Aviation Marketing Intelligence

The funny thing about being a jet owner, is realizing, despite your best efforts, how little you actually know.

The NBAA recently offered a quick snippet of what winds may be blowing chez FAA. According to an NBAA spokesperson:

“The FAA can and may take enforcement action against an aircraft owner if a flight is conducted illegally,” the spokesman said, “and the FAA can and may take action against an aircraft management company that should be operating flights [even aircraft owner flights] under Part 135, but is not.”

What does this mean to the fractional owner? The jet owner? Historically you’d think “well… not much.” After all, you’ve never been ramp checked, and are not likely to cross paths with the POI your poor pilot calls as infrequently as possible.

With the suspension of TAG’s certificate, this universe went upside down quickly and 80+ corporate jets were homeless in terms of Part 135 operations. Naturally a majority of owners were satiated with some basic assurance that they could still fly under Part 91. Namely those that didn’t care for or need the revenue on their aircraft simply said, “as long as I get taken care of, I can wait a few months for another certificate solution.”

But even that now too has caught the eye of the FAA.

What is a jet owner in a management relationship to do? The basic options are simple:

Door #1: Hire a really good private aviation advisor who represents your interests. Have this person work closely with certificate holder and management company so that the dynamics of management contracts, certificate holder expectations, certificate holder options are clearly understood and reflected in the management agreement.

Door #2: Become your own expert. While this sounds insane, you’d be surprised how many jet owners spread their entrepreneur wings (again!) to start their own charter company. They get their own certificate, do their own marketing and build their own revenue pipleline. Why? Because some of the most successful people really are control freaks and nothing spells control like marching to the FSDO yourself to get your own certificate.

Door #3: Capitulate: Rent, don’t own. You can buy time from the fractionals, a jet card or some other source and just accept the fact that when you outsource, you will, at the end of the day, pay a bit more. In the case of aircraft ownership or use however, a bit = a lot of money. So capitulation requires careful considerations and the appropriate level of deliberate ignorance.

One thing we’ve seen time and again is that the best companies (be they charter or management companies) will make it very clearly that if you don’t play ball with their standards they don’t need you. For example pushing crew duty limits, exploiting one set of flight and duty time restrictions (Part 91) vs. a more restrictive set (Part 135) is likely to have a good charter management company show you the door.

Another is the classic mark up on everything, yet with a very low management fee. In the end this translates into sub par charter performance (i.e. less revenue for you) and a charter operator that really likes managing your aircraft. The best relationships usually have a fat monthly fee, with everything passed through at cost. Why not? You might as well know what the going rate is to take care of your aircraft, right?

At the end of the day, the biggest curse (as I’ve repeated often) to our little industry is the fact that there are so many charter management companies. And the reason why there are so many may be traced back to the fact that there are many strong willed pilots, with entrepreneurial aspirations that launch these businesses without realizing that the best thing they could do for themselves and their clients, is to learn to say “no.” By coming from a culture of “yes” at all costs to get the airplane, to keep the money flowing, pilot-entrepreneurs build large, but largely unscalable enterprises with a predictable and constant rate of jet owner turn over.

Saying “no” and not being desperate to get the aircraft on the certificate (and control the flow of information to the aircraft owner) are key ingredients to successful and motivated charter management companies.

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