Management companies schedule and oversee maintenance but pass through direct costs, typically with a 5-15% parts markup. Engine programs like JSSI, Rolls-Royce CorporateCare, Pratt ESP, and Honeywell MSP cap unscheduled exposure at roughly $200-$450 per engine hour. Owners should retain MRO approval rights in the management agreement to prevent steering toward high-margin in-house shops.
What does a management company actually do on maintenance?
A management company tracks the airframe and engine compliance calendar, schedules inspections, dispatches the aircraft to an MRO, supervises the work, and bills the owner for direct costs plus a parts and consumables markup. The labor performed by the management company's own technicians on routine items — tire changes, oil servicing, minor squawks at the home base — is typically billed at a published shop rate of $145-$225 per hour. Heavy events (phase inspections, C-checks, gear overhauls, paint, interior) go out to a third-party MRO, and the management company's role shifts to oversight: reviewing the workscope, negotiating the squawk list, approving discrepancies, and signing off on the return-to-service.
The owner pays for everything. The monthly management fee of $10K-$25K covers the scheduling function, records, and CAMP or Flightdocs subscription — it does not cover the maintenance itself. Anyone reading a management proposal should separate the fixed management fee from the variable maintenance pass-through, because the latter is where 70% of the operating budget lives.
How are parts and consumables marked up?
Most management agreements include a 5-15% markup on parts, consumables, and outside services, with some operators running higher on small-ticket items. The markup is justified as compensation for procurement, AOG sourcing, warranty administration, and carrying cost on inventory. On a $400K engine hot section or a $180K gear overhaul, a 10% markup is real money — $40K and $18K respectively — and it is negotiable on larger fleets.
Owners with leverage (multiple aircraft, long-term agreements, or strong charter revenue contribution) routinely negotiate caps: a hard ceiling of 7-8% on parts over a certain dollar threshold, or pass-through pricing with no markup on single line items exceeding $50K. Fuel markup is a separate line and runs $0.10-$0.50 per gallon over contract pricing at the FBO network the operator uses. On a heavy jet burning 300 gallons per hour at 400 hours per year, a $0.30 markup is $36K annually.
Should the owner approve which MRO does the work?
Yes, and this should be written into the agreement. Without an approval right, the management company can route work to its own in-house heavy maintenance shop or to a preferred vendor where it earns a rebate or volume discount that does not flow to the owner. Constant Aviation, Jet Aviation, Clay Lacy, and West Star all operate both management and MRO businesses, and there is a structural incentive to keep aircraft in-house.
A reasonable clause requires the management company to solicit at least two competitive bids on any maintenance event exceeding $75K-$100K, present the workscopes side by side, and obtain written owner approval before authorization. The owner also retains the right to direct work to a specific MRO — Duncan, Standard Aero, West Star, Textron Service Centers, Gulfstream Service Centers, Bombardier OEM facilities — regardless of the management company's preference. Audit rights at owner expense, typically allowing one inspection of invoices and supporting documents per year, should also be standard.
Which engine programs are worth carrying?
For most managed aircraft, an engine program is the difference between predictable operating cost and a six-figure surprise. Rolls-Royce CorporateCare covers BR710 and Tay engines on Gulfstream and Bombardier large-cabin jets at roughly $350-$500 per engine hour. Pratt & Whitney ESP covers PW300 and PW500 series engines common on midsize and super-midsize aircraft at $200-$400 per hour. Honeywell MSP covers TFE731 and HTF7000 series at similar rates. JSSI is the independent option, covering virtually every engine in the business jet fleet, with tip-to-tail programs available on airframe and APU as well.
The economics: hourly rates feel expensive until an unscheduled engine removal happens. A mid-life hot section on a PW308 runs $400K-$600K; a full overhaul on a BR710 can exceed $3M per engine. Programs convert that lumpy capital event into a predictable per-hour charge and, critically, transfer the residual value risk — an aircraft sold off-program trades at a discount of $500K-$2M depending on remaining green time. For aircraft flying 200+ hours per year, the program almost always pencils. Below 150 hours per year, the math gets closer, and some owners self-insure the airframe portion while keeping engines covered.
Who actually controls the maintenance schedule?
The management company proposes the schedule based on calendar and hourly limits in CAMP or Flightdocs, but the owner controls timing within the compliance window. A 24-month phase inspection due in March can be moved into January or pushed to the end of February depending on owner travel. The management company's job is to flag the window 60-90 days in advance, recommend an MRO slot, and coordinate the downtime. Good management companies build the schedule around the owner's calendar; weak ones treat the owner's trips as an inconvenience to the maintenance plan.
Unscheduled maintenance is different. An AOG event in Aspen on a Friday afternoon is the management company's operational test — sourcing the part, dispatching a tech, coordinating with the local FBO, and recovering the aircraft. This is where the value of a national operator like Jet Aviation, Solairus, or Executive Jet Management shows up, because they have technicians or contracted vendors at most major business aviation airports.
What should the maintenance section of the management agreement include?
The agreement should specify the parts and consumables markup with a numeric cap, fuel markup per gallon, shop labor rate, the threshold above which competitive bids are required, owner approval rights on MRO selection, audit rights with reasonable notice, and pass-through treatment for engine program invoices (no markup on JSSI or OEM program billings, which are already at program rates). It should also specify who owns the maintenance records — the owner, always — and require digital records delivered through CAMP or Flightdocs with owner login access.
Termination provisions matter here too. On a 90-day termination notice, the management company must transfer all maintenance records, open work orders, and program enrollments to the successor operator without a transition fee beyond documented labor. Owners who skip this clause discover at exit that records reconstruction costs $15K-$40K and delays the next operator's takeover by weeks.
Frequently asked questions
What does a management company actually do on maintenance?
A management company tracks the airframe and engine compliance calendar, schedules inspections, dispatches the aircraft to an MRO, supervises the work, and bills the owner for direct costs plus a parts and consumables markup. The labor performed by the management company's own technicians on routine items — tire changes, oil servicing, minor squawks at the home base — is typically billed at a published shop rate of $145-$225 per hour. Heavy events (phase inspections, C-checks, gear overhauls, paint, interior) go out to a third-party MRO, and the management company's role shifts to oversight: reviewing the workscope, negotiating the squawk list, approving discrepancies, and signing off on the return-to-service.
How are parts and consumables marked up?
Most management agreements include a 5-15% markup on parts, consumables, and outside services, with some operators running higher on small-ticket items. The markup is justified as compensation for procurement, AOG sourcing, warranty administration, and carrying cost on inventory. On a $400K engine hot section or a $180K gear overhaul, a 10% markup is real money — $40K and $18K respectively — and it is negotiable on larger fleets.
Should the owner approve which MRO does the work?
Yes, and this should be written into the agreement. Without an approval right, the management company can route work to its own in-house heavy maintenance shop or to a preferred vendor where it earns a rebate or volume discount that does not flow to the owner. Constant Aviation, Jet Aviation, Clay Lacy, and West Star all operate both management and MRO businesses, and there is a structural incentive to keep aircraft in-house.
Which engine programs are worth carrying?
For most managed aircraft, an engine program is the difference between predictable operating cost and a six-figure surprise. Rolls-Royce CorporateCare covers BR710 and Tay engines on Gulfstream and Bombardier large-cabin jets at roughly $350-$500 per engine hour. Pratt & Whitney ESP covers PW300 and PW500 series engines common on midsize and super-midsize aircraft at $200-$400 per hour. Honeywell MSP covers TFE731 and HTF7000 series at similar rates. JSSI is the independent option, covering virtually every engine in the business jet fleet, with tip-to-tail programs available on airframe and APU as well.
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