COVER STORY • AIRCRAFT MANAGEMENT
How to choose an aircraft manager
The most important relationship for any aircraft owner is with the people managing their aircraft. To find the right one, however, you need to know what you are really looking for and spend time with the team before signing them. Alasdair Whyte reports
COVER STORY • AIRCRAFT MANAGEMENT
How to choose an aircraft manager
The most important relationship for any aircraft owner is with the people managing their aircraft. To find the right one, however, you need to know what you are really looking for and spend time with the team before signing them. Alasdair Whyte reports
YOU ONLY need to do two things to have a fantastic ownership experience. First, buy the right aircraft. Second, choose the right aircraft manager to look after it for you.
The aircraft manager’s fundamental responsibility is operating the aircraft safely and in line with aviation regulations. Strong safety management systems – backed up by third parties like the International Business Aviation Council or Argus ratings – are non-negotiable. But aircraft managers do many, many other things.
The relationship between the aircraft management company and the aircraft owner is arguably the most important in business aviation. Buyers who get it right, will stay as owners and hopefully buy other aircraft. Unhappy owners sell their aircraft.
Culture is king
There is an old saying that the best gamekeepers are former poachers. Michael Moore is now an executive vice president at brokerage and consultancy Essex Aviation in Palm Beach, Florida. He was head of aircraft management at Meridian Air Charter, an aircraft management company, for many years. At Meridian he spent hours trying to convince aircraft owners that they should give their aircraft to him. Now he sits on the other side of the table.
“I was like a kid on Christmas morning the first time the tier one operators were pitching for an airplane we were buying for a client,” says Moore. “These were the companies I had been competing with for years. I was dying to hear what everybody had to say and how they had been selling against me for so many years.”
Moore says that owners should start by not looking at the figures at all. “Frankly the difference between costs is not as big as you think. Some of them do a better job shopping fuel, some of them get better insurance rates or better training rates. But it is not material as such factors usually cancel each other out if you are comparing two or three ‘tier 1’ companies,” he says. “When you buy a $30m asset, you're going spend $3.5m to $4m a year. With aircraft management fees you are kind of splitting hairs. Some will charge $12,000 a month some will be $13,000. The overall difference will not be huge.”
It is an extremely competitive market and management fees have not risen significantly for years. Owners should remember that proposed budgets can change quickly – both if charter demand rises or the aircraft is hit with unscheduled maintenance.
“You need to understand the difference between price and value”, says Richard Porter, business development manager at ExecuJet Asia Pacific in Singapore. “Rather than just looking at fees involved, it is worth understanding where the operator can deliver value – whether that is commercial value or flexibility. Do they have a pool of pilots able to support the aircraft type for example?”
Choosing the manager is one of the most important decisions you will make and you should spend as much time with the operator possible. “Within 15 minutes of sitting down with an owner, both sides should have a pretty good idea of whether the relationship could work,” says Gary Dolski, CEO of Hong Kong’s Metrojet. “For a new owner, it is up to us to make sure that we pass on the right information to make sure that they make the best educated decision that they can.”
Referrals from friends or business acquaintances can be valuable, but every aircraft owner is unique. “Each customer has their own needs and their own expectations,” says Darren Broderick, CEO, Asian Corporate Aviation (ACA). “When I am sitting in an office late at night writing a proposal and, my wife calls and says: ‘Surely you've got templates?’ she has a point. But each client has different requirements, so you are starting from scratch, with each one.”
Andy Priester, chair and CEO of George J. Priester Aviation (and the third generation of his family to run a management company) believes that owners should always visit. “Culture is everything and owners have to find a culture which aligns with what they are hoping to accomplish,” he says. “You need to meet the people you will be dealing with, not just the people selling to you. You also should not just stay in the boardroom. Walk around and pay attention.”
Priester recently had a visit from a prospect who was buying a new Gulfstream. After the meeting ended the owner asked if they could take a call in the conference room. A few minutes later the fire alarm went off. The prospect followed everyone outside and listened hard to how the team spoke to each other. A few days later the client called back saying he had been so impressed by the conversations between Priester’s team that he was choosing them.
“Sometimes, you know, we may not be the right fit, and that's OK,” says Dolski. “We have had instances where when you have the discussion, and we say we’re not the right ones to do this for you. It saves a lot of time and effort on everyone’s part to be able to have those difficult discussions upfront. You want a long-term relationship.”
“Each client has different requirements, so you are starting from scratch with each one,” says Darren Broderick, ACA.
Ticket to ride
Making your aircraft available for third-party charter can contribute towards some ownership costs. You may, very rarely, even make a profit from it. But you need to manage your expectations. Charter demand is unpredictable and changes quickly.
“There are definitely some ingredients you have to have such as an airplane that's popular in the charter market, good availability, priced competitively, properly crewed and in a good location are essential,” says Moore. “If you’ve got two pilots and your plane’s based in the middle of nowhere in Canada, you are not going to get 900 hours a year. If you have eight family members that need to give you an owner approval you are not going to be popular.”
Pretty much all aircraft management companies can help you charter your aircraft out, but some are much more focused on it than others. Executive Jet Management is extremely popular with owners looking for charter because it supplies extra flights to its sister company NetJets. But only about half of its owners make their aircraft available.
“We are not charter dogs,” says one US aircraft manager. “We do not eat and sleep charter. We have a good charter team, but it is not our core focus, that is managing aircraft for owners. If you want 600 hours of charter a year, we are honestly not the right company for you.”
“Culture is everything and owners have to find a culture which aligns with what they are hoping to accomplish.”
Andy Priester, George J. Priester Aviation
Do you want your aircraft manager to also have FBOs like Jet Aviation?
Does size matter?
“There are approximately 15,800 jets in the US. About 3,000 of these are managed by fractionals, the tier one operators and the tier twos,” says Moore. “That leaves 12,000 airplanes out there. With the mom and pops or your pilot doing it. Some of these are great, some are terrible.”
Moore considers companies like Jet Aviation, Executive Jet Management, Clay Lacy and Solairus with more than 100 aircraft under management as Tier One, purely because of their size and ability to leverage that.
All of the biggest have sophisticated safety management systems, accurate billing and 24- hour support. “The client services department of these large operators do an outstanding job and have very happy customers. The tier one operators all offer exceptional products” says Essex Aviation’s Moore. “But some owners want to know they can call the founder when there is a problem.”
Larger aircraft managers have purchasing power for fuel, FBO fees, flight training, insurance and other large costs. “We cannot compete nickel for nickel with them,” says one US operator. “But for a $50m aircraft it is a drop of yellow in a sea of green.”
“Aircraft management is a very personal business. You don’t want to grow into a big monster chain, you want guests to feel they are staying at a boutique hotel where everyone knows their name.”
Marwan Khalek, Gama Aviation
Aircraft management should be a long-term relationship, but your requirements may also change over time.
Aircraft management should be a long-term relationship, but your requirements may also change over time.
Think global, act local
There is also a growing trend for larger companies to split aircraft management into regional sub-divisions – even as they acquire other operators.
George J. Priester Aviation has used this strategy to combine three family run aircraft management companies: Priester Aviation in the Midwest, Mayo Aviation west of the Rocky Mountains, and Hill Private Aviation.
“We hear loud and clear from customers that they want local operators,” says Priester. “But the regulatory and operating burden is rising,” “There are advantages in having a national infrastructure with local resources.”
In Europe, Marwan Khalek, the CEO and founder of Gama Aviation, is using a similar strategy. “One of the reasons that consolidation is tough is that aircraft management is a very personal business. You don’t want to grow into a big monster chain, you want guests to feel that they are staying at a boutique hotel where everyone knows their name.”
Khalek has bought and sold a number of management businesses in the past (including a US joint venture to Wheels Up). He is now looking to build a series of small management companies – with no more than 25 aircraft – with local management. Gama Aviation believes that it can get economies of scale in back-office functions like finance, trip planning, maintenance and purchasing. Khalek adds another simile: “It is like a Michelin Star restaurant – you want a unique maitre d’ but the kitchen needs to be producing a consistently strong product.”
Graham Williamson, an aircraft management veteran who recently joined Gama Aviation, believes there is an advantage in being boutique. “We want to create bespoke operations in different locations like Four Seasons does with hotels,” says Williamson. “We want to develop local presence in combination with our engine room in Farnborough. We want to provide great service, great product and be more focused on small numbers of highly bespoke clients.”
Options, options, options
One way aircraft managers look to differentiate themselves is through other services. Some offer in-house maintenance, hangars, staffing, flight planning, charter, run FBOs and hangars and perform completions. Skyservice in Canada has also recently started offering aircraft tear-downs.
Others limit themselves to aircraft management perhaps with charter and maintenance oversight (in Europe this is known as CAMO – or Continuing Airworthiness Management Organisation).
There is no right answer to this question. Some owners love the full-service approach while others rely on their management team’s relationship with third-party maintenance companies.
“I was like a kid on Christmas morning the first time the tier one operators were pitching for an airplane we were buying for a client.”
Michael Moore, Essex Aviation
You may be the problem
Just as with the tango, it takes two parties to keep the aircraft manager/owner relationship going. When problems arise, it is not always the operator’s fault.
“You get clients saying: ‘I am furious that I cannot use my airplane this week because of X.’ Well, if they sent you several emails over the past nine months saying October 31st is the drop-dead date for this maintenance event and you did not want to put the airplane down or get back to them you cannot complain,” says one veteran aircraft manager. “Nobody is going to fly it next week. It is not the aircraft manager’s fault. You're dead in the water from a maintenance perspective unless you want to fly illegally. It's your problem not theirs.”
Owners who complain that their management company will not let them land at a short runway in bad weather when their friend’s aircraft did, should remember an old aviation saying: “That it is always better to be on the ground wishing you were flying, than in the air wishing you were not.”
Cash flow is often tight for operators. So not surprisingly, owners who pay on time tend to have a better relationship. As one CEO says: “When we say payment terms are net 30, you know we mean days, not months?”
Aircraft management companies rarely fire clients, but they do sometimes celebrate when clients leave. “You know, it's the old 80:20 rule,” says one CEO. “If two difficult customers are going to take up all of your time it pulls you away from all the other clients who you really want to support.”
Is it time to move?
There are millions of people who should change bank but stick with the one their parents helped them open when they were children. The same is true with aircraft owners who stick with the same operator. Loyalty is great, but circumstances change.
“There are some owners out there getting awful service because they believe that their operator owns charter in that region,” says one consultant. “This is never true. No one owns a market these days.”
Sometimes owners should change with their circumstances. Some new owners often use aircraft heavily for the first few months and then look to charter more. Others quickly decide that they want to charter less and use it for their own business more.
Moving can be a hassle if you don’t plan your exit properly. But it can be worth it. If you have found the right management team but still have the wrong aircraft, ask them to work with your aircraft adviser to help select your next one.
When you are choosing an aircraft management company you should not just stay in the boardroom. You should get out and meet as many people as possible.
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JetHouse
Flying the flag for boutique managers
Herve Laitat, JetHouse
THE FRENCH have a good word for it: galvaudé. It means cliched and Herve Laitat throws it out when using the word “boutique” to describe his new JetHouse business, writes Rob Hodgetts.
“Everyone says boutique, but you cannot be boutique when you have 25 or 30 planes, because the management are lost in board meetings and travelling all the time,” says Laitat, the founder of JetHouse, a new Maltese aircraft manager. Belgian Laitat, who was previously the CEO and accountable manager of Abelag/Luxaviation Belgium, intends to cap his fleet at 15.
“My goal is not fleet size,” he says. “Of course, we will be profitable. It’s not a goal to lose money. But my biggest pride is that at Abelag very few owners left. Some of them, I was operating their fourth successive plane. So if you have that as a passion, you can make a living quite decently.”
JetHouse, which is registered in Malta, launched with a single Dassault Falcon 7X in Brussels at the start of 2024. Laitat plans to add another aircraft every six to nine months. “I have good confidence that they will come,” says Laitat, who oversaw a fleet of 25 aircraft at Abelag.
The 15 is “not a magic number”, he adds, but about the level where he and his senior team of eight, with about 175 years’ collective experience in the business, can provide a “boutique” service.
Alongside Laitat as founders are Nicolas Willemot, chief financial officer (CFO) and Tina Boeckx, director of flight operations, both also formerly of Abelag. “It becomes difficult to fulfil promises because it’s always the founder or the CFO, who at some point met an owner and said: ‘OK, we’re going to pamper you’. But when it’s too big, the person feels you don’t follow them in the same way. So, it’s really a matter of time that is driving this number in the fleet.
“We don’t like to disappoint. Of course, sometimes, even the bad weather is your fault but having a client who sends you a handwritten note saying: ‘I’m so happy to have joined you’. It’s what we have in our blood.”
JetHouse’s natural market is Europe, the Middle East and “why not some French-speaking countries in Africa”. But Laitat is not planning to expand for the sake of it.
“If someone was really begging to operate now out of Bermuda, I’m not sure I’m the right person,” he says.
Laitat was at Abelag for nearly 20 years, including for the acquisition by Luxaviation in 2013 and the purchase of ExecuJet in 2015. He left in 2021 with Willemot following closely behind. “Let’s say that it became so big,” he says. “It’s not a criticism, it’s just a fact, it suits you or not.”
He quickly took up running AllianceJet in Malta, but the tide was pushing him towards setting up on his own and in May last year he took the plunge. Knowing he needed his team in place before he could meet with Transport Malta to apply for the AOC, he began ringing around trusted former colleagues and a number left jobs to join him.
Laitat also partnered with Fiona Healy, MD, FCF Assets who “delivered impeccable guidance on all the steps needed to expedite the AOC”. The licence was signed off in seven months in February 2024. “I wanted to have something with an amazing team, and be able to do something without any obstacles, with this passion for service,” he says.
“The beauty of starting from scratch is we had the possibility to use new technologies that have flourished in recent years that are all integrated. It is efficient and helps everyone.”
A lack of transparency is one of Laitat’s bugbears in the industry and he is determined to operate differently at JetHouse.
“The way to keep the loyalty of clients is to always be able to look at yourself in the mirror,” he says. “It’s a small world and in the end, the cost of changing an owner or having plus three aircraft one year, but minus four the next, it’s not efficient.
“There are very few clients and it’s a tough business. Sometimes just to reach for a coffee with an owner takes nine or 12 months.”
Building trust with a client leads to a “fantastic adventure for a long time”, he adds.
Laitat admits that being an entrepreneur doesn’t always come naturally but he is relishing a new adventure with JetHouse.
“Some people are born entrepreneurs, some have to be entrepreneurs by the events of life, you know? But it’s quite fantastic to have this freedom,” he says.
“Within 15 minutes of sitting down with an owner, both sides should have a pretty good idea of whether the relationship could work...”
Gary Dolski, Metrojet.
Aircraft management checklist
Question: Have you met the people you will be working with day-to-day and who will handle your issue if the aircraft has technical problems at 2am?
Answer: There is no right answer to this. At smaller aircraft managers this may be the owner. Large ones will have people on call 24 hours a day.
Q: Where are you planning to fly?
A: If you are looking to do lots of international flights, you may want an operator with a global network or at least experience of operating internationally.
Q: How much are you planning to charter your aircraft?
A: You need to decide if you are going to do this occasionally or whether you need a company that really specialises in this.
Q: Is the operator financially stable/does it have a strong relationship with your aircraft manufacturer?
A: Nearly every aircraft management team is privately owned, so this can be hard to determine.
Q: Does it operate your aircraft type?
A: It’s also worth considering If they already specialise in operating your specific aircraft and have a pool of pilots that can operate your aircraft if needed. Check too where they are based. If your aircraft is in Dallas and their pilots are at Teterboro, this is not really an advantage.
Q: Do you want to use your own pilots?
A: If you already have pilots, how will the operator onboard them? Operators are usually happy to do this, provided pilots meet their levels. “We've had people come up to us and say: ‘I want you to hire my two pilots, they each have a hundred hours on the type,’” reports one operator. “I don’t want to manage that. We're not going do this, and if I lose a client over that it I have no problem.”
Q: How do they track costs and how do they expect payment?
A: A busy business jet gets more invoices than many businesses. Some of these arrive quickly some may come months later. If your aircraft flies over a European country, for example, you will receive the Eurocontrol air navigation charge in the middle of the month following the month in which the flights took place.
Do you want a portal where you can download financial information in real-time or are you happy to have monthly bills? If you are a large corporate that is unlikely to be able to meet a 30-day deadline for payments, are they happy to deal with this?
Q: How do you want to communicate with your management firm?
A: If you or your team want to deal by phone or WhatsApp, you may be less interested in their digital platform.
Q: Are you planning to finance your business aircraft?
A: Banks and other financiers recognise how good aircraft managers protect aircraft investments. They will often have lists of ones that they have audited or recommend – especially on non-US registered aircraft. If the manager that you want is not on their list but has a good reputation, they will often look at adding them.
