances dictate that we’ll book that same operator soon after or the client flies with them through a different broker.”