Buying an aircraft is no mean feat. Massive investments of time, money, and effort came with the purchase. And you want to work with an aircraft maintenance company who will dedicate as much attention to your highly valuable asset.
Are you in the market for a reliable maintenance and management company? You need to start with the right questions. Here are four of them:
1: Do They Have A One-Size-Fits-All Fee?
The airport maintenance, repair, and overhaul (MRO) industry is massive. It generates $17 billion in annual revenue.
And with over 750 US aviation maintenance and management companies listed in the NBAA alone, a client can expect varied offerings from players in the market. And most providers are built by air charter companies.
But, something to be wary of is that some companies charge a flat rate before even discussing needs.
Different clients have different needs, and a one-size-fits-all fee won’t cut it.
Your Needs and a Tailored Approach
When it comes to fees, one needs to weigh many options and answer questions. What are the destinations? How many flying hours to invest? Am I looking to generate revenue? And am I flexible enough to accommodate such opportunities?
Go for the company who is willing to sit down with their client and learn about their exact requirements to create an individualized proposal. Needs first. Proposal next. Not the other way around.
Remember: even an A1 aircraft maintenance company may not be a good fit for you for a number of reasons. Others may have standards you don’t feel secure about. Some may not need the model you have for their charter operations. And sometimes, an aircraft maintenance company may not have the tailored solution you need.
2: Will The Aircraft Maintenance Company Refer You To Suppliers And Clients?
Looking for an aircraft maintenance company isn’t different from seeking a profitable business to invest in. You want to put your trust and money with a name that boasts a sterling history of service and financial stability.
Running an aviation maintenance and management company comes with a steep price, and to give you an idea, the durable Hawker, with its sizeable stand-up cabin, requires an engine overhaul at 4,000 hours costs $250,000 on average. And that’s just one aircraft we’re talking about.
A Company You Can Trust
You want a company that can handle the 6-figure operating expenses because this helps ensure your aircraft gets the service it needs. The problem, however, is that most management providers are privately owned. They don’t release important financial data.
This complicates research. Fortunately, you can speak with their suppliers and clients instead of asking for financial information.
Ask the suppliers how the company has handled its payables. Have they paid their bills on a consistent and on-time basis? A spotless record with suppliers is a strong indication of financial stability and good business ethics. As for the clients, do they have a pleasant experience working with the management provider?
If You Can, Stop By
Dropping by at their base of operations is also highly recommended. Check out their facilities and have a face-to-face meeting with the company’s representatives.
And most important, you want to look at their safety records.
See if they have been rated by certification bodies like ARG/US, Wyvern, or IS-BAO which audit maintenance records, flight history, aircraft safety, and other benchmarks. And stay alert for any incident or accident reported by the FAA.
3: How Will They Protect Your Investment?
You’ve spent hundreds of thousands or maybe even millions of dollars for an aircraft. The plane can be a revenue generator thanks to air charters. That said, there will come a time when the jet won’t be allowed to take to the skies.
But with the right maintenance and care, a decommissioned aircraft can still hold a lot of value thanks to its modularized parts.
Did you know that second-hand aircraft parts are a hot commodity?
Just about any component of a plane can be used for newer planes. And with second-hand prices way lower than new parts from the manufacturer, it’s no surprise that about $2.5 billion worth of salvaged parts entered the market from 2009 to 2011.
The Aircraft Maintenance Logbook
And speaking of parts, the most expensive yet unofficial part of your plane that you must protect is the maintenance logbook.
Aircraft logbooks are under-appreciated. They’re also often kept in an insecure manner by the people responsible for their storage. But the book is often valued at 20 percent (at least) of the aircraft’s total value, and losing it may result in a diminished value of 20 percent to 50 percent (or more).
As their name suggests, these logbooks contain detailed records of all maintenance done on an aircraft and related equipment. This includes:
- The type, date, and extent of an inspection
- The aircraft’s total time in service
- The name, signature, certificate, and certificate number of the person approving or disapproving the aircraft’s return to service
Without it, proving that a plane and its parts were properly cared for and maintained is impossible. This explains why the book would be valued from $10,000 to $1,000,000. It’s a book you’d keep in fire safe at the very least – not in a cardboard box or plastic bag.
Your aircraft is both a short- and long-term asset, even after retirement.
So when speaking with a maintenance company, ask about how they’ll protect your investment. What steps and precautionary measures do they take? How do they plain to maintain the aircraft? What level of experience and certification do they bring tot he table? How do they safeguard the ever-important logbook that records all of the maintenance done?
4: Are They Willing To Negotiate The Contract?
An essential part of a maintenance and management contract is the management fee.
This is a fixed monthly cost to cover administrative expenses, and the amount varies. Even amongst similar types of aircraft, different companies add different costs on top of the administrative expenses.
For some aircraft owners, this is a source of concern. When assessing fees from different management providers, always be clear on what is and is not included.
Or better yet, speak with a lawyer specializing in aviation contracts. This will ensure everything is in line with the IRS and FAA’s standards.
You can negotiate management fees. It depends on the complexity of handling aircraft operations and whether or not it generates revenue for the company.
If you plan to fly to exotic places halfway around the world and keep charters at a minimum, negotiating for a lower fixed monthly rate is harder as the flights are labor intensive.
However, if you plan to spend only 100 hours for flying and invest 300 hours for charters annually, a lower management fee may be in the menu.
Ready To Work With A Reliable Aircraft Maintenance Company?
There we have it: the four questions you need to ask if you’re in the market for an aircraft maintenance company. But knowing the right questions is one thing. Finding the company who can answer those questions favorably is another.
Would you like to speak to one today? If you do, contact us. We’re here for you.