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15th of December 2018

Life Style



Charter Brokers Now Have to Be More Transparent With Fliers, According to New Federal Rules

Do you know who owns or manages the charter jet that you’re about to board? Hint: it’s not necessarily the company with which you booked the flight. In fact, if that company is a charter broker, it definitely doesn’t operate the aircraft. If it’s a reputable broker, you already know that; however, beginning in mid-February, all charter brokers will have to make it crystal clear to customers that they are just the middlemen arranging the flights.

In September, the US Department of Transportation—perhaps taking a break from writing regulations covering all manner of new kinds of civil aircraft that are about to flood the sky—announced long-anticipated new rules regulating charter brokers. Collectively the rules are called Increasing Charter Air Transportation Options, and, according to the DOT, they’re designed to “facilitate innovation and growth of the air charter industry while strengthening the legal protections provided to consumers of charter air transportation.”

The rules, which go into effect February 14, establish a new category for indirect air carriers—as opposed to direct air carriers, the companies that own and/or operate the planes they charter. (Most charter companies are also aircraft-management companies, and they charter the aircraft that they manage.) The new rules formally dub indirect air carriers as “air charter brokers,” and they allow these brokers to create transactions for air charter transportation aboard large and small aircraft. In other words, charter brokers will be able to continue doing what they do: book charter flights for passengers on third-party aircraft. The new rules also allow brokers to self-identify as brokers instead of making them obtain a license or registration. So, you won’t have to pass a test or any extensive scrutiny to become a broker. However, if you want to stay in business, you will have to be completely transparent with your customers. This is what’s new. Transparency is no longer an option; it’s a mandate.

According to the DOT, “All solicitation materials and advertisements, including internet web pages, published or caused to be published by air charter brokers shall clearly and conspicuously state that the air charter broker is an air charter broker, and that it is not a direct air carrier or a direct foreign air carrier in operational control of aircraft, and that the air service advertised shall be provided by a properly licensed direct air carrier or direct foreign air carrier.”

The rules also govern signage on the planes themselves: “Air charter brokers may display their name and logo on aircraft provided the name of the direct air carrier is displayed prominently and clearly on the aircraft and consumers are not otherwise misled into thinking that the air charter broker is a direct air carrier or direct foreign air carrier.”

Also, the broker has to disclose any business relationships it has with the direct air carrier, the total cost of the flight, and whether the broker has insurance covering the trip. The rule does not require the broker to have insurance.

What happens if a charter broker doesn’t follow the rules? The DOT says it “reserves the power to alter, suspend, or revoke the exemption authority of any air charter broker acting as an indirect air carrier, without a hearing, if it finds that such action is in the public interest or is otherwise necessary to protect the traveling public.”

The rules have been in the works for more than a decade, since shortly after the 2004 crash of a broker-arranged charter flight that crashed on takeoff in Colorado, killing the youngest son of Dick Ebersol, the chairman of NBC Sports at the time. The high-profile nature of the crash helped to spotlight the confusion among consumers about brokers versus direct carriers. That confusion prompted the National Transportation Safety Board to make recommendations to the DOT concerning charter-broker transparency. In more recent years, as the number of charter brokers entering the market has soared, charter companies that operate their own aircraft have raised concerns about brokers presenting themselves as direct carriers.

The National Air Transportation Association, an advocacy group for the general aviation industry, has offered its endorsement of the DOT’s new charter-broker rules. “For well over a decade the air charter industry has called for better oversight of transactions involving brokers, who typically are not commercial aircraft operators but facilitate charter agreements between consumers and operators,” NATA Regulatory Affairs Senior Advisor Jacqueline Rosser said in a statement released by the association. “These regulations are the culmination of that effort.”

Then again, you could just follow our tips and buy your own jet.

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