There is mounting awareness of the importance of using accredited brokers says Richard Zaher

Broker accreditation: raising standards

Over time the ad hoc air charter industry has ceded to the demands of its major participants to improve the quality of business transacted by those involved in the operational side. Regulation has had a positive effect on safety.

We have talked to brokers about the last remaining unregulated segment of the industry, namely the brokers themselves. Who is looking into their performance? Who is measuring their quality of business? We take a look at the refinement and formalising of guidelines for good business practice.

When British born founder and COO of California-headquartered Le Bas International, Tracey Deakin, first came to America back in 1987 he couldn't understand why there was no standard level of service across companies offering passenger uplift, nor any standard level of expectation from brokers' clients. In the years before private aviation audit company Wyvern and aviation data and management solutions company ARGUS were established, he remembers: “Sometimes crews would turn up in flip flops and t-shirts when we had customers on board.”

Concerned about standards and safety, he started to ask questions at a time when the NBAA itself was looking into these issues. It had concluded that good pilots, with good hours, meant better safety. And if a company had insurance then it probably had a better maintenance record too. These two points formed the premise of Le Bas's own internal pre-booking checking system.

Brokers were pushing for best practices in the industry, and at the time that generally meant improving, standardising and checking operator functions. But lack of manpower meant aviation authorities around the world could not inspect every flight department, so Wyvern and ARGUS were founded, in 1991 and 1995 respectively, to address these issues of safety and transparency.

Later, in 2007, the Air Charter Association of North America (ACANA) came into being, its mission to promote best industry practices and professionalism to air charter service providers. It published its Contract Best Practices guide in 2015 to help its broking members have a more complete understanding of the primary elements of an air charter broker contract, and to provide guidance on best practices when considering those elements. Deakin, who says his early Le Bas standards were an influence on ACANA's guidelines, believes membership of the association is helping to raise standards over the entire industry.

Richard Zaher, CEO of Virginia, USA-based Paramount Business Jets and ACANA chairman, says that in the US: “The awareness throughout corporate aviation of the value proposition in utilising ACANA members has increased significantly in recent years, particularly in the aftermath of a 2005 runway overrun incident at Teterboro involving a chartered aircraft that had been hired through a third party.” And as charter brokers have become more aware of safety concerns, and have taken a more proactive approach towards vetting the operational records of the aircraft operators they work with, operators have increasingly recognised the advantages of maintaining an open and collaborative dialogue about safety.

“Without question, an experienced charter broker offers a significant advantage to clients, particularly as a valuable second line of defence when it comes to ascertaining an operator's safety record,” continues Zaher. “When safety is a priority for brokers, it places additional emphasis on operators to focus on it too. That includes use of third party auditing services to determine how they measure up against their competitors in this regard.”

ARGUS, Wyvern and ACANA are well known in the United States, even from a customer perspective, and they offer similar safety due diligence tools. Adam Steiger, president of Florida brokerage Air Charter Advisors, has seen an increase in his company's overseas representation over the past few years as it expands: “This is really important. For our team, when booking flights outside the USA, we currently have to dig deeper to access data which is still not provided by these systems, and which in some cases is just not available.”

CEO of UK-headquartered PrivateFly Adam Twidell says: “The United States is ahead of Europe generally in terms of business aviation, but Europe follows over a period of time.” The first FBOs, simulators, aircraft development and crew training started in the US, and then they moved across the ocean. “The US industry is four times the size of our market. The customer in the US is much more safety conscious than in Europe. When we have enquiries from our US customers we know they are going to ask us not only how many hours the crew have got but how many hours the crew have on the type of aircraft they are flying, and whether they are trained in a simulator or not.”

Steiger, whose company is a Wyvern broker, adds: “Many of our corporate customers appreciate this as it shows our commitment to their safety. There has been no difference in our due diligence procedures since we received the accreditation as we have always had a first priority of passenger safety. The main advantage is time management. Having access to the Wyvern system means we no longer need to access multiple databases individually for pilot details, and incident/accident history. Everything is compiled and integrated into a one-stop-shop.”

In order to become a Wyvern broker a company must sign off on a pledge stating that it will conduct safety due diligence and commit to running Wyvern pass reports on its customers' trips. It should conduct fair business practices, offer clear and transparent pricing, follow regulatory guidelines and have an internal safety culture.

Steiger believes safety standards separate companies that are here to stay from those that are fly-by-night: “An organisation that has and promotes a safety culture displays to its customers that it is not just about taking their money for a trip, but about developing a long term relationship of trust.” If customers were all educated on the topic they would be aviation specialists, but they are not. “They are experts in their own line of work, hence their success and ability to afford our services. They leave the professional aviation details in our hands. That's why they pay extra to work with companies that have this safety culture.”

Do these programmes go far enough?

The Wyvern guidelines ensure that brokers check the accreditation of operators and, in so far as safety is concerned, that is admirable. There has been no process until now that checks on the competency and professionalism of the brokers themselves. Accreditation has no legal basis as it is not part of a government regulatory programme. Unlike real estate and travel agents, insurance companies and stockbrokers, there are no boundaries to entry to becoming a charter broker. There are no licences or certifications required by law. Anyone can do it; all you need is a cell phone and a laptop.

There are operator standards and aircraft are subject to certification, maintenance and ramp checks. Twidell expands: “As a pilot I have to do checks twice a year and we are heavily regulated on the amounts of hours that we fly. FBOs can now voluntarily submit to IS-BAH regulation, the international standard for business aircraft handling, and they are quickly getting certified. Some of the larger operators won't use a handling agent now unless it is IS-BAH certified, so we are seeing a rapid take up of FBO accreditation.”

On the airfield itself, the driver of the fuel bowser has one qualification to drive the tanker and another to be on an airfield and handle fuel. Catering companies are inspected for hygiene, and if they are delivering on the airfield they too require an airfield driving licence.

The lack of broker certification is an issue of quality of service for customers, and the larger brokers especially dislike this unregulated playing field. As was the case in the US, brokers in Europe are lately addressing this lack of supervision by regulating themselves, but this is an oversight that ARGUS and Baltic Air Charter Association (BACA) are seeking to address.

Bringing broker accreditation to Europe

BACA, a voluntary council, had been looking at ways to address this gap in the market and in 2014 was pleased to be approached by ARGUS to collaborate on the project. Together they looked at the ARGUS broker programme from an international point of view, to make it less US focused, so it would cover all types of charter: cargo, large airliners and passenger. “We tried to make the standard as flexible as possible so as to embrace everyone, large and small, within the broker community, but we had to keep enough substance to give it some sense and value,” explains BACA deputy chairman and ARGUS director of European sales Volker Meissner. ARGUS launched its BACA-endorsed programme in January 2014 and the very first certified broker was US-based Apollo Jets in October of that year. In November 2015 LunaJets in Switzerland became the first online booking platform in Europe to be audited and achieve certified broker status. “We do not try to tell brokers how to do their business, but we try to assess their processes and procedures to meet the required standard,” Meissner explains.

There are two types of standard for the broker to fulfil: those with which brokers must comply and others that are recommended best practice, but not mandatory. Some may not apply if they are outside the scope of a broker's business, for example cargo checks on a passenger broker. Brokers are required to have an operations manual and the management and structure of the company is checked at an operational level. “We go through the process of how the broker procures a charter aircraft and vets the operator; how they check that everything is done in a legal way; how they deal with a customer; do they have an emergency response plan; what backups are in place and how they manage the company so that everybody is doing the right thing at the right time,” says Meissner.

The ARGUS standards comprise two stages: registered and certified. “We will not walk into a company and make an audit without knowing what we are going to find,” he adds, “so we require people to register. They upload their operations manual, details of their management's experience, how long they have been established, their insurance certificates, the BACA code of practice and other required documents into the ARGUS CHEQ (Charter Evaluation and Qualification) system online, and then one of our auditors will assess and compare this input against our standard.” If satisfactory, the company will achieve the registered standard of the ARGUS broker rating.

The company can progress to the audit stage in order to become certified, and auditing is repeated on a two-year cycle in line with most industry accreditations. “It usually takes around two days. We sit with the management team and our auditor does on-the-spot interviews with staff to check their knowledge, and to check that what is in their manual is actually practised on a day-to-day basis throughout the company.”

The auditor may interview anyone from the managing director to a young broker. “It can be a big challenge,” says Meissner, “since some of the companies are not used to having an operations manual.” An operator has to have handed all his manuals in before he gets his AOC. In contrast, for the broker there has been no quality assurance or control and no test of his knowledge.

This accreditation means the broker can say to clients that he is ARGUS certified and endorsed by BACA. He must get the message to his client that this is a reflection of good business practice, and it can be checked independently: BACA will feature certified audited brokers online on its front page and ARGUS too will list these brokers on its web site.

America and Europe's first certified brokers

At the time of writing, Apollo Jets, Stratos Jet Charters, ONEFlight International, R & M Aviation and Transplant Transportation Services in the US are certified, while in Europe it is LunaJets and PrivateFly. Both European companies particularly reported good accreditation experiences.

“Going through an audit and looking at a company's procedures and processes may flag up that it does things right but has nothing written down,” says Meissner. The ARGUS broker accreditation attempts to bring airline safety practice to the business aviation market. ARGUS may find some non-compliance with its standards, but the audit offers the chance for an objective eye to look over these processes and suggest how things can be improved. The brokerage is given time to make changes and close any findings after the audit, and can learn to evaluate those things itself in the future.

“Accreditation allows you to cover your back,” he continues. “When something goes wrong, even if the contract says you are the broker, an intermediary, and the problem is the responsibility of the operator, you will attract the attention of the legal department. However, if you can demonstrate due diligence, because you have it all written down, and you document all your processes to prove how you operate, and it is up-to-date because it is audited by a third party every two years, then you are in a much stronger position.”

Twidell credits his military background with his approach to setting up PrivateFly eight years ago. He had written operations manuals and checklists of how to carry out business from the start, so much of the backbone of the audit work was already done. “One element for me is that we are never going to reach perfection. We are continuously going to improve, and so that's why I welcome the auditors' comments and we will continue to drive the business forward with new procedures,” he says.

The process brings value to the whole team

“From a team perspective I think it was really significant because in an unregulated market there are no qualifications for individuals,” Twidell continues. “So for all of the team to know that they were going to be interviewed about their knowledge of the industry and company procedures was really inclusive; not only did the company pass but each individual within it too. The two auditors had full access to the bookkeeper, the tech team to talk about data security, the marketing team to see how we were messaging what we were selling, down to how we handle flights on the day.

“We answered questions about how we accredit our aircraft operators, what we do when the weather is not suitable for a flight, what our procedure is for when a customer is not happy and how we handle complaints. ARGUS went through the entire company accounts with the finance team to ensure our financial viability. Every part of the business is involved in the audit.”

ARGUS broker accreditation has no legal standing and costs money, so why do it?

Wyvern and ARGUS are private, third-party companies, bringing with them extra expenses and pledges that many brokers in the industry might shy away from. There is no legal requirement to be registered or certified. Neither is there any legal requirement for any business aviation operator to have, for example, an ARGUS, IS-BAO or Wyvern rating. But professionalism within the industry has risen as a result of having these standards in place.

Certification cannot be done free of charge. “We have undergone more than three years of development work, the auditors have to visit the companies and there is considerable admini-stration work for analysts, data maintenance and quality assurance,” explains Meissner. “But the cost is reasonable and the return on investment is good.”

“We do not require ARGUS brokers to only use ARGUS rated operators, that would not be competitive,” he continues. Neither would it be practical if there were no rated operators near the required departure airport. “We also do not require the broker to use our charter operating vetting system. But they must have procedures and systems in place to ensure the flight is safe and legal for the client.”

ARGUS believe brokers, like operators, will undertake the accreditation process in order to show that due diligence is done. It's not just a certificate to hang on the wall, it means something and it should create an effective broker organisation in which to conduct safe and legal flights for clients in the ever changing and increasingly challenging world of aviation.

What does accreditation tell clients, operators or the industry generally about the company?

“With the exception perhaps of corporate customers, most pass-engers are unlikely to realise the meaning of these accreditations,” says Steiger. But the spread of knowledge starts gathering momentum as the first certified brokers talk to their customers and to the wider market. Twidell adds: “Just as they would not use an unqualified accountant or doctor, so clients will insist on safety standards being applied throughout the whole of the business aviation industry. It's just a process of education.”

A broker who is ARGUS certified is endorsed by BACA and the accreditations can be checked independently.

Global coverage underway

The ASA Group is currently the only broker in Asia that is ARGUS, Wyvern, BACA, IS-BAO, and IS-BAH accredited. Director and general manager of ASA Thailand Julie Ambrose says: “We are continuously working to set the safety standards in the industry. The certification processes are all different, but worth the work, time and dedication to complete. I believe we are getting more business due to the ratings we have as clients are becoming more and more aware of the safety programmes in the industry.”

All have safety and legality as their first priority, but Ambrose adds that as the air charter industry is wholly unregulated these standards help to maintain its integrity and to instill confidence to clients: “If regulations were in place and applied for all brokers, it would lead to greater consistency and a higher level of operational standards.

“The broker accreditation shows our commitment to providing quality, safety and customer service of the highest order to our clients, and also shows our suppliers, the operators, that we are a committed and serious broker.”

Ambrose is clear that the market needs a higher level of regulation where safety and accreditation are paramount. The FAA may be close to regulating brokers in the US, but business aviation brokerage has been exempt from government regulation, and in an unregulated market there will be wide variety of standards of operating practice. “The ARGUS rating,” says Twidell, “is a blueprint of how ARGUS thinks brokers should be processing an enquiry, how they select which aircraft to use. ARGUS has a template and it is flexible around it, but it wants to see that company procedures are in line with proper business aviation practices.”

Is this the best way to go forwards?

In tandem with education, the introduction of certification policies is a way to ensure the industry is in the best hands possible in the future. There is no licence to broker, yet, but the voluntary ARGUS accreditation is already well regarded by aviation authorities and by those in the US who are frustrated with the amount of unsafe charter carried out.

Zaher adds: “Brokers should also recognise that safety should not be an awkward conversation, but rather an essential subject to address with prospective clients. Even the most common terms associated with these checks; ARGUS, ACSF, Wyvern and IS-BAO, may seem quite intimidating to the uninitiated, unless they are using a qualified broker to make sense of it all.

“It's also important to realise that such safety criteria should not be the sole domain of auditing services; brokers may also apply these or similar standards to the operators with whom they do business. Such real-time evaluations of safety on a per-trip basis, and complete transparency with clients regarding minimum standards, are key to increasing the margins of safety, while also increasing client recognition of the value that a charter broker and operator are able to provide by working together.

“Brokers must recognise and properly utilise the resources available to them in making their own determination about safety. That is why ACANA requires Part 135 operators and brokers to participate in third-party safety audit programmes. Not only will they likely find the added costs to be potentially offset by additional business received as clients see that safety is the number one priority in the aircraft charter industry, but they will also better understand the added value that ACANA services provide to them.

“The process of chartering a private flight should never be viewed as casually as hailing a ride to the airport,” says Zaher. “It's important enough to require a dedicated broker to closely plan, organise, and manage all aspects of the experience, including safety.” And to be able to prove that he is doing so.

Over and above US guidelines, the ARGUS broker rating leans towards matching the regulatory procedures that operators have to undergo. And as the industry has already seen, professionalism among operators has risen as a result of having these standards in place.

Companies use these standards to show their customers and their competitors that they are doing more than what is required by the legal authorities of each nation and that those efforts are validated by an independent third party. “It gives them an advantage,” says Meissner, “to diversify, to show due diligence and to distinguish themselves from the competition.”