Proper aircraft management is complex and highly regulated, leading most personal aircraft owners to contract with management companies. By partnering with a private aviation management company, aircraft owners elect to have a professional and experienced team manage their aircraft’s daily operations and maintenance. Given the expertise required to operate personal aircraft safely, aircraft owners should have high expectations of the management company they choose.
Aircraft owners must determine if the aircraft management company they choose exceeds services such as aircraft maintenance and dispatch so that safety is never compromised and costs are effective. An air-tight aircraft management agreement is necessary to ensure you partner with a reputable, experienced, and professional aircraft management service. The following are key aspects to focus on when reviewing your aircraft management agreement.
Aircraft Records Management
Aircraft records possession and management are an essential part of personal aircraft ownership. The management agreement should not include language that allows the company to withhold aircraft records from the owner for any period for any reason. The industry standard is that at all times, the owner owns the aircraft records, shall have access to these records, and may obtain possession of these records for pre-buy inspection at any time.
Payment Terms
Payment terms should be reasonable and consistent with the owner’s ability to comply within an ordinary course of business. Owners must ensure that any extraneous fees or charges are clearly stated in the management agreement.
Charter Usage Of Aircraft
If the aircraft in question is going to be chartered, the management agreement must be explicit and fully disclose how profits from the charter will be distributed. Any attempt at less than transparent distribution terms should be clarified before signing the agreement.
Storage Of Aircraft
The management agreement should be explicit on how and where the aircraft will be stored at all times, including home base and away from home base.
Scheduling Arrangements
As the aircraft owner, you should be concise with the management company on how your flights will be arranged and scheduled. Ensure that language in the management agreement is consistent with how you intend to use the aircraft and what should be done in the event of scheduling issues.
Aircraft Crew
The management agreement should clearly state crew qualifications, who is responsible for hiring and employing the crew, and hiring and firing protocols. Additionally, the management should have some representation of background checks, drug testing policy, and screening process for all employees.
Aircraft Maintenance
Aircraft maintenance should be specifically outlined in your management agreement. Ensure the contract has language that if maintenance exceeds a certain amount, prior approval from the aircraft owner should be required.
Limitation Of Liability And Indemnification
Most aircraft management agreements include specific indemnification and liability provisions that should be reviewed carefully before signing. Understand these limitations and how they may affect you as the owner in the event of an accident or incident involving the aircraft, passengers, crew, and management company.