ACANA chairman Joel Thomas says phantom bidding is an issue

Air Charter Association of North America tackles industry issues

Taking the lead on government regulatory agendas

One of the first initiatives ACANA worked on was collaboration with the US Department of Transportation (DOT) regarding a regulatory framework for brokering chartered aircraft in the United States. “While it may seem strange that our association would lobby the DOT for regulation, ACANA recognised that collaboration trumps strangulation,” explains Scott Bickford, ceo of Air Planning LLC and ACANA co-founder.

In 2007, ACANA's board met with the DOT's aviation enforcement division, which focused on challenges facing effective broker regulations. One issue Bickford recalls: “Brokers were regulated under ticket agents, given that there was not a regulatory category for aircraft charter brokering. The result was light and often inconsistent regulation at best, coupled with almost zero barriers to entry. That created an environment ripe for dishonest characters to wreak havoc on customers and operators alike. Operators who brokered aircraft faced a similar environment.”

The infamous 2005 Teterboro, New Jersey, accident really got the DOT's attention. (In its final report, the National Transportation Safety Board concluded: a corporate jet, illegally operated by Platinum Jet Management LLC, ran off the departure end of a runway, struck one car outside the airport's fence, then crashed into a warehouse and caused a fire. A number of people were injured and seven people connected to the company were indicted on charges relating to improper certification to fly, use of unqualified pilots and inaccurate reporting of aircraft weight for fuel economies.) At that time the DOT had no idea how many brokers existed, whereas today its rough estimate is 3,500.

“The accident resulted in jail time for the operator's employees and a fine was imposed on the broker by the DOT, which was a bellwether of sorts,” Bickford points out. “More than ever, the brokerage industry needed to work together to avoid being in the regulatory and public spotlight only following an accident or financial calamity.”

In 2009, ACANA played a pivotal role in the DOT's Notice of Proposed Rule Making decision, which granted Indirect Air Carrier status for some brokers who arranged charters on behalf of US government agencies.

The organisation has and continues to engage the DOT, relative to its Enhanced Consumer Protections for Charter Air Transportation, released on September 30, 2013, concerning broker regulations. Although the DOT's final rule on broker regulations has yet to be set in stone, Bickford is hopeful for word sometime this summer. One thing is for sure, the elephant in the room will disappear once the DOT publishes its final ruling.

“ACANA anticipates the DOT's final ruling will include many of the components that the association has advocated on behalf of industry for almost a decade,” Bickford declares. “Due to the nature of our industry, ACANA will continue to work with the DOT.”

ACANA's advocacy by no means limited to the DOT

“Recently, the association has been collaborating with the Transportation Security Administration (TSA) in order to bring the benefits of a recent TSA amendment to a wider pop-ulation of air charter customers,” Bickford says. “The initial application of the amendment severely limited access to these benefits for clients of brokers.”

In May, Bickford said the TSA and ACANA had reached a solution concerning the amendment's application. “It's been reported that the TSA will provide a revision to the amendment this month, which will ensure qualifying customers of brokers have access to the benefits of the amendment,” he added. “ACANA is pleased with the TSA's willingness to cooperate with the association in reaching a workable solution.”

Bottom-feeder broker scheme: phantom bidding One of ACANA's core missions is to “promote consumer education”. The association asserts that the more know-ledgeable consumers become about air charter, the less likely they will be to fall for rogue brokers, whose only goal is to cheat them out of their money.

“As a non-profit organisation, ACANA does receive numerous complaints from consumers who have been wronged,” says Joel Thomas, ceo of Stratos Jet Charters Inc. and ACANA 2015 chair. “Many complaints centre on phantom aircraft quotes.”

When consumers learn the truth about aircraft available for charter, the odds shift in their favour. This includes knowing the operational history of an operator, which empowers consumers to make buying decisions that expand their margin of safety.

“One tactic often used by disreputable charter brokers, whose sole focus is to provide the lowest price, is to engage in phantom bidding,” Thomas explains. “Phantom bidding is a truly iniquitous practice used by dishonest brokers who present aircraft pricing for clients' specific routings, dates and times, but one critical element is missing. They don't actually have an aircraft to quote in the first place.”

In situations where brokers engage in this type of unethical, illegal bidding, safety becomes a secondary concern to brokers.

“Without exception, air safety should always be the first priority,” he says. “Unfortunately, in the phantom bidding scenario, bottom-feeder brokers may pair with louche carriers to perform flights or even select planes that lack appropriate performance characteristics.”

To avoid disreputable brokers and their imaginary aircraft pitches, ACANA advises consumers ask questions and request tangible proof of available aircraft.

“Consumers should always demand that brokers provide them with details about the operator that will actually fulfill the flight, the entity that has 100 per cent operational control of the aircraft and crew,” Thomas says. “It's a big red flag when an air charter broker cannot provide such basic information.”

Vetting charter service providers to the max

Despite its many members, ACANA has turned away num-erous companies due to ethics. “ACANA only accepts companies that share the organisation's beliefs in fostering professional and ethical aircraft charter and brokering practices,” says Richard Zaher, ceo of Paramount Business Jets and ACANA 2015 vice president. “For brokers or operators who are seeking easy access to an organisation, for just another logo on a website, ACANA isn't for you.”

Meeting the membership criteria is not easy

“An existing ACANA member company that has demonstrated compliance with the organisation's standards, just one way that ACANA ensures its continued integrity and accountability of membership, must sponsor a potential member,” Zaher explains.

Once accepted, after stringent vetting, companies must follow the tenets and requirements of the organisation. “These include careful and thoroughly defined contract procedures emphasising safety and accountability,” he continues. “This is perhaps the most important way that ACANA has helped to redefine, and in some ways re-image, the role of aircraft charter and brokerage professionals. It promotes responsible self-regulation and oversight in a segment that, arguably, lacked such diligence in the past.”

Zaher, proud of ACANA's accomplishments, says its proactive role has helped define and establish higher standards and better practices. “For our industry, ACANA has raised the bar for the safety, ethical business practices and transparency of the air charter segment overall. This mindset has also allowed ACANA to foster positive and mutually beneficial relationships with the DOT, other federal agencies, and as well with like-minded associations worldwide.

“This has resulted in valuable dialogue between regulators and industry stakeholders. These partnerships help promote our shared interest in making the air charter industry among the safest segments of the aviation industry, without the need for onerous and over-reaching regulation.”