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Is Your Broker Breaking the Law?

Updated: Jun 12

Unfair and deceptive practices your air charter broker may be using to win bids for your upcoming sports team charter flight.

The Code of Federal Regulations has a list of unfair and deceptive practices that are illegal for brokers to use to win business.

Fraudulent Practices

One of the most common fraudulent practices is the misrepresentation or complete lack of representation of a specified air carrier to perform the quoted flights. Brokers were entering into agreements with clients who believed they were getting one thing only to find out after they signed that they were actually being put on a different aircraft or carrier.

To illustrate this, lets say we were talking about a car dealer where you don't actually get to see the car you are buying. You are looking for a luxury four door sedan such as a Mercedes-Benz C-Class and you sign on the dotted line, but when they bring the car out for you to drive home in it... its actually a Volkswagen Jetta. Both four door sedans, both German engineering, but not was was expected nor are they anywhere near the same price range or value. Now in this hypothetical scenario, you would immediately know that something was wrong. But what if you weren't a car person and couldn't really tell the difference between the two? What if the dealership was closing and you didn't have another option? What if you really needed a car to go on a trip later that day? You would either be stuck with the Jetta or you would lose that deposit and would have to scramble to find another dealer or another method of transportation.

How does this apply to you?

You may have ended up in a similar position or you may find yourself in this scenario regarding the procurement of a private charter flight. But the best way to avoid falling victim to this deceptive practice is to protect yourself by knowing the signs.

The regulation reads as follows:

{14 CFR § 295.50} "the following enumerated practices, among others, by an air charter broker are unfair or deceptive practices or unfair methods of competition in violation of 49 U.S.C. 41712:

Representing that a contract for a specified direct air carrier, direct foreign air carrier, aircraft, flight, or time has been arranged without a binding commitment with a direct air carrier or direct foreign air carrier for the furnishing of such transportation as represented.

What to look for when you book your charter flight:

  • Air Carrier Name (including dba)

  • Aircraft type with specific model number (ie Boeing 737-800)

  • Seating configuration (number of seats)

  • Departure times and arrival times that show the scheduled itinerary

What Happened Here?

Brokers were intentionally deceiving their clients. Brokers would offer a bid at a reduced rate sometimes well below market value in order to win the business. Once they were officially awarded the business (with a made up price), signed a contract with the client, and collected payment they would then shamefully beg and bully carriers into honoring this below market pricing. The resulting agreement between air carrier and broker may include aircraft options that do not even match what was originally offered in the awarded bid. This is a classic bait-and-switch whereby the broker has offered the world on paper, but in reality is scamming the end user once they have been contracted.

What should Happen?

Brokers need to be forthcoming with all flight information and carrier/aircraft information. When a proposal or bid is submitted it should reflect current market value by using actual quotes from air carriers plus any service fee from the broker, not speculative pricing. Once a contract is requested by a university, the broker should simultaneously be requesting contract on behalf of that university with the air carrier offered in the bid. In the event the air carrier offered is no longer available for any reason, the onus is on the broker to inform the university in writing and present additional options for replacement. Only after the university has agreed to the changes should a substitute aircraft be used. In which case, the steps are the same. The carrier and broker enter an agreement, with the broker acting as agent for the university, and in turn the university enters an agreement with the broker for the services offered.


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