JET MANAGEMENT • CJI REPORT
Management migraines
Aircraft management companies are in the problem-solving business. Here are some of the biggest that cause the headaches (and some of the remedies). Words: Yves Le Marquand
JET MANAGEMENT
Management migraines
Aircraft management companies are in the problem-solving business. Here are some of the biggest that cause the headaches (and some of the remedies). Words: Yves Le Marquand
CJI REPORT
MANAGEMENT companies are the paracetamol of business aviation. They try to prevent owners’ headaches before the merest frown creases their brow. But what worries the aircraft managers? It can be a complex cocktail of woes with the severity depending on which part of the world the operator is based.
Cultures across continents differ greatly and so do the challenges faced. While US executives are incentivised to buy business aircraft, across the Atlantic that is the stuff of dreams. European operators suffer intense socio-political scrutiny, as well as the threat of extra taxation – a concept that would be almost alien to management companies in the US, Middle East or Asia.
But there are some headaches which send most aircraft management companies reaching for the paracetamol wherever they are based. Some of the most painful include: illegal charter, supply chain and staff retention challenges and the difficulty in securing MRO slots– particularly at busy times such as during the fourth quarter of the year.
Take illegal charter for example. Speaking on a recent episode of the CJI Podcast, Jamie Walker, executive chairman at private jet management and jet card specialist Jet Linx described illegal charter as the biggest obstacle his business faced when opening in new markets.
Founded back in 1999, the Omaha-based firm focuses on a local market approach, with private terminals or partnerships in more than 20 locations. It has found success in acquiring and integrating smaller, local charter operators.
“It’s not illegal charter in the form of per se illegal charter, but the legal charter that exists where you have these Part 91 aeroplanes that are flying revenue trips,” says Walker. “That has been our biggest obstacle in all the markets that we’ve opened.” Some markets are worse than others, but often there is no way to tell until business has been established in a location, he tells CJI.
“It’s an illegal charter market that we’re fighting uphill against,” continues Walker. “On the aircraft owner side, they don’t know that they’re doing it wrong. And on the charter side, those charter clients don’t know that it’s illegal and they don’t know that it’s not as safe.”
Walker says the FAA is slow to step in – if at all. So, it can be difficult to educate owners and charter clients of the risks they face.
“It is very annoying. Our safety belief has always been an open-platform model. We think that should not be the competitive landscape. We believe that attention to safety should be something that we all share together in terms of best practices, explains Walker. He says the industry should work together more to find and share the best safety practices with each other. And, crucially, hold one another accountable to those practices.
“So, when you see illegal charter taking place and you know how unsafe it is, it is very frustrating because it’s a black eye for the entire industry,” he explains. “It hurts all of us.”
Illegal charter is not confined to North America. It’s now problematic in Asia, according to Darren Broderick, CEO of Asian Corporate Aviation Management (ACAM).
“There's a huge amount of illegal charter here and it’s very poorly policed,” he says. “Not just by local regulators, but by the regulator of the particular registry that the aircraft is under.” Key registries active in the region simply don’t have local representation, he says.
Broderick says he has personally taken complaints against certain aircraft to the authorities. “I’ve said to them: ‘What’s it going to take? Are you going to wait until something major happens with an illegal charter?’ Remember, the last thing that usually comes apart or burns is the tail. By then, it's too late, you’ve damaged the reputation,” he says.
Along with other honest operators, Broderick tries to do his bit. “However, we can put as many reports in as we like, but it's up to the regulators to actually act.”
The reality is also true in the Middle East, according to Holger Ostheimer, MD of DC Aviation Al-Futtaim. “Unauthorised or unregulated charter activity does pose a concern in the market,” he says. “It can distort competition and compromise safety and compliance norms.
“Operators who adhere to strict regulatory and safety frameworks, like us, uphold higher standards but face unfair price competition from non-compliant operators,” he adds.
Another headache that can afflict management companies is the challenge of retaining staff.
One of the most pressing issues for operators has been retaining staff, particularly pilots in recent years. However, NJ Correnti, founder and CEO of NICHOLAS AIR says for the past 12 months he has seen the pilot retention issue “finally” settle down. The company has been around 99% staffed on the flight line over the past 12 months.
“I don’t think the problem is over, but I think there has been stabilisation,” says Correnti. “We had a lot of airmen hopping around to different operators or airlines to see if the grass was greener. I hope the industry has learned that it is a big red flag when you get resumes from a pilot in his 20s with 2,000 hours and 10 type ratings.”
A resume like that is a negative and indicates pilots are unwilling to commit to a long-term relationship, says Correnti. “Those guys will not even get an interview at our organisation. It’s not healthy for the industry and sets a bad example for future airmen. I hope other operators adopt the same philosophy,” he notes.
Crewing has not been a problem for ACAM in Asia. “I know a lot of guys are saying it’s hard to get crews. We still don't see that,” says Broderick.
“I don't know whether that’s because a lot of guys like to move out of places like Europe, where it’s cold, and come into the tropics,” he quips. “But it’s not been a big issue for us. MRO and supply chain are our biggest problems.”
For ACAM, lack of manpower, experience and quality of work at maintenance, repair and overhaul (MRO) facilities is causing most distress.
The Aviation Technician Education Council (ATEC) estimated that the pandemic cost the industry at least 5,000 new mechanics who either did not enter the field or left during disruption to the training pipeline. In the US, the number of new aircraft maintenance licences issued in 2020 dropped by 30% compared with 2019, representing the lowest value in two decades.
International management consulting firm Oliver Wyman forecasts a gap of nearly 43,000 to 48,000 mechanics by 2027 in North America, representing at best a 24% deficit against needed personnel.
“A lot of people left the industry and we just don't know where they went,” says Broderick. “We’re seeing a lot of young people coming through. We’re all for training young people, but they lack experience. There’s a shortage of experienced guys to guide these young people. Yet MROs continue to accept the work whilst not turning out the quality we were accustomed to in the pre-Covid world.”
This ‘new normal’ is forcing aircraft management firms to plan for maintenance much further ahead and fly increasingly large distances to get work completed.
“We’re flying a lot further afield for major maintenance, such as from here in Singapore to Australia regularly for large checks. We are also flying to the US or Europe too for maintenance, which is crazy,” he explains. “It is a global issue. All my colleagues, all my competitors agree, it is a big problem for us all.”
Broderick says there is chance things will level out in the next five or six years, once new talent gets up to standard, but that doesn’t solve problems today.
“We're doing a lot more work ourselves today. I have a team of very experienced engineers that work directly for ACAM, and we do a lot of line maintenance ourselves,” he says. “We probably would have put an aircraft into an OEM MRO previously but now think: ‘Let's get this job done ourselves’, even though it might be a bit challenging out on the ramp we get it done.”
Securing high-quality MRO support remains a “strategic priority” for Ostheimer at DC Aviation Al-Futtaim. Although he admits the region has made progress in recent years, competition for skilled technicians and pressure on parts availability continues to be felt across the market.
To solve this the company has invested in its own EASA and GCAA Part-145 certified facility, supporting a range of aircraft including the Airbus A320 family, Bombardier Globals and Challengers, as well as the Dassault Falcon 7X and 900.
“This has strengthened our ability to perform heavy maintenance checks in-house and reduce reliance on external providers,” says Ostheimer. “This capability helps mitigate potential bottlenecks, although the broader challenge of securing experienced MRO talent remains.”
Supply chain constraints
There is an irony to the reality that windshields offer a window into the supply chain struggles aircraft management companies are facing.
For the past three years, Broderick says securing windshields is “an absolute joke”. ACAM has a Gulfstream aircraft for pre-purchase inspection (PPI) but can’t find a window for it. It also has another Gulfstream in Australia with a crack in the wind shield for which it cannot secure a replacement.
NICHOLAS AIR’s Correnti is equally frustrated by the OEM supply chain. From his time working in corporate business, he says he understands the need to show shareholder growth but there must be a balance. “Prioritising profits over your customers’ needs and satisfaction will erode brand reputation, harm revenues and decrease customer loyalty,” he says. Correnti believes supply chain issues are self-inflicted due to “overproduction”.
“During the pandemic, it was Covid, Covid, Covid. It was an excuse. Now, it is supply chain, supply chain, supply chain. I don’t think there is really a supply chain issue, I think there is a lack of good leadership issue,” Correnti told delegates at CJI Miami in November 2025.
Depending on the OEM, backlogs are about 18 months to two years for new aircraft deliveries. These new aircraft are taking many, if not all the parts supply away from the current fleet in circulation, he claims.
Operators of NICHOLAS AIR’s size are “somewhat insulated” from the problem, says Correnti. “It certainly is a dent in revenue, but I feel sorry for smaller operators or somebody that just started out in Part 135,” he adds.
While not an outright advocate of slowing production, Correnti is clear there needs to be a rebalancing of part allocation to support aircraft already in circulation. “You cannot leave current owners helpless with nothing more than false promises and lip service. When you purchase a $14m aircraft, you expect to be taken care of,” he says.
Balancing competitiveness with premium service can prove challenging, says Holger Ostheimer.
Balancing competitiveness with premium service can prove challenging, says Holger Ostheimer.
‘Business liner bonus’
Securing parts for purpose-built business jets has become such a challenge for ACAM that it has begun to encourage the purchase and operation of business liners like Airbus Corporate Jets (ACJs) and Boeing Business Jets (BBJs). Despite the high list price, they are often less expensive to run, says Broderick.
There are more than 12,000 Airbus A320 aircraft in operation, and that number grows to about 19,000 when all orders are considered. By comparison, Gulfstream has a little more than 3,000 aircraft in service across all models.
“ACJs, BBJs – they built thousands and thousands and there are parts available all over the planet. There are mechanics available all over the planet too,” says Broderick. “Plus, the parts and services are at a fraction of the cost of what a traditional corporate jet costs.”
Seven years ago, ACAM had three BBJs in its portfolio. Today, it is one of the largest corporate bizliner operators with a large and growing fleet of ACJs.
Broderick says he can sell a bizliner to a prospective client with relative ease. “When I explain the operating costs, the parts supplies of these other aircraft and even things like simulator training, people are keen to hear more,” he explains. “For example, simulator training on a Gulfstream 550 is about $35,000 for a recurrent versus about $5,000 on an Airbus.”
In the Middle East, DC Aviation Al-Futtaim’s Ostheimer says the biggest ongoing challenge is balancing market competitiveness with premium service standards.
The challenge for operators is to make an operation worthwhile, providing all the resources, expertise and know-how and being able to charge services at the right price point, says Ostheimer.
“Aircraft operators providing aircraft management services are offering rates that are not geared up to profitability and that is a very concerning development for an organisation like ours that is trying to meet the highest standards, deploying expertise and know-how and trying to make things work,” he explains.
Meanwhile, regulatory pressure also presents a headache for DC Aviation. In the UAE, regulatory frameworks are closely aligned with European standards, the country’s General Civil Aviation Authority (GCAA) regulations are based on EASA requirements.
While the operating environment differs from Europe, the regulatory expectations remain equally robust, says Ostheimer.
“Compliance and certification, such as maintenance approvals, safety audits and ongoing oversight, require significant focus and resources,” he notes. “Although we may not experience the same level of regulatory cost pressure seen in some European jurisdictions, adherence to these high standards is essential and ultimately reinforces safety, confidence and credibility across the sector.”
Scrutiny in Europe
Operating in what feels at times like a parallel universe to the pro-business aviation markets elsewhere in the world, European aircraft management companies are eking out a “sorry existence”, Alex Durand, CEO of Saxon Air, tells CJI.
When he started out in the mid-1990s, Durand’s biggest worry was traditional competition. Today, he says, that has changed. “There’s more collaboration in the industry, but operationally it’s cumulative. Death by a thousand cuts. Liability exposure, regulatory burden – and it feels like the floodgates have opened. Small businesses are expected to have an answer for everything. In aviation we have personal liability, solidarity taxes and increasingly complex regulations.”
The lack of a holistic industry strategy means operators are constantly reactive. “There’s no silver bullet,” he adds. Durand says there has been a bureaucratic creep “forever”, but post-Covid and post-Brexit, the “landscape has shifted radically”.
“From a UK perspective, Brexit has dynamically changed day-to-day operations. We now need 27 permit arrangements to travel in Europe,” he says. “That cascades into tax and VAT exposure. At the same time, regulators and national authorities are taking advantage of the perception of a wealthy sector to raise revenue.”
And it just keeps gathering momentum. “A ‘great idea’ like a solidarity tax spreads country by country. We don’t have a strong enough lobbying voice,” Durand continues. “There’s talk of a specific corporate aviation tax in the EU, with Malta holding out. In the UK, small businesses are getting burned by employment and overhead costs.”
Aircraft management margins have always been narrowing, so is there a breaking point for European operators? “You can whinge or do something,” says Durand. “The flip side is resilience. We’re dynamic and entrepreneurial. There’s still demand for what we do, but it’s a thankless existence sometimes. I’m surprised more of us haven’t stopped.”
Durand says the narrative of “private jets” means the industry is an easy scapegoat. “We’re not good at communicating our value – that’s our Achilles heel. We need to get off the fence and be less scared of blowback. If business aviation disappeared, the economic damage would be severe. We need to articulate that collaboratively with better data.”
He says the impact of airport passenger duties (APD), aka ‘solidarity taxes’ should not be underestimated. “Clients might pay it, but the messaging matters. Meanwhile, across the Atlantic, incentives exist. In the US, you’re economically naïve if you don’t use business aviation. That perception gap is huge,” notes Durand.
It is no use dreaming of brighter days, industry must take action to write the narrative if it is to ease the pressure it finds itself under in Europe.
Durand says anti-business aviation lobby forces are “small but clever”. “Most people are indifferent. The more we react, the more we reinforce the narrative. We need to define our own story,” he adds. “Regional airports show how broad business aviation really is. It’s a broad field – air ambulance, military, training, medevac,” he says.
“We need to talk the industry up properly,” says Durand. “Accept responsibility, don’t deny it. We’re custodians of infrastructure – once it’s gone, it doesn’t come back. The next two to five years are critical. We need to stand up and say enough.”
So, while some headaches may be unavoidable, reaching for solutions can dispel the pain more quickly than simply waiting for a happy outcome.
