You’re Secure With Brokerages

There is something that myself as a broker and other brokers have noticed creeping into our business.

When we, as a broker, book a flight with an operator, we are immediately asked for a proof of payment, even if the flight is some way ahead, which is normal practice and reasonable. As the day draws closer to the departure date, we naturally pay… of course we pay our operators within their terms of business. Not even to mention that we are expected, and do, quickly settle invoices for post flight reconciliations – de-icing, extension fees, extra catering costs, and alike.

Put the shoe on the other foot when we are due a refund from an operator, perhaps, in the instance of a prepayment of a flight that goes mechanical on the day, or another reason that the operator is unable to perform the flight, we naturally agree to return the money to us.

In so many cases though, we are seeing that the money is not returned to us promptly, in fact, in the last few months, we have had to wait for up to 8 weeks for those funds before they arrive… We are told that “management have to approve it”, or “can we hold it on account for your next flight”, or “you need to be set up as a new supplier”, or some other reason that is unfathomable to me as a business who pays people on time, regardless if it is the first time we have paid, or 1000th time we have paid them.

There have also been three instances in the last 12 months at Volanteus; with our friend, Pedro from WorldJets, JetKontor and Africa Avisol, who have gone into administration or have some serious financial issues and can’t repay our refund.

I appreciate that there are some unscrupulous brokers out there, but can anyone tell me the last time a Broker went bankrupt ? We are expected to pay pre-flight in most instances, therefore negating the risk of credit issues to the operator. However, the risk of bankruptcy is far less for a broker than it is for an operator according to the statistics that I have through my years in this industry.

If operators are delaying payments to brokers, then, it makes me think that they might have some financial troubles… Surely, what is good for one, is good for the other… If we must pay what is owed as soon as it becomes due, then why an earth should this be different for an operator?

We obviously do not want to fall out with the operator, however, what else is someone to do if you are owed a significant sum of money for a long time?

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