Operator or Broker

2016 » October 2016
PHOTO: FOTOLIA
Monday, November 14, 2016 - 12:00pm

Should you call a charter operator or a broker to book your next flight? The type of aircraft you need, the pickup point, and the availability of nearby lift play large roles in getting the answers right. So does understanding the difference between the two types of providers, and what sets one broker or operator apart from another.

Operators control the aircraft you charter. They either manage or own those aircraft, and they have approval from a regulatory authority—the U.S. Federal Aviation Administration or the European Aviation Safety Agency, for example—to use them for on-demand revenue flights. The best ones also adhere to safety standards certified by third-party auditors such as Argus International or Wyvern.

In contrast with operators, brokers have no control over aircraft and act only as intermediaries, making the arrangements that connect you with the companies that actually provide your flights. To do so, they need no professional license or other approval. (The U.S. Department of Transportation in 2013 proposed regulations for brokers—which critics branded inadequate—but has yet to impose any rules.)

The most basic difference among operators is the size of their fleets, a factor that can be more important than you might think. Say you need a midsize jet, decide a Citation Sovereign will suffice, and find a charter operator whose only aircraft is that model. All set? Maybe not. What if the jet lacks the Wi-Fi capability you need or has a mechanical problem or is already booked on the day of your trip? An operator with a larger fleet will likely have a wider selection of aircraft that suit your needs, as well as the backup lift to get you airborne should your intended ride be unavailable. (Websites such as aircharterguide.com allow you to search operators by aircraft in their fleets, location, and other variables, and broker listings by location; the National Business Aviation Association lists member charter providers under the “Products & Services” tab at nbaa.org.)

Operators of larger charter fleets also typically provide better service, as they strive to stand out in the highly competitive national charter arena. Another size issue: small charter fleets are more likely used by the operator for their own business needs—a corporate flight department, for example—so aircraft availability may be limited.

Brokers, like operators, vary in scale, from boutique firms to companies with offices worldwide that arrange charters for heads of state. But even small brokerages have few limitations on the size of the fleets they can access. Today, online platforms pool scheduling data fed by operators, giving brokers real-time information on the availability and position of thousands of business aircraft around the globe.

Quality brokers typically work with a network of first-tier operators, providing access to hundreds of high-quality, vetted aircraft. If you can’t find an operator with a Wi-Fi-equipped Sovereign, a broker can. A broker can also access unusual or specialty aircraft that few operators have in their fleets—a floatplane for a backcountry vacation or an air ambulance for a medical emergency, for example.

So if fleet size is important, why bother with an operator at all? Your location could provide one reason, and having direct contact with the company conducting the mission can provide benefits of its own.

From a location perspective, the cost of getting your chartered aircraft to you is factored into the price. Major metro regions have the highest concentration of operators and based aircraft. If you live in such an area, a locally based operator can likely provide the lift you need, without repositioning fees added into the final cost. Conversely, if the pickup point is an out-of-the-way location with no charter aircraft based nearby, a brokerage is a better booking choice; it can find the nearest suitable aircraft, which may be scheduled to overfly your airport on an empty-leg flight, helping to minimize repositioning costs.

Another difference between operator and broker: the former can give you an immediate answer regarding aircraft availability, and a price quote; call a brokerage, and it will have to check with operators before getting back to you. Moreover, a local boutique brokerage may not be equipped to handle the international flight you’re planning while a more distant operator may have an intercontinental Gulfstream based nearby and the experience to handle all facets of your trip. But if the operator doesn’t have the right available aircraft, or the right rate, you’ll have to call another; a broker handles all that legwork for you.

Of course, if you deal directly with an operator, there’s no broker’s commission, but that doesn’t necessarily translate into a lower price—particularly if you’re booking just one trip rather than offering steady, repeat business. As volume buyers, brokers can get lower rates than you can, and commissions tend to be low. Charter is a thin-margin business, and there’s not much room to provide discounts, so a quote you get from an operator probably won’t be much different from what a broker would charge. While you may think you can negotiate a better rate through an operator because no broker’s commission is involved, a broker can get quotes from three operators—all of whom realize they’re in something of a bidding war—ensuring you receive competitive bids.

My recommendation: if it’s a one-off trip, contact an operator directly only if you need an immediate response; otherwise, use a quality broker. You’ll ultimately be matched with an operator and aircraft that suit your needs, and you’ll save yourself a ton of time and second-guessing.

If you’re choosing a more long-term provider, that’s a different story. In that case, you need to also weigh other factors, such as the value of having a face-to-face relationship with the company that actually operates your flights.


James Wynbrandt (jwynbrandt@bjtonline.com), a private pilot, is a regular BJT contributor who has written for the New York Times, Forbes, and Barron’s.

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Airstream Jets
on November 15, 2016 - 2:21am

Very informed article about the Private Jet Charter Industry.

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