Aircraft management — operation and charter of spare hours

An owner is under no obligation to run an aviation department of their own. Placing the aircraft under management covers the whole of its operation — and, if the aircraft spends a lot of time on the ground, it covers part of the cost as well.

What the operator takes on

• entering the aircraft on the operator's certificate and keeping it airworthy: records, airworthiness directives, the insurance policy
• maintenance: work orders at the maintenance base, correspondence with the manufacturer, fitting the checks around your calendar
• crew for your type: hiring, type conversion, the six-monthly simulator, keeping ratings and duty time in order
• the dispatch side: routing, overflight and landing permits, slots, ground handling at every stop
• purchasing on the operator's contracts: fuel, handling, catering
• selling spare hours into charter, when the owner goes for it

Fuel, insurance and maintenance programmes are bought by the operator on the volume of the whole fleet — the owner of a single aircraft gets them at the same price. That difference eats into part of the management fee.

I am an operator myself, and in my own company the maintenance of the helicopters is delegated to the airline Barguzin under its FAP-285 certificate: holding a certificate of your own for two machines makes no sense. The competence is cheaper to buy from someone who keeps it running every day. For the owner of a single aircraft the arithmetic is the same, only the step up is larger.

The economics of spare hours

An aircraft sitting on the ground still consumes fixed costs. Put it into charter and part of them is covered by other people's flights. But life is being used up too: engine and airframe reserves accrue in step with the hours flown.

So no one can promise a particular percentage of cost recovery — the economics are worked out for your aircraft, your home base and the demand on the routes.

What to look for in a management agreement

• who takes the decisions on flights, and the owner's priority over charter bookings
• how the revenue from spare hours is split and how wear is accounted for
• transparency of purchasing and reporting on every invoice
• the procedure for terminating the agreement and handing the aircraft to another operator

Who it suits

Management makes sense in three cases: the aircraft flies little and sits idle; the owner does not want to run an aviation department of their own; or you need access to the terms that an operator's scale brings — fuel, insurance, maintenance programmes.

It does not suit an owner who wants to fly at any moment without notice and does not want strangers in the cabin. In that case it is more honest to budget for the upkeep entirely yourself and not count on charter to offset it.

Frequently asked questions

How much does aircraft management cost?

Usually a fixed monthly fee plus the variable costs as they arise. The size of the fee depends on the type of aircraft, the home base and the scope of services — it is worked out case by case. Ask for the fee broken down line by line, and ask separately what it excludes and which items the operator bills on top.

How is management different from leasing the aircraft to an operator?

Under a lease the operator pays you a fixed rate and earns on the flights itself — the risk of filling the schedule sits with the operator. Under management the aircraft stays in your zone of responsibility: you pay for the operation and receive the charter revenue less costs and the fee. Management gives you more control and a clearer view of the money; a lease gives you a predictable payment. The choice depends on how much you fly yourself.

What happens to my flight if the aircraft is stuck on a charter?

If the machine is grounded with a defect in another country, your departure slips even with priority written into the contract. Agree in advance at whose expense the operator finds a replacement and how far afield they are willing to look for one, and ask whether they have had such a case and how it ended.

Who pays if a charter passenger damages the cabin?

Usually the insurance policy and a deposit from the charterer, but the limits of cover and the deductible need reading before the first charter flight. Settle separately who pays for the downtime while the interior is repaired and who chooses the workshop. Small interior damage often falls below the deductible, and it is paid for by whoever the contract names.

What happens when the aircraft moves to another operator?

The aircraft is taken off one operator's certificate and entered on another's, and the airworthiness and maintenance records travel with it. The machine does not fly while the handover runs, so the move is usually planned around a maintenance window. Check in your current agreement how quickly the operator has to hand over the documents and how the mutual balances are settled on the way out.

Alexander Filimonov — business aviation: sourcing, acquisition and entry into service of aircraft.