Working with a management company
It can save you time, money and headaches–but only if you follow these steps
By James Wynbrandt - February 1, 2010
Managing a multimillion-dollar aircraft isn’t just another chore, it’s a full-scale business–a business many owners want help with. “We’re overwhelmed right now,” said Scott Phillips, whose company, Jet 1 Charter, provides management and charter services in Naples, Fla. “We have a lot more people asking us to manage airplanes, whether for Part 135 [charter flights] or Part 91 [private flights].”
Robert Seidel of Jet Aviation, a business aviation services provider at New Jersey’s Teterboro Airport, echoed Phillips’ comments: “We have been inundated, almost unable to manage inquiries and requests for proposals.”
Among the factors driving the demand: previously flush owners and those now flying fewer hours want a management company to charter out their aircraft to generate revenue; corporate flight departments are being pressed to demonstrate more fiscal responsibility; and former charter customers who have been drawn to ownership by historically low aircraft prices need their new purchases managed.
Many flight departments are capable of managing their own aircraft. For other owners, a certain level of outside stewardship makes sense because a good management company can offer considerable capabilities, experience and economies of scale. Such a management company will have expertise “in all of the domains required to protect the owner from risk, reduce his costs, maximize his revenue, protect his asset and provide him with the service he expects,” said Scott Ashton, chief commercial officer of Gama Aviation in Stratford, Conn.
Here are six key steps to forging a strong management relationship:
1. Define your goals. If you want help managing your aircraft, start by defining your management goals. How many hours per year do you intend to fly, and to what destinations? Do you want to generate charter revenue? If so, how many hours, and how flexible are you in changing your schedule to accommodate charter opportunities? Once you’ve answered these questions, it’s time to look for companies that can deliver what you need.
2. Find the right management company. There are hundreds to choose from. More than 750 U.S. management companies are on the National Business Aviation Association member rolls (data.nbaa.org/prodsvcs/directory/search.cfm), though some sell management software or other products rather than management services. Most management service providers are arms of charter operators, and the two operations work in tandem. Flight department staff, fellow aircraft owners, aircraft brokers and charter companies may be able to point you to excellent candidates for the job.
“A good management company will take time to sit down with the prospective client, will understand the client’s needs and will come back with a proposal and say, ‘Here’s how I came to this number,’” said Michael Moore, director of aviation sales at Meridian Teterboro. “Be wary of anybody that’s got a set management fee and people who can give you a price without talking to you.”
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