During a time when careful shoppers might be expected to make every effort to save money, the charter brokerage business has continued to grow, despite the fact that there is nothing stopping consumers from contacting charter providers directly and negotiating their best deal. Brokers clearly serve a purpose, but they are faced with possible new Department of Transportation (DOT) regulations, declining margins and fierce competition within their own ranks.
"Operators are held hostage by brokers," said one charter operator. What is happening is that charter users call multiple brokers, all of whom source the same flight from multiple charter operators. The result is that prices get driven down. What charter users don't know, he said, is that they could get the same price the broker pays by calling that operator–or presumably any other operator–directly. Brokers, he said, make about 5 percent on charters, but often they don't reveal the amount they are paying for the charter or whether or not they are paying the federal excise taxes (FET) required of charter flights. "We're hoping there will be regulations on FET, [perhaps] requiring brokers to pay it," he said.
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