How can an aircraft owner review management costs and supplemental lift?

Reconcile the current arrangement before requesting competing management proposals. Otherwise, a lower management fee may simply describe a different allocation of costs or responsibilities.

NBAA’s operating-and-leasing guide distinguishes owner-use and charter arrangements and notes that charter compensation may be a fixed amount or a share of revenue. Its 2016 document is useful structural background, not a substitute for current transaction advice. (nbaa.org)

Follow a six-step owner review

1. Collect the evidence. Request 12 months of management statements, flight logs, supplier invoices, maintenance forecasts, programme statements, charter settlements and supplemental-lift invoices, together with the agreement and amendments.

2. Assign every cost. Classify management fees, crew, maintenance, insurance, hangar, fuel, airport services, owner trips, charter trips and other allocations. Mark the contractual basis for each category.

3. Sample invoices back to source. Select high-value, recurring and unusual charges. Check supporting invoices, approvals, credits and any agreed mark-ups or discounts.

4. Rebuild charter contribution. Start with the owner’s contractual entitlement, then identify incremental expenses, revenue shares and related charges. Do not equate gross charter billings with owner benefit.

5. Compare management proposals on one specification. Ask each candidate to price the same services, crew assumptions, reporting requirements, maintenance responsibilities and owner-priority arrangements.

6. Plan transition and downtime. Agree records transfer, outstanding payables, deposits, insurance continuity and supplemental lift before changing arrangements.

Use this proposed exception ledger:

For the next budget, create separate base, scheduled-maintenance and unexpected-downtime scenarios. Price supplemental lift through the charter workflow above rather than assuming it is free or automatically available.