What Is Aircraft Management?

The scope of services varies by provider and contract, but a full-service aircraft management arrangement covers five functional areas:

Flight Operations

Day-to-day scheduling and coordination of the owner's trips. This includes dispatch, flight planning, weather assessment, FBO coordination, catering arrangements, and ground transportation. The management company is the single point of contact between the owner and the operational execution of every flight.

Crew Management

Recruiting, vetting, scheduling, and supervising pilots and flight attendants. This includes ensuring crew qualifications meet the applicable regulatory requirements, managing currency requirements, coordinating rest and duty time compliance, and handling the employment or contractor relationship. The owner does not deal with pilots directly; the management company does.

Maintenance Oversight

Coordinating all scheduled and unscheduled maintenance in accordance with the manufacturer's maintenance program and FAA requirements. This includes tracking airworthiness directives, managing service bulletins, maintaining maintenance records, coordinating with Part 145 repair stations for heavy maintenance, and managing AOG (aircraft on ground) situations when unscheduled maintenance grounds the aircraft.

Regulatory Compliance

Ensuring the aircraft remains in continuous compliance with FAA regulations governing its certificate basis, any applicable operating rules, insurance requirements, and the management company's own operating certificates if the aircraft is placed on a Part 135 certificate.

Financial Administration

Managing the operating budget, tracking expenditures against plan, processing vendor invoices, providing monthly cost reports to the owner, and in many cases negotiating fuel and maintenance contracts on the owner's behalf using the management company's fleet buying power.

One of the most significant financial levers in aircraft management is the ability to place the owner's aircraft on the management company's Part 135 Air Carrier Certificate and offer it for charter when the owner is not using it.

This is called charter offset or charter revenue sharing. When the aircraft is chartered by third parties during the owner's idle periods, the revenue generated reduces the net operating cost of ownership. In a well-matched program, charter revenue can offset 30 to 70 percent of annual fixed operating costs depending on the aircraft type, base location, and the management company's charter distribution network.

The owner maintains priority access to the aircraft. Charter bookings are scheduled around the owner's calendar. The aircraft must comply with Part 135 requirements when being used for charter, which includes maintenance standards, crew qualifications, and dispatch procedures that exceed the standards required for purely private Part 91 operations.

Important:  Placing your aircraft on charter generates revenue but also increases hourly utilization and therefore accelerates aircraft maintenance cycles. The net financial benefit depends on a careful analysis of the revenue generated versus the incremental maintenance and wear costs incurred. A management company should provide transparent modeling of both.

When an aircraft is managed purely for the owner's private use under FAR Part 91, it operates under the less demanding general aviation operating rules. Maintenance requirements, crew qualifications, and operational standards are set by the aircraft type certificate and the owner's agreement with the management company.

When the aircraft is placed on a Part 135 certificate for charter, the operating standards increase substantially. The aircraft must meet Part 135 maintenance requirements, pilots must meet Part 135 qualification thresholds, and the management company's operations are subject to FAA oversight and spot inspections. Most reputable management companies hold Part 135 certificates and can offer both operating frameworks depending on the owner's preference and financial objectives.

Aircraft management is an outsourced operating model in which a private aircraft owner retains title to the aircraft while a professional management company takes responsibility for all operational, regulatory, and logistical requirements. The management company handles flight scheduling, crew management, maintenance coordination, regulatory compliance, and financial administration on the owner's behalf. Many management companies also offer placement of the owner's aircraft on a Part 135 charter certificate, enabling the aircraft to generate revenue during idle periods through a charter offset arrangement that can reduce annual operating costs by 30 to 70 percent depending on the aircraft type, base location, and charter demand.Which certificate the aircraft ends up operating under often depends on how it is leased, and wet lease vs dry lease sets out who holds operational control in each case.

Management fees are structured differently by each provider, but the typical components are:

•  Monthly management fee: A fixed fee covering the management company's overhead for administering the aircraft, typically $5,000 to $20,000 per month depending on aircraft type and service scope
• Charter Revenue:  Usually split 15%/85% with the management company.  You as the owner can expect to keep 85% of the revenue produced on the aircraft.
• Crew costs: Pilot salaries or day rates, healthcare, training, and recurrent check costs, either included in the management fee or billed at actual cost
• Maintenance pass-through: Most maintenance costs are passed through to the owner at actual cost, with the management company adding a coordination or markup fee
• Fuel: Typically passed through at the management company's negotiated fuel program rates, which should be lower than FBO retail
• Insurance: Either arranged by the management company and included in the fee structure, or coordinated separately

The financial model is most transparent when the management agreement distinguishes clearly between the fixed management fee, costs passed through at actual, and any markups applied to pass-through costs. Always request a clear breakdown before signing.

The cost structure of aircraft management typically includes a fixed monthly management fee ($5,000 to $20,000 depending on aircraft type and service scope), crew costs billed at actual or bundled in the fee, maintenance passed through at actual cost with a coordination markup, and fuel at the management company's negotiated program rates. When a management company places the owner's aircraft on its Part 135 charter certificate, charter revenue is credited against operating costs, providing a partial offset that depends on aircraft utilization, base location, and the strength of the management company's charter distribution network.

Aircraft management is most relevant for owners who:

• Own a private jet but do not have the operational infrastructure to manage it themselves
• Want to generate charter revenue during idle periods without building charter operations capability in-house
• Are considering purchasing an aircraft and want a realistic picture of total operating costs before committing
• Have an existing in-house flight department that is too expensive or complex to maintain at current utilization levels

Management is generally not necessary for fractional share owners (the management is built into the program) or for clients who charter on-demand without owning an aircraft. If you are evaluating aircraft purchase and want to understand how management economics would apply to your specific aircraft type and usage profile, Hogani Jets can refer you to vetted management operators.

Hogani Jets coordinates each charter through licensed Part 135 operators.

Contact Hogani Jets at charter@hoganijets.com or +1-855-660-0573.