Choosing an Aircraft Management Company: What to Evaluate

What actually matters when picking a management company?

Three things matter, in this order: safety credentials, fee transparency in the management agreement, and whether the operator's fleet composition matches your aircraft. Everything else — the hangar tour, the glossy deck, the founder's flight hours — is decoration.

Safety credentials are the gate. An operator without ARGUS Platinum or Wyvern Wingman, plus IS-BAO Stage 2 at minimum (Stage 3 preferred), should not be on the shortlist for a $20M-plus asset. These ratings are not marketing badges; they are third-party audits of SMS programs, pilot training records, and operational control. Your insurance underwriter will price the policy partly on the operator's ratings, so the math is direct.

Fee structure is where the actual money lives. A management agreement that buries fuel and parts markups, leaves "administrative fees" undefined, or hands the operator unilateral pricing control on third-party services will cost an owner $150K to $400K a year in invisible margin on a midsize jet. More on the specific line items below.

Fleet match matters because a shop running 60 Gulfstreams and three Citations will treat your CJ3+ as an orphan. Parts inventory, mechanic type ratings, and pilot pools are organized around the dominant fleet. If you own a heavy jet, you want an operator with at least eight to ten of that category in-house.

How big should the management company be?

The sweet spot for most owners is an operator running between 25 and 100 managed aircraft, with meaningful concentration in your aircraft category. Below 15 aircraft, the operator lacks fuel-contract leverage, insurance-pool pricing, and 24/7 dispatch depth. Above 150, an individual owner becomes a line item and service degrades unless you are flying a Global or G650 that generates outsized charter revenue.

The largest players — Executive Jet Management, Jet Aviation, Clay Lacy, Solairus, Constant Aviation — each manage different mixes. EJM has the NetJets parts and fuel infrastructure behind it. Solairus runs a distributed model with regional bases and tends to attract owners who want a named account manager. Clay Lacy is strong on the West Coast and in heavy-iron charter. Jet Aviation leans international and large-cabin. Regional Part 135 operators — there are roughly 1,900 certificated in the U.S. — can deliver better personal service on a light or midsize jet but typically lack the fuel discounts of a national operator.

Ask for the fleet roster by tail number and aircraft type. Ask how many of your specific type they manage. If the answer is fewer than three, expect higher maintenance costs and slower AOG response.

What fees should the management agreement disclose?

Every recurring and transactional fee should be itemized, capped where possible, and subject to owner audit rights. The non-negotiables: monthly management base fee, fuel markup, parts markup, third-party invoice handling fee, charter revenue split, and crew cost pass-through.

Monthly management base fees run $10,000 to $25,000 depending on aircraft category and service scope. That covers the account manager, scheduling, regulatory compliance, insurance administration, and basic accounting. It does not cover crew salaries, training, maintenance, fuel, hangar, or insurance premiums — those are pass-throughs.

Fuel markup is where operators make quiet money. The industry range is 5% to 15% over contract fuel pricing, and some operators run higher on retail uplifts. Negotiate a cap at 7% to 10% and require the operator to pass through their contract fuel pricing on the invoice, not a blended rate. On a midsize jet flying 250 hours a year, a 5-point swing on fuel markup is roughly $40K.

Parts markup follows the same pattern: 5% to 15% standard, with the higher end on rotables and exchange units. Cap it at 10% and require the operator to disclose OEM list pricing on invoices over $5,000.

Charter revenue splits typically run 80/20 to 90/10 in the owner's favor after Federal Excise Tax and broker commissions are deducted. Read the order of operations carefully. An 85/15 split applied before broker commission is materially worse than 85/15 after. Ask for a sample charter invoice with all deductions shown.

How do you verify they will actually run charter well?

Pull the operator's charter revenue data on aircraft comparable to yours and ask for a 12-month statement showing gross charter, deductions, and net to owner per flight hour. The honest operators will produce this; the others will explain why they cannot.

Realistic charter offset on a managed midsize at 200 to 300 hours of third-party charter is $400K to $900K of gross revenue, netting $250K to $600K to the owner after FET, commissions, and direct operating costs. That offsets 30% to 60% of fixed costs on a $1.2M to $1.8M annual midsize budget. Most owner-managed charter does not produce a tax-adjusted profit; the goal is offset, not income.

Ask how the operator allocates charter demand across the fleet. If they rotate fairly and disclose the algorithm, that is a green flag. If charter assignment is at the dispatcher's discretion with no transparency, owners with newer or larger aircraft will subsidize the rest of the fleet.

What contract terms protect the owner?

Term length should be three to five years with a 90-day termination notice for convenience, and immediate termination for cause defined to include safety violations, FAA enforcement actions, and material breach of the fee schedule. Avoid agreements with automatic renewal beyond 12 months or termination penalties exceeding two months of base management fee.

Audit rights at owner expense, exercisable annually, are standard and should not be negotiable. If the operator resists, walk. Insurance should be in the owner's name with the operator named as additional insured, not the reverse — this matters at claim time. Crew assignment should require owner consent for the captain. Maintenance vendor selection on items over a defined threshold ($25,000 is common) should require owner approval.

Get the indemnification language reviewed by aviation counsel, not your general corporate attorney. The standard operator-favorable indemnity in many management agreements shifts liability for operational errors onto the owner in ways that surprise people after the first incident.

What should owner reference calls actually ask?

Skip the "are you happy" question and ask three specifics: whether the monthly invoice ever contained a charge the owner could not identify, how the operator handled the last AOG event, and whether charter revenue forecasts have matched reality within 15%. Those three answers separate competent operators from the rest faster than any audit report.