Charter Broker or Charter Operator: Which Is Right for You?
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Flying private seems exciting, glamorous and efficient. You can skip the middle-of-the-night wakeups, the long lines, the inconvenient stopovers and the crying toddlers and instead travel when you want, where you want. The flip side is that arranging a flight on a private jet isn’t as straightforward as logging onto a Website, selecting from pre-set options and clicking on the Purchase button. As the traveler, you’re responsible for finding an entity that can provide you with the private jet experience you seek.
If your travel needs will be fairly predictable, consistent and ongoing, a “jet card” program or fractional ownership that allows a certain number of flights for a prepaid fee may work best for you. If you want the true private jet travel experience, in which your convenience is the top priority, you’ll need a charter that can offer a single flight arrangement. However, that brings up another question – do you want a charter operator or a charter broker? From an operational, legal and regulatory point of view, the two are not the same. If you’re trying to figure out which is right for you, read on for some helpful tips.
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Rules and Regulations
Basically, a charter operator is an entity that operates aircraft directly, or manages aircraft owned by others and leased out to the organization. A charter broker, on the other hand, does not operate any aircraft itself – instead, it contracts with operators to provide, staff and conduct flights.
While each country has its own regulatory approach to private air travel, looking at the framework in the U.S. provides a useful starting point. The U.S. Federal Aviation Administration (FAA) directly oversees charter operators – in fact, charter operators must be licensed by the FAA in order to operate as such in the U.S., under Title 14 of the Code of Federal Regulations (14 CFR).
In order to receive a Part 135 certificate allowing a company to describe itself as an air charter operator, an applicant must be a U.S. citizen, establish a physical location for a main operating base, have the exclusive use of at least one aircraft meeting specified requirements, ensure acceptable maintenance protocols, carry adequate insurance, designate certain individuals such as director of operations and chief pilot, obtain “economic authority” from the U.S. Department of Transportation (DOT), submit company manuals and training programs and meet several other qualifications.
If your eyes haven’t glazed over reading all that, you may be wondering exactly how the FAA regulates air charter brokers. That answer is much shorter: It doesn’t. As per the U.S. National Business Aviation Association, “while Part 135 charter operators are closely regulated by the FAA, air charter brokers are not plainly and comprehensively regulated.”
Historically, in the U.S., charter brokers were often “one-man bands,” according to Paul Travis, senior charter broker at Skyllence Business Aviation. “They were usually people working out of their back bedrooms, a lot of small, independent operators,” Travis says.
To be clear, charter brokers aren’t operating in a true free-for-all environment in the U.S. In 2019, the DOT celebrated Valentine’s Day with new rulings affecting brokers. CFR Part 295 was developed in response to recommendations from the U.S. National Transportation Safety Board following accidents involving flights arranged by brokers. The new rules define the term “air charter broker,” require them to make certain disclosures to consumers (including the fact that they do not own the aircraft involved) and prohibit certain practices. On top of that, charter brokers are typically working with operators offering regulated airplanes, meaning that safety isn’t a specific concern.
However, even with these recent developments, charter brokers are still in a very different space from charter operators in terms of regulatory stringency. Neither the FAA nor the DOT have attempted to define the qualifications necessary for a would-be broker to enter the business – a broker may be an aviation expert or a total newbie. If your highest priority is regulatory reliability, you’ll probably want a charter operator.
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Money, Money, Money
While private jet travel isn’t exactly a super-frugal option, most flyers still have some concerns about cost. An obvious question when analyzing brokers vs operators is, which will be more expensive? The answer depends on who you ask.
From an operator’s perspective, a broker can seem like a middleman tacking on additional charges. On a page giving reasons to “charter directly from an operator,” Macair, a charter operator, asserts, “It makes sound financial sense to keep your money in your own pocket and not in the hands of a private jet sales broker who charges a high markup on the flights they find from other operators.”
That having been said, the adage “you get what you pay for” is as true in private jet travel as in everywhere else. “There is a perception in North America that a broker is an added layer of cost,” Travis says. “But there’s genuine true value for the customer when it comes to that service.”
And expert middlemen typically know more than the average consumer about the ins and outs of pricing that can affect private jet travel. For example, a broker may suggest a different airport for departure and/or arrival that’s close to the original requested, but much less expensive. Modifying flight time by a few days may get you into a cheaper travel season – something a seasoned broker can identify. And a broker who provides significant repeat business for an operator can potentially use that as leverage to negotiate lower prices for customers.
Any fees charged by the “middleman” may be offset significantly by the knowledge said middleman is contributing. If your highest priority is value/cost, you’ll want to compare brokers to operators to see who offers the best alternatives.
It's Complicated
An old business saying is that “optionality adds value.” In private jet travel, charter brokers will almost always be able to offer a wider range of options than charter operators. Even the largest charter operators have only so many planes available at a given time, and that time may not coincide with your needs as a customer.
Some of the larger charter operators are actually “managing” aircraft owned by individuals who are seeking the favorable tax treatment that comes from having a private jet classified as being predominantly used for business purposes. While this allows them to offer a wider variety of planes than a pure owner-operator, they’re also somewhat at the mercy of the actual owners, who may have their own needs for their planes at a given time.
All this means that a charter broker will typically have the advantage over an operator at securing the exact plane a customer is seeking, at the exact time and place. And, if something goes wrong with the first plane selected, a broker should be able to provide an alternative on a timely basis. “Brokers especially tend to prosper where the supply is complicated,” Travis says. “If there are a lot of products at varying sizes, a broker will add a great deal of value just by de-mystifying the whole thing and narrowing it down to three or four options.”
Bottom line: If your highest priority is convenience, you’ll probably want a charter broker.
Working Together
All that having been said, even given rules, regulations and common practice, the dividing line between operators and brokers may not be as rigid as it appears at first glance. As previously mentioned, certain charter operators are managing aircraft for individual owners rather than limited inventories that they own outright. And, at times, operators may themselves reach out to brokers to fulfill commitments if mechanical issues or other unexpected obstacles arise.
Ultimately, the answer to whether a charter broker or charter operator is right for you will depend heavily on your specific situation, needs and preferences…and may even change from flight to flight.
“There’s no right or wrong on charter brokers vs. operators,” Travis says. “It should be seen as a symbiotic relationship that’s mutually beneficial.”