How to Choose the right Aircraft Management Company for your Private Jet
The ultimate goal of aircraft ownership is to enjoy the freedom, flexibility, speed, comfort, and privacy that comes with owning your own private jet. As with anything, the costs associated with ownership are important to consider, and the revenue provided by chartering your plane— when not in use— can significantly lower your cost of ownership without impacting the value of your aircraft.
While many aircraft management companies may offer similar services, as an owner you should take the time to investigate what makes one company different from another and see which one can provide you with the services and accountability that you need.
Beyond a reputable name and an established aircraft management process, what criteria differentiates one aircraft management company from another? Considering the scope of experience required to properly manage a multimillion dollar business jet, how do you as an aircraft owner (or chief pilot) evaluate and identify the best aircraft management company to support your aviation asset?
First of all you need to determine which selection criteria are most relevant for your situation. Typically, there are some criteria that are common to almost all owners, and there are other issues that are very owner-specific. The goal for both is to avoid unpleasant surprises after the management agreement is signed.
Safety should always be your number-one criterion. If an aircraft management company cannot satisfy you regarding safety, then there is no need to go any further. Here are some questions you can ask:
- What is the company’s accident, incident and Federal Aviation Administration (FAA) violation history?
- If an accident, incident or violation occurred, what did the company change in response to it?
- Is there a Safety Management System (SMS) in place?
- Is there a safety officer position that reports directly to the president of the company?
- Has the company received a 3rd-party audit? For example by Argus or Wyvern and If so, what were the results?
- How does the company reinforce a “safety first” culture in its daily operations?
The size of the aircraft doesn’t really matter in terms of aircraft management pricing. It’s more important how busy the aircraft will be and how much it will be flying. The monthly fee for managing a private jet is about the same across the industry. The difference in actual cost depends on smaller details like pilot salary, fuel and parts costs, training fees, and so on. Startup fees, flight time charges, landing fees, and other “hidden” charges can add up as well. It’s important to get all of the facts before signing on with a private jet manager.
Here are some components that you could expect to see in a standard aircraft management agreement:
- Monthly management fee. This covers all the flight department type operations.
- Flight crew – pilots, benefits etc
- Insurance – based on the hull value and the desired liability coverage
- Flight training
- Hangar, fuel
Offsetting Aircraft Ownership Costs With Charter Revenue
If your primary purpose of buying a private jet is to make a profit, don’t buy a jet. The revenue received from chartering your jet, when not in use, can significantly lower your costs of ownership by up to 80 percent, but owning and chartering out a jet is not a profitable business venture. So the right question to ask is “How much of my fixed costs should I expect to save from chartering out my jet?” Determining whether it is in your best interest to charter your jet demands a personalized analysis of your goals, flying schedule, and type and age of the plane.
A good active aircraft management company could put up to 400 hours per year on a plane through charter. However this higher utilization also means that there will be more overhead and more costs.
In terms of what this additional revenue does to your net costs, it will certainly reduce them, but realistically it is hard to breakeven. The better way to think of it, is, what does it do to your (the owner) occupied hourly rate. So discuss with your aircraft management provider what the financial metrics are that you are trying to reach.
There are several models that can be found between aircraft owners and managers. Typically pilots are dedicated to the aircraft, but the management company may also cross-train the pilot on other equipment. This training benefits everybody involved, since it means that there are other pilots who can fly an owners aircraft if needed.
The larger management companies can work with your existing, qualified crew members or have qualified pilots on the payroll to operate your aircraft. Plus, they can provide complete HR services, including administration of training, payroll and benefits.
Mechanicals & Maintenance
The care your aircraft receives is obviously an important aspect of deciding which aircraft management company will be the right fit. Aircraft management companies with in-house maintenance departments provide the ultimate peace of mind for you as the owner. Knowing that the work is completed efficiently and correctly to reduce costs and downtime to maximize your use and enjoyment of the aircraft.
When maintenance is on-site where your aircraft is hangared, a lot of maintenance tasks can be accomplished around your flight schedule. And when properly administered by your aircraft manager — with substantial maintenance expertise, tooling, and resources— in-house maintenance significantly reduces downtime and lowers costs. Additionally management of your aircraft maintenance programs such as MSP/JSSI for your engines, CASP/HAPP for your Avionics and proper outsight and control of your out-sourced maintenance, repair and warranty will provide a significant savings.
This may seem like a minor detail, but it is a significant one. The best companies will be able to breakdown your monthly costs in a clear and transparent way so that you know exactly what you are paying for. Detailed reports ensure that you have the ability to monitor, track, and review all expenses required for your aircraft. Having transparent communication up front ensures that you build a relationship on trust with your aircraft manager. Which is often one of the most important things to consider when making a selection.
Conclusion how to choose the right Aircraft Management Company
You will want to find the aircraft management company that offers the services you need and will work with you in a way that shows they always have your best interest in mind. Companies built on quality service, trust, and reliability are the ones who will make your investment in a private aircraft worth every penny.
When you choose Privaira to provide aircraft management services for your private jet, you’ll have the best of both worlds. Your business jet will be flight-ready for your private use 24 hours a day, 365 days a year, without the burden of operational complexities or costs from having your own flight department. And in case you are thinking about chartering. We operate your aircraft under our own Federal Aviation Regulation (FAR) Part 135 charter certificate.
Interested in our services? Contact Ryan Levesque directly and we will provide you with a holistic view of your asset and ensure your best interests are protected.