One of the growth tools used by VizStar Inc., a growing aviation charter broker doing business as Celestial Jets, is their hefty commission package. By offering independent contractors and employees the opportunity to make significant sums by identifying and servicing clients, VizStar leverages its marketing efforts and encourages an expanding customer base. It also helps to control costs since money is paid only after needed services are rendered.
Commissions range from 10% to 35% of the cost of the flight, and are estimated to average approximately 17% to 20% of the total flight charge. Commissions obviously depend upon normal business factors such as competition in the applicable market, and basic supply and demand. The company gives initial flight discounts to increase its customer base, and thus commission margins are lower as it ramps up its operations.
If a prospect is generated from the company’s own marketing efforts, then the contractor or employee is normally paid 30% of the commission, as compensation to work with the customer and finalize the transaction. If the flight opportunity originated from the contractor’s or employee’s own relationships, then the employee or contractor normally receives 60% of the full commission.
Revenue is formally recognized once persuasive evidence of an arrangement exists, services have been performed, the sales price is fixed or determinable, and collectability is probable. (In general, the company recognizes net revenue as being the difference between the gross amount paid to it by its customers and the amount it remits to the provider of the chartered flight.)
The company allows customers the right to cancel brokered airline trips up to 24 hours prior to departure for domestic flights, and up to 48 hours before departure for international flights. Payment is due from the customer no later than when the right to cancel expires and revenue is formally recognized once the flight is completed (or scheduled to complete if the flight was cancelled too late). The company accepts advanced deposits from customers as pre-payment for multiple flights in the future, and these amounts are deferred until the right to cancel expires.
With this well thought-out and extremely competitive commission program, VizStar is in an excellent position to increase market share in the growing jet charter industry. According to the FAA: “The demand for business jet aircraft has grown over the past several years. New product offerings, the introduction of very light jets, and increasing foreign demand have helped to drive this growth. In addition, corporate safety/security concerns for corporate staff, combined with increasing flight delays at some U.S. airports have made fractional, corporate, and on-demand charter flights practical alternatives to travel on commercial flights. Despite the hard impact of the recession felt in the business jet market, the forecast calls for robust growth in the long-term outlook, and predicts business usage of general aviation aircraft will expand at a faster pace than that for personal/recreational use.”
For more information, visit the company website at www.CelestialJets.com.
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