There are many moving parts within the business of business aviation. So what are charter brokers, and what role do they play in business aviation? We spoke with Glenn Hogben, chief executive officer of the Air Charter Association, for an introduction to the topic in the latest of our ab initio guides!
At the most basic level, “an air charter broker is a company that provides a valuable intermediary service to individuals or companies looking to travel on an exclusively chartered aircraft,” Hogben tells us. “The aviation market is global and fast changing, and air charter brokers provide the latest knowledge and access to the most suitable aircraft and operators for a particular flight. Working closely with the client to identify the requirements of their trip and ensuring the closest regional airports are selected reduces the ground transfer times to the destination.”
“Air charter brokers also play an important role in carrying out due diligence on chosen aircraft operators,” Hogben says, noting that they “ensure all their documentation and insurance is up to date and ultimately that the flight they are travelling on is fully licensed and legal.”
Brokers will also arrange the passenger experience and any personalisation required: onboard bespoke catering, ground transfers via limousines or executive car services, luggage delivery, and so on.
“There are numerous types of charter brokers,” Hogben explains, “from traditional physical brokers to more technology-based brokers with web platforms to help with swift client transactions. Ultimately, these all go back to a physical broker with market knowledge and understanding of how to handle the arrangements and set up the flights.”
Technology is a crucial part of the puzzle
Depending on the kind of broker, their size, location and other factors, brokers may develop custom technology and software to help their staff work more efficiently or to enable smoother interaction with clients, with strong growth in the app- and web-based world as smartphones become more capable. The growing number of players evolving beyond the ‘Uber, but for private jets’ model is a key sign that there is much opportunity in this segment of the brokerage world.
“There are also commercially available technologies to support and work alongside brokers’ personal knowledge and experience,” Hogben explains. “These range from market information systems such as WINGX, aircraft location software such as Avinode and Returnjet, to transactional security software such as AvioNexus. There are of course many more and often broking companies select a range of these to complement their own systems. The overall focus for the use of technology is to support making the process of chartering an aircraft as efficient, safe, and secure as possible.”
The broker industry is looking into how to continue the development of these technologies — and, crucially, into how to adapt them into the forthcoming eVTOL era, where the new generation of aircraft are designed from the wheels (or skids) up to be digitally enabled.
Commercialising eVTOLs, especially in crowded airspace, will be critical to their success, and charter brokers, with their experience of both shorter range private fixed-wing and rotary aircraft, will have an important role to play here. Equally, the development of cargo drones serving a variety of purposes and with a variety of sizes and ranges will likely require some kind of brokerage function as they increase in capability and deployment.
Current and future challenges reflect wider industry, but not perfectly
As with many other parts of the aviation industry — and indeed the wider economy — key risks to brokers at present include capacity shortages, the staffing crunch, and the impact of fuel price changes. The ways these affect brokers are in some ways similar and some ways different to how they affect other players, however.
“Capacity has been a significant issue during the peak travel months of 2022 as demand for chartered aircraft has exceeded, on some occasions, the aircraft that were available,” Hogben says. “This issue not only results in disappointed clients who want to travel but can’t, but from an industry concern perspective, can lead to a reduced service level provision in what is an industry with the highest of expectations. Operators and brokers have worked flat out over the summer to arrange flights, at the same time as trying to recruit good staff to add resource to their organisations.”
The staffing, skills and talent shortages stem from a variety of sources: macro- and micro-economic labour market issues, furloughs during the depths of the COVID-19 pandemic, a greater number of opportunities outside the industry, pay, conditions, security requirements, and more. Given that business aviation works 24 hours a day, 7 days a week, 365 days a year, the drive to deliver services on time to customers is perhaps even stronger within brokers than elsewhere in the wider industry.
The price of fuel will be no surprise to anyone, but Hogben notes that it means that “aviation is certainly experiencing a significant rise in costs, which impacts all parties involved as prices and profit levels are squeezed. This is particularly difficult at a time when the aviation industry is actively moving towards a greater use of sustainable aviation fuels and many initiatives to reduce emissions. Many of these sustainable initiatives and progress areas are being hampered by the price increases.”
Looking towards the longer term, the industry is facing existential challenges around sustainability and externalities around possible regulation, including potential bans or higher taxes and charges designed to discourage use. Ongoing engagement around emissions reduction, the use of more sustainable fuels, alternative power sources and credible offsetting options are now bearing fruit, and brokers have the opportunity to capitalise on bleeding-edge and leading-edge technologies here.
Alongside the current set of business aviation traveller requirements is likely to sit a new set, based on carbon or carbon-equivalent emissions. The brokers of the future will need to be able to quote CO2 tonnes alongside dollars or euros, and the technology underpinning those quotes will need to be robust enough for corporate compliance and environmental goals.
Author John Walton
Published 8th November 2022
Feature photo by CHUTTERSNAP on Unsplash
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