Aircraft management pricing

[rjacobs]

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.

 

[Gulfstream 200]

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.

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:

 

[gret]

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?

 

[rice]

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.

 

[BigMike]

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...

Yeah, that whole deal sounds like a bad idea

 

[gern_blanston]

Agreed. Sounds like an idea thought up by someone who drives around with their foglights on when it's not foggy.

 

[bailout]

There are many advantages to going with a big management company like CitationAir or NetJets. The majority of their growth over the last 2-3 years has been in the managed jet side of the business. They must be doing something right..

 

[Gulfstream 200]

There are many advantages to going with a big management company like CitationAir or NetJets. The majority of their growth over the last 2-3 years has been in the managed jet side of the business. They must be doing something right..

List those "many advantages?"

We already settled the "save money on fuel and training" portion.

 

[gern_blanston]

Well, there's the cool 'XOJet' luggage tags...

 

[rondo]

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.

Stay away from A/C Management Companies. They are notorious for ripping off clients. Remember you get what you pay for.



I suggest find the right people and have them form there own corporation managing your A/C.

 

[ksu_aviator]

What constitutes ripping someone off? Charging a fee for doing a job the owner doesn't want to do? There is a lot that goes into managing an aircraft from tracking maintenance to paying salaries and hangar rent to insurance. Some people just want to dump that off on someone and if they pay a fee for it they are fine with it.

I'm not saying all management companies are honest, but it does seem that some are accusing management companies of being crooked for doing a job the owner wants to delegate. If these owners want to delegate, then let them delegate.

I've not priced many aircraft, but I know the last individual I worked for wanted to charter the aircraft and so he looked into management companies. They ranged from $1500 to $3000 for a 16,000 lb turbo prop (plus expenses like the pilot and hangar). I imagine that the larger the aircraft, the more you'll pay, but I don't know that for a fact.

 

[rondo]

What constitutes ripping someone off? Charging a fee for doing a job the owner doesn't want to do? There is a lot that goes into managing an aircraft from tracking maintenance to paying salaries and hangar rent to insurance. Some people just want to dump that off on someone and if they pay a fee for it they are fine with it.

I'm not saying all management companies are honest, but it does seem that some are accusing management companies of being crooked for doing a job the owner wants to delegate. If these owners want to delegate, then let them delegate.

I've not priced many aircraft, but I know the last individual I worked for wanted to charter the aircraft and so he looked into management companies. They ranged from $1500 to $3000 for a 16,000 lb turbo prop (plus expenses like the pilot and hangar). I imagine that the larger the aircraft, the more you'll pay, but I don't know that for a fact.

I'm not questioning your ethics personally, but the vast majority of these management companies are run by scoundrels.

 

[ksu_aviator]

I'm not questioning your ethics personally, but the vast majority of these management companies are run by scoundrels.

What's your evidence?

 

[rondo]

OK Here we go.

What's your evidence?

OK here we go.

Client pays for hanger and a/c is left out in the sun or bad weather.

Charge client 85K and want to pay the pilot 50k.

Fudge insurance records to get (20k) gear draggers insurable.

Offer clients a cheaper alternative by doing pencil whipped SIC type ratings at the FSDO when no training was ever conducted.

Having crew conduct international flights with no handler.

If mx is in house, robbing the client on labor.

Bending all the rules including safety to keep the client happy. Example. "Left tube is out, just run a reversion. Now go fly into TEB with bad weather!"

Let me know if you need more examples.

 

[rondo]

Lets get back to the fact that there's gonna be multiple owners. Just wait till that Jet goes in for a "C" check?