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Aircraft management pricing

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rjpilot7667

Well-known member
Joined
Oct 8, 2003
Posts
168
I am getting a midsized jet aircraft (with a bunch of partners). I've had a few proposals for management come my way and I'm Interested in how they are pricing, because they are very different. Anyone know how they derive numbers for management pricing? We only want it under part 91 for now.

Thanks in advance for your expertise.
 
What type of services provided are included? Big differences in a basic contract (Hangar) and a full service contract.
 
Part 91? - hire a few good guys, treat and pay them well... and they will manage your asset far better than any "management" company that is ripping you off blind left and right.
 
Gulfstream 200 said:
Part 91? - hire a few good guys, treat and pay them well... and they will manage your asset far better than any "management" company that is ripping you off blind left and right.
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Thats a good idea but then we have people to manage and we want to stay way from that. Too many chiefs not enough indians kind of thing.
 
rjpilot7667 said:
Thats a good idea but then we have people to manage and we want to stay way from that. Too many chiefs not enough indians kind of thing.
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I'm with G200, hire a few GOOD (read experienced with your type of setup) pilots and there won't be much to manage on the people side. Pay them on time, throw them a raise or bonus now and them, make sure they have their health insurance and they'll treat your asset like it's theirs.

Curious, with a handle like "rjpilot", are you BS-ing us all or do you know something the rest of us don't? Not many RJ pilots I know can afford to buy a midsize jet. Mind sharing your secrets?
 
guido411 said:
I'm with G200, hire a few GOOD (read experienced with your type of setup) pilots and there won't be much to manage on the people side. Pay them on time, throw them a raise or bonus now and them, make sure they have their health insurance and they'll treat your asset like it's theirs.

Curious, with a handle like "rjpilot", are you BS-ing us all or do you know something the rest of us don't? Not many RJ pilots I know can afford to buy a midsize jet. Mind sharing your secrets?
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LOL, figured someone would ask that. I've had the SN for many years, when I used to fly RJ's. I still fly and have a few businesses.

I also have 8 other high net worth partners and as for the jet we got a good deal. We think we can sell it in a few years for a profit.

Check put this months pro pilot. Small and mid jet market is still very depressed. Lots of poor rich people out there and we are taking advantage of it. :) as for the secret.... Have rich friends and don't shy away from opportunity.
 
rjpilot7667 said:
Thats a good idea but then we have people to manage and we want to stay way from that. Too many chiefs not enough indians kind of thing.
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If you think you dont have to "manage" your Managememt Company full time.....you are in for a real shocker.They are all crooks.

Nobody looks after your asset more than someone dependent on it for a good living and who answers directly to you.

Either way, its honestly just my .02 from being involved in both sides -good luck with the venture!
 
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You see it time and time again, people are smart enough to earn the amount of money to buy a private jet. Yet they aren't smart enough to realize they are getting ripped off by a "management" company. I'm sure ego has a big part to do with it, I guess they don't like to admit they are wrong to begin with.
 
Eight partners? That sounds like a lot. The things management companies can save you on is fleet discounts such as fuel, sim training, insurance, maintenance etc. In some cases, this can save quite a bit. Of course they charge a fee to accomplish this but its usually worth it.

My advice would be to put this plane under a good certificate (yes, there is such a thing) to get the fleet discounts, and like others have said, hire a good captain to oversee the costs of the operation. Another thing I would do is hire a full time mechanic. This usually pays for itself many times over when it comes to big inspections. If you have a good mechanic and pilot manager, you'll be fine.
 
I'm gonna' have to agree with the G Man on this one: You'll have to manage the management company WAAYYYY more than you'd have to manage a good chief pilot. Plus... Your crazy idea to have 8 partners is going to be much more difficult to manage than a good flight department.
 
RJ, it's like this: Everyone involved with this is going to get their "cut" in some shape or form. A mgmt. company has lots of people involved and therefore lots of hands in the pocket. They try to make up for this by undercutting pilot and maintenance salaries.

On paper it may look like a cost neutral decision and you may think you are done with the employee problems. But in reality by signing on w/a mgmt company you brought more people into the fold. These people are paid less, treated like garbage, and have very little motivation to help you and your group in any way.

A good, happy, and motivated Captain will save you his salary and more in operating costs every year and you will only have to deal with him. A po'd, micro-managed, weak Captain will cost you his salary several times over and will refer you to xxx or yyy or zzz at the mgmt company every time you have an issue.

You decide which is better.
 
Fact...there are good mgmt companies and bad ones. Also a fact...there are good Captains running flight departments and bad ones. Being on a corporate board you won't hear too much good about mgmt companies.

Take what you heard here, get proposals from a couple of mgmt companies (e.g. FirstFlight, EJM, Jet Aviation, Executive Flightways, etc) and compare. Get references and make a decision based on what you need. A third party mgmt company should bring expertise to the process, but a good one costs money. Leaving it in the hands of one individual is risky, especially if that person has a character defect of any kind.
 
I did some cost analysis on this early this year and from what I could tell, at least with the mgmt company I was talking to, it was close to cost neutral when you figure in EVERYTHING(and that list is long), but I was talking to a very respected mgmt company in the city I am in.

However my personal opinion on the matter mirrors most guys on here, hire a chief pilot and do it yourself. Pay him an extra 20-30k and you will get better service. Most of the fleet discount stuff you can get on your own by signing up for various fuel cards and what not. I didnt notice much difference in price between the fuel costs for the mgmt company vs. on our own with a couple of different fuel cards. Same with everything else. Plus you get some guys that will work harder for you because they have a stake in the operation. With a mgmt company hiring a couple pilots for you, they dont have a stake and thus dont necessarily care how things really run.
 
rjacobs said:
I did some cost analysis on this early this year and from what I could tell, at least with the mgmt company I was talking to, it was close to cost neutral when you figure in EVERYTHING(and that list is long), but I was talking to a very respected mgmt company in the city I am in.

However my personal opinion on the matter mirrors most guys on here, hire a chief pilot and do it yourself. Pay him an extra 20-30k and you will get better service. Most of the fleet discount stuff you can get on your own by signing up for various fuel cards and what not. I didnt notice much difference in price between the fuel costs for the mgmt company vs. on our own with a couple of different fuel cards. Same with everything else. Plus you get some guys that will work harder for you because they have a stake in the operation. With a mgmt company hiring a couple pilots for you, they dont have a stake and thus dont necessarily care how things really run.
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Agree!

A 3 pilot, one airplane department can get equal (or better?) fuel/training prices than any management company as everything is highly negotiable, you just have to have people willing to work hard at it....which means pay and treat them well. Amazing concept.

Not everyone, but the majority of your "lead pilots" at management companies would rather take the plane themselves or jump ship to another account. The games played between owner/mgmt co/pilots are horrendous and often lead to quick burnout.

I'm far more interested in seeing how 8 owners, a used midsize jet, a mgmt company, and the desire to turn a profit with info taken from ProPilot magazine works out...:)

Imagine interviewing for a postion and they tell you there are 8 owners?

:crying:
 
Hope it works out.

BTW, virtually all a/c mgmt/charter companies were formed by pilots who started off managing 1 a/c operations. Based on the critical nature of the mgmt company comments, one has to wonder what sent these guys to the dark side?
 
Hmmm, 8 owners and only pt 91 flying??? How many hrs, days, RON's are you planning on flying per year? Then how many pilots are you planning on hiring?
If you go heavy on the flying and light on the crew, you will most certainly need a management company. However that's not how I'd run it.
Simply put, if you're not going the 135 route then staff it appropriately with a chief pilot who can handle the paperwork end of managing the operation and do some OCCASIONAL flying and enough other pilots to do the bulk of the trips and SOME non-flying duties.
The biggest hassle I see with your kind of setup is, who's going to be responsible for pay/benefits of the employees? If none of the high net-worth types wants to bring the crew under the umbrella of their company then you might be stuck with creating some type of aviation company and then having the individual owners fund it but that might require more work from the HR side than it's worth.
Not an easy task.
 

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