Who’s going to manage your Business Jet?

Line of business jets

If you are fortunate enough to be able to enjoy the advantages of business aviation (private jet travel) then there may come a time when you decide to invest in your own aircraft. Managing a business jet is a complicated and time-consuming activity so most owners contract this to a specialist aircraft management company.

How should you choose a management company for your jet?

There are two main aspects to management of an aircraft: airworthiness and operations.

Airworthiness Management

Airworthiness Management refers to the activities required to ensure that the aircraft remains safe and legal to fly. My car shows me a message when a service is due. An aircraft is more complex, different systems and components have to be serviced or replaced at different intervals that may depend on accumulated flight time, number of flights or elapsed time since the last service. Each aircraft therefore has its own maintenance programme, and someone needs to take action when each item is due and keep clear records.

Airworthiness management includes the scheduling of required maintenance, but it is much more than this. European regulations define nine continuing airworthiness tasks:

  1. Pre-flight inspections;
  2. Rectification of defects and damage;
  3. Scheduled maintenance;
  4. Issue of a “certificate of release to service” after maintenance;
  5. Analysis of the approved maintenance programme;
  6. Implementing directives and requirements from the aircraft manufacturer or regulatory authority;
  7. Modifications and repairs;
  8. Calculating the mass and centre of gravity and
  9. Maintenance check flights.

If the continued airworthiness of an aircraft is not managed properly then it may not be legal to fly, in some cases it may be unsafe and the value of a very expensive asset will be diminished.

Operational Management

The operator of an aircraft is the person, or organisation, who decides to initiate, continue, divert or terminate a flight. As the owner you’re going to say where you want to go and when, but you probably don’t have the expertise to know if airports have the necessary facilities, if the crew have been properly trained, if you have the right equipment on board, if the weather is suitable, or if your route might take you over danger zones, prohibited airspace or too far from a suitable alternate. The operator must have this expertise.

Regulations require aircraft operators to have a management system including documented policies, defined responsibilities, processes for risk assessment, training for personnel and a quality programme to check compliance with all regulatory requirements. The operator has the responsibility to ensure that flights comply with all applicable requirements to maintain this management system.

If a management company proposes a contract that states that you, not they, will be the operator of the aircraft then this is a clear signal that they are trying to shirk their responsibilities.

Acceptable level of safety

Business jet operations may not be as safe as the airlines. A study by the UK CAA found that the fatal accident rate for business jets was eight times higher than for large airliners[1]. If you are successful enough to afford your own jet, then maybe you’re not risk-averse but will you accept a greater risk to your family and guests than if you booked them on Ryanair?

The first conversation you have with a management company should be about your acceptable level of safety. If you want to achieve the same safety level as the major airlines, then you’ll need to accept the same restrictions.

Compliance

Airline operations are very safe because they are tightly regulated. The regulations for airlines have been developed over decades. Airlines have to show that they will comply with these regulations before they are granted an AOC and are subject to regular audits and inspections by their national aviation authorities. Many airlines are subject to additional audits in order to be members of the International Air Transport Association (IATA).

Most national aviation authorities are short of resources and adopt a risk-based approach to their activities. Business jet operations are perceived to be ‘low risk’ because airline accidents attract greater publicity and public concern than those involving private aircraft. Aviation authority inspectors have little time to supervise business aircraft operations. If the inspectors do find ‘non-compliances’ or safety issues during their supervision activities, then the operator will be informed and given an opportunity to make corrections. These “findings” will remain confidential unless they are so serious that an operator is ‘grounded’ or prosecuted.

You can’t rely on a national aviation authority to ensure an aircraft management company is safe or complaint neither should you be reassured because the company has an approval from their authority. The way to be confident that a management company complies with safety regulations is to commission your own audit of the company’s internal compliance monitoring programme.

Will they tell you ‘NO’?

You need the convenience and comfort of private jet travel, but you also need the operation to comply with safety regulations. Sometimes you can’t have both.

Aircraft suffer technical problems. They break down or items of equipment fail. These failures rarely prevent an aircraft being capable of flight but often mean that the necessary safety levels can’t be achieved, and flight is prohibited. It’s not unusual for business jet pilots to ignore such defects so that they don’t have to tell the boss that they can’t fly.

Airlines have strict rules for flight and duty periods for pilots. Pilots of private aircraft get just as fatigued but sometimes clients expect their crew to fly all night to get them to an important meeting and then fly straight home again because the meeting was cancelled.

The management company you choose must be prepared to tell you that you can’t fly when it’s not safe.

Commercial or non-commercial?

If you will only use the aircraft for yourself and your guests, or if a company aircraft is only used for company personnel then this will be a non-commercial, or “General Aviation” operation. If you are going to offer the aircraft for charter or ask passengers to contribute to the cost of a flight, then this will be a commercial operation (there are some exceptions).

If the operation is to be commercial, then the operator must hold an Air Operator’s Certificate (AOC). The regulations for AOC operators of businesses jets are basically the same as for the airlines. A commercial operator can offer your aircraft for charter to offset some costs.

Regulations for non-commercial operations are less demanding and the operator does not need approval before the operation starts. Keeping the operation non-commercial will save some money and may offer you additional flexibility about the routes you fly, the airports you can use and how long your crew can stay on duty.

Price

Operating a jet aircraft is going to cost hundreds of thousands of Euro every year. You may be concerned about how much a management company will change you, but it shouldn’t be your top priority. Choosing the wrong management company will affect the value of your aircraft and this may outweigh any difference in management fees.

Recommendations

If your top priority safety, then fly with the airlines. If airline schedules cause a problem then there are large, reputable charter companies that operate to the same standards (e.g., NetJets, VistaJet).

If you travel so much that you need your own aircraft, then you should put at least as much time and effort into selecting a company to manage it for you as you do choosing the aircraft. The company you choose should have robust safety management and compliance monitoring processes. It probably won’t be a start-up and may already operate several aircraft of the same type as yours. The management of this company should welcome an external audit before you make a commitment.

[1] CAA Paper 2009/03 states that the fatal accident rate for business jets 1.7 per million flight hours and 0.2 for large western built jets.