Story ID: 501
Argus’s Charter Broker Rating Program Sees Progress
By: Curt Epstein
Caption: After one year in existence, the audit company’s new certification is gaining traction.
Word Count: 730

While ARGUS International may be better known for its charter operator Platinum safety ratings program, in the year since it released its charter broker “certification standard,” the program has grown as anticipated according to company president and CEO Joseph Moeggenberg. “We’ve been very happy with how it has been accepted within the industry,” he said.

Initiated in response to concerns from all sides of the charter industry, from the charter operators, to charter customers and even the charter brokers, themselves, the program has filled a gap, said Moeggenberg. “What we’ve found is that the industry really needed an independent, unbiased, data-based program that confirms if a charter broker is, in fact, a legitimate business,” he told AIN. “There are some real problems happening within this industry. It’s unregulated. A whole new industry group turned up on the scene, and it’s called the ‘bar-stool broker.’”

Equipped with little more than a cellphone, such disreputable brokers have the potential to cause a variety of problems, he said. Customers might show up at an airport expecting to see a modern jet waiting for them, only to find a vintage-1970s Learjet 25. On the other side of the ledger, charter operators report they are not getting paid promptly; and sometimes, not at all.

For qualified brokers, it has become a challenge to separate themselves from the chaff in what is a big industry. “I do know that the air charter brokers are involved in hundreds of thousands of flights per year and the economic impact is in the billions of dollars,” noted Moeggenberg, who gained insight as he conducted research into the segment. “We were taken aback by how much gross revenue they generate.”

The certification standard, launched last year, was established with the help of industry experts, including the British Air Charter Association, which has become one of the program’s staunchest supporters. “We know how to audit companies and how to build a standard,” Moeggenberg said. “What we did was to address all the concerns from the charter customers, charter operators and the brokers. The standard was designed to highlight the best brokers who are using best practices, and our hope is that it drives the non-professionals away from the industry.”

In practice, the standard functions much in the same manner as ARGUS’s charter operator audits. Currently, the program has seven certified brokers who have undergone a successful onsite audit and have met all the standards. It also includes 13 registered brokers, most of whom are working towards certification and have supplied their policies and procedures along with documented proof they are meeting the requirements of their specific jurisdictions.

While the program is still developing, Cincinnati, Ohio-based ARGUS (Booth E066) has noted some trends as it grows. “We expected for the first couple of years to do most of our business in North America, but actually, Europe is becoming our largest market for the audit, which has surprised us,” Moeggenberg said, adding a possible explanation for the discrepancy. “The legitimate brokers are really trying to set themselves apart, because one of the big issues in Europe is grey-market charter. The concern is that some brokers are actually providing lift on aircraft that are not on an AOC.”

Aside from Europe, the program has seen wide geographic distribution, with candidates from Asia, the U.S. and South America. While currently only one auditor is performing the onsite audits, the company has two more who are completing training, one in Europe and the other based in Asia. They are expected to begin conducting their own audits next month.

Cost of the program varies depending on the size of the operation and is determined on a case-by-case basis. Fees range from approximately $5,000 for smaller operations, and up to the $10,000 range for the largest brokers. Each audit covers a two-year period, after which a new audit must be scheduled. In between, however, the charter broker must keep ARGUS informed of its activities.

The fact that it’s a “living standard” is another similarity the broker standard shares with the company’s other products. “The ARGUS Platinum standard for charter operators is always evolving,” explained Moeggenberg. “This certified charter broker standard will also change constantly, because we have to keep it spot on.”