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Al Palagonia, ceo of Apollo Jets, accepts the first ARGUS certification from Joe Moeggenberg

Brokers feel the benefit of certification from ARGUS

March 2, 2015:

One criticism of the charter broker industry is that it has been broadly unregulated, but a new programme of broker rating has been welcomed for its thorough evaluation process. The ARGUS Registered and Certified Broker Programme aims to address the lack of regulation by allowing professional air charter brokers a recognised and respected mechanism to inform aircraft operators and charter consumers of the operating standards they adhere to.

One of the first brokers to achieve an ARGUS certified charter broker rating is Florida-based Stratos Jets. President and ceo Joel Thomas says: “The ARGUS certification process demonstrates a company's credibility, financial strength and organisational processes, its principles, culture and how it serves its client base. It affirms a broker's commitment to air charter safety and best practices over a long period of time.”

He continues: “At Stratos we have long adhered to industry best practices and promote transparency and professionalism as evidenced by our membership of the Air Charter Association of North America (ACANA).” Thomas is currently chairman of ACANA, whose mission is to enhance and foster the air charter industry by promoting best practices and professionalism, while representing members' regulatory interests and educating consumers about the benefits of private aviation.

“During a presentation I was giving at the annual Air Charter Safety Foundation's Safety Symposium, I was approached by Scott Liston of ARGUS to see if we would find value in its programme,” says Thomas. “Upon review, we recognised the value of becoming an ARGUS certified broker and its shared goals of the ACANA.”

Regarding the process of certification, Thomas explains: “The pre-audit was extremely thorough. ARGUS requested financial reports, insurance documentation, organisational structure and policies and procedures manuals that covered operator due-diligence, sales training, trip organisation, human resources and tax and financial reporting. The on-site audit was rigorous and involved in-depth interviews and analysis of senior management, agent competency, experience and knowledge base. A comprehensive review of our trip organisation processes and evaluation of our commitment to safety standards and best practices took place.”

Thomas points out that, having demonstrated competency through ARGUS certification, Stratos has strengthened relationships with existing clients and formed new relationships with consumers looking for long-term service providers.

Transplant Transportation Services Inc (TTSI) is the first medical company to undertake the certification process. Scott Pritchard, president of TTSI, explains that achieving a certified rating further differentiates his company from others in this segment by clearly showing his commitment to safety. He says: “The programme helps to establish formalisation of processes and standards. We already use ARGUS TripCHEQ, which gives us confidence in our operators, and now we are in partnership with an industry regulator whose certification gives a level of assurance to our clients that we have a respected industry third party vetting us.

“The process was not easy, but it was reassuring because we already had many of the required procedures in place. We are honoured to be the first medical broker to achieve this designation. The medical community represents a significant amount of flying. We try to be expert and we always strive to be better.”

Why the need for regulation?

The on-demand charter business has evolved significantly over the last 30 years or so. The overall upturn in individual wealth combined with corporate growth has created a huge need for travelling in unpredictable, secure and time sensitive conditions. According to ARGUS, the business aviation marketplace responded with many initiatives:

  • Numerous new offerings of business jets from the very small to the very large.
  • Fractional ownership of business jets reducing the cost of entrance.
  • Guaranteed block charter offerings in card programmes.
  • Many more companies and aircraft entering the for-hire market through new commercial certificates or moving into large, multi-national, managed fleet programmes.

At the same time, the product itself was being raised to new heights in terms of quality of aircraft, interior, cabin technology, crew training, service delivery and significant improvements in the services received from flight related providers such as FBOs, caterers and limousines. Additionally, consumers were requesting more complex trips and demanding these at short notice without knowledge of the operational, financial or regulatory obstacles that are a part of every trip.

While all of this improved capability was good for the customer as well as the growth of business aviation, says ARGUS, it created an environment where the provider was adding new and inexperienced human resources to manage the demand. During healthy economic times, the significant success of some of the fractional and card programmes, as well as direct charter services, caused such a spike in demand that the charter marketplace was facing a shortage of supply to keep up with demand. ARGUS notes that many commercial charter operators became wholesalers of charter lift to support the insatiable appetite of the guaranteed services market and problems evolved that led to accidents, incidents or illegal operations. This caused concern for regulators, who responded with the threat of tighter rules and laws designed to protect the public and operators.

ARGUS reports that the regulatory community, combined with the efforts of industry associations and independent experts, have developed regulations, laws, standards and more to confirm an aircraft operator's commitment and compliance with legal requirements and best practices. Yet in today's marketplace more individuals or companies, that may or may not be commercial operators of aircraft, are managing the business that is created by matching traveller demand with aircraft supply: the charter brokers. There were few regulations that gave assurance to the marketplace about who it should be doing business with. Groups such as the Baltic Air Charter Association (BACA) and ACANA created standards or best practices for charter brokers, but these are membership-based organisations. However, they have participated closely with ARGUS in the evolution of the standard and are public in their support of it.

Chairman of BACA Tony Coe says: “BACA fully endorses the ARGUS programme and has worked with ARGUS in fine tuning the content. Within the programme, ARGUS has incorporated the complete BACA code of conduct, which all of the association's members have signed and agree to abide by. As our industry is unregulated, the ARGUS programme is an essential component in delivering best practices. It will show to clients, regulatory authorities and industry that broker companies have passed a vigorous test to comply with the requirements of the programme. The ARGUS certification programme brings with it industry standards that have not been seen before, and as an association we are delighted that such a programme exists. All our members will be recommended to participate as soon as the EU auditors are appointed.” ARGUS expects this to take place by March.

Joe Moeggenberg, president and ceo of ARGUS, comments: “ARGUS has tremendous respect for BACA's reputation and influence in the air charter brokerage industry, and feels honoured to receive its endorsement. We look forward to its continued suggestions to improve the programme.”

As senior vice president of Apollo Jets, the first company to achieve ARGUS certified charter broker status, Dean Giasi says: “The charter broker marketplace really needs a programme like this because there is no way to spotlight those individuals not utilising best practices, and to have the ARGUS brand behind it gives immediate credibility and global recognition.”

ARGUS will focus on managing the data associated with each broker as it relates to the 10 standard of excellence. It will also create levels of recognition that allow for a differentiation in the marketplace for companies that want to prove their compliance or demonstrate a commitment beyond the minimum.

Becoming an ARGUS Registered Broker

Applicable businesses will apply for membership to the ARGUS programme and submit documentation that will provide proof of compliance. Member companies will be required to regularly update documentation as changes occur that would have an impact on compliance status. An annual review of the broker's data and documentation will be carried out by ARGUS, resulting in a compliance confirmation or action list for the broker.

Each company applying for ARGUS registered or certified broker status will pledge its understanding, compliance and agreement with the terms and conditions of membership. This will be in writing and executed annually by the company's representative approved by the ARGUS programme manager.

Each company applying will have to demonstrate that it has the appropriate procedure in place to comply with the 10 standards of excellence. In addition, every broker will have to document its standard requirements for the use of any particular charter operator and prove it can perform a compliance check on a trip by trip basis.

In order to obtain and maintain status, requirements set forth for the company and each individual broker must be met at all times or the broker risks loss of status until shortcomings are satisfied. If a registered or certified broker knowingly goes out of compliance, they are required to self-report shortcomings and the plan to remedy them. ARGUS will make the decision with regards to maintaining status during a period of corrective action while monitoring the results.

ARGUS will maintain a publicly accessible list of registered and certified brokers on its web site and each broker will be required to display a click-through banner on its web site to the ARGUS broker confirmation site.

Becoming an ARGUS Certified Broker

In addition to the requirements above, new charter brokerage firms may have to maintain the registered status for a minimum of six months before they are eligible for certified status, at the discretion of ARGUS. Certified status can only be granted after the following requirements have been met:

1. Broker must have no more than one instance whereby ARGUS researched a complaint resulting in a determination of non-compliance within the previous six months. The applicant must be in good standing with regards to its registered status, and any previous suspension must have been restored to good standing for a minimum one-year period.

2. The broker cannot be the broker of record for any charter trip that was involved in an incident or accident within the previous 24 months unless it can provide proof that due diligence was performed before departure that demonstrates all operator and crew requirements, consistent with the customer's standards, were met. In the event the customer did not dictate specific standards, compliance with broker's minimum standards must be confirmed.

3. The broker will receive an on-site audit performed by a certified broker auditor, who will confirm that all requirements are being met on a regular and routine basis. If the broker has operations at multiple locations, at least 51% of the locations will be audited. Additional sites will be randomly chosen by ARGUS.

4. To maintain certified status, an on-site audit must be conducted every two years. A web-based review (ie SKYPE, Webex, GoTo Meeting) of the broker's information may be randomly conducted.

Customer complaint and dispute resolution

A link on the ARGUS certified broker website and the certified broker's website to an email address will allow charter customers, operators or other pertinent parties to initiate questions, complaints or compliments to the broker as part of the requirement for dispute resolution. Trip confirmation sheets and invoices must contain a notice to the customer that they can register any comments via that email address.

Authenticated messages will become part of the brokers' records within the ARGUS database and forwarded to the broker involved. Any message marked as “complaint” will initiate monitoring. ARGUS stresses that it will not act in any capacity on behalf of the broker or complainant during this process. An email will be generated to both parties 30 days later asking if they believe the complaint has been resolved and any complaint not resolved within this period will be reviewed by ARGUS. ARGUS will make a ruling only as to whether or not the broker is in violation of registered or certified broker standards and requirements. This provides no legal bearing on a potential outcome if either party decides to pursue legal remedies to a particular issue, adds ARGUS. However, if the broker is not acting consistent with ARGUS standards, a notation will appear in the official listing on the website that will remain for one year or until the complaint initiator indicates the situation has been resolved. Two incidents within a 12-month period, or a third incident occurring at any time, will cause an immediate change to Does Not Qualify.

“The audit was tough but appropriate for achieving the level of credibility that warrants the ARGUS name. This is a ground-breaking programmeand we hope to see others participate in the near future,” concludes Giasi of Apollo Jets.

 

 Useful contact details from the Handbook of Business Aviation in Europe
ARGUS International Data Services, Ops Consultancy, Safety
Stratos Jet Charters Charter Brokers
Air Charter Association of North America (ACANA) Charter Brokers, Associations
Transplant Transportation Services Charter Brokers
BACA - The Air Charter Association Associations
 
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