EBACE Convention News

BACA Looks To Cement Charter Brokering Standards

 - May 22, 2016, 11:43 AM
Size and Diversity BACA Membership 2015

The Baltic Air Charter Association (BACA), which is based in the City of London, is exhibiting at EBACE for the first time this year (Booth EO66). AIN met with new chairman Richard Mumford earlier this month to find out why the association is now raising its profile and what it is really about.

“Historically, we represented companies across the board,” he said–meaning all types of commercial air charter, both in business aviation and air transport. BACA is now looking to bolster its presence in commercial air transport as a priority, as it was increasingly being seen as focused on the executive charter market.

“We’re hoping to change the perception that we’re focused on executive charter, while not taking our eye off the executive market,” Mumford said. “So we’re looking to re-engage with organizations like BATA [the British Air Transport Association] and ERA [the European Regions Airline Association], on the charter side. Lots of European airlines have aircraft with spare capacity they want to charter out.”

BACA’s main push on the executive side is its Code of Conduct and its tagline, “Our word is our bond.” Instilling confidence in brokers’ integrity is something that Mumford, who is a lawyer with Stevens & Bolton LLP based in Guildford, UK, has been championing. He envisions BACA approval becoming a recognized stamp of quality. This is imperative, he said, at a time when “the general view is that charter will come under greater scrutiny…and the CAA lacks the resources, so it’s an opportunity for BACA to step up.”

Mumford admits his is a very traditional organization, while pointing to the need to modernize. “We have an opportunity to offer thought leadership in the market, political lobbying, etc,” he said. “We held a symposium around a year ago with our members, who were overwhelmingly enthusiastic. Then we set up a strategy committee and I’ve been elected as chairman–which is unusual, as I’m a lawyer, not a broker. But the reason is, we’re looking at things differently.”

In his early career Mumford was involved in the introduction of regulation to the insurance brokering market. So his experience ties in with what has been mounting pressure over recent years to tighten up scrutiny of the aviation brokers, themselves, with many supporting this move as they have become more “corporate” in recent years. Mumford said BACA would resist full-blown regulation, and to this end is reviewing its Code of Conduct. “First we need to step back and take a look at the breadth of the market, the good and the bad behavior, and then make sure the Code of Conduct is robust and has meaning, and how we should deal with those who don’t comply.”

He said the “ultimate goal” is to create a “BACA badge” that represents reliable quality “that the flying customer” can look to. BACA has tied up with ARGUS International to “incorporate the BACA Code of Conduct into their accreditation system.”

Mumford is quick to point out that this is for the charter market, and there is no intention to step on the toes of the likes of IBAC and EBAA. They are more focused on the operators, he pointed out. “We very much want to work with BBGA, EBAA, etc. So we don’t want to reinvent the wheel…but we will focus on the broker bit.”

“We will aim to raise the standards without adding too much cost or barriers to entry,” he added. “There are good and bad brokers–so we want to encourage the good ones.”

A criticism that is often leveled at the broker market is that “there are no barriers to entry,” admitted Mumford. “But it’s easy to say that just because someone is operating with a mobile phone, they don’t know what they’re doing. That is not always the case, and a lot of them do.” He noted that a lot of the larger, established brokers were offering additional services, however, such as insurance. But he also pointed out that BACA does not want to stifle innovation in the broker market.

Fortunately, it tends to be a small world; “It’s a very traditional market–as is the whole aviation market-so it’s close-knit, and it’s easy to develop a bad reputation quickly. That’s previously served us well­–but greater corporatization and standard levels are being demanded, and it now needs a new solution.”

Mumford’s rise to chairman has been swift. “I have been a member of BACA for seven-to-eight years, but I joined the council only 18 months ago. I believed BACA was a sleeping giant and had a good opportunity.” He would like to see the organization grow, initially by establishing a proper secretariat, increasing its footprint from the sole full-time staff member it has in London at present.

“We have lots of ideas on what we might do–for example we are looking at some sort of formal annual conference.” He suggested that ERA is “in some ways a model for our organization in the future,” with its committees, broad membership including OEMs, and annual general assembly. He is also keen to increase sponsorship from OEMs and other industry participants, with Dassault already coming in to support some of its activities, he said.

Only 35 percent of BACA’s membership is made up of charter brokers (total 76), with operators, insurers, lawyers, handling agents, airports, FBOs and other companies (including one manufacturer) making up the rest of the 220-strong membership.

WingX carried out an analysis of BACA’s membership in February 2016, said Mumford, showing that its members have a total turnover of around €4.2 billion and employ some 7,000. The operator members represent more than 700 aircraft, two thirds of which are engaged in business aviation with the other third being air transport/cargo. It includes 123 “light jets” the rest being large corporate aircraft, and airliner/cargo aircraft–both jets and turboprops.

In 2015 the 71 BACA member operators conducted 68,000 “handling movements” generating an estimated €561 million ($648 million) in charter revenues.

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