Choose and budget a management arrangement that fits the owner's use.
Separate scope from a monthly fee
Ask the manager to list staffing, scheduling, maintenance coordination, accounting, insurance support, hangar arrangements, purchasing and owner reporting. Identify excluded work and charges passed through at cost or with markup. A quoted management fee alone is not the full budget. Confirm who contracts with vendors, holds records, authorizes spending and reports material issues to the owner.
Review control and use professionally
A management relationship, lease and charter arrangement can involve distinct operational-control questions. The FAA's owner guidance warns that calling an arrangement a dry lease does not resolve how it works in practice. Have aviation counsel and the proposed operator evaluate the actual structure and authority. Do not assume a management company can sell charter or apply its operating authority to any purchased aircraft immediately.
Work an illustrative cost reconciliation
Suppose a fictional proposal lists a $6,000 monthly management fee while separately passing through crew, storage and maintenance costs. Annual management fees are $72,000, but treating that amount as the entire fixed-cost budget would omit major lines. If charter income is proposed, show it as a separate uncertain scenario with associated utilization and expenses rather than netting an optimistic figure into the base case.
Read the owner's exit and reporting rights
Have counsel review term, termination, records access, aircraft availability, spending authority, conflicts, insurance and treatment of unused funds. Ask for a sample owner statement that distinguishes reserves, actual expenses, capital work and debt service. Align the manager's assumptions with the lender and insurer before closing, then retain the agreement and budget as part of the acquisition evidence.
Working document to prepare
Create a service matrix showing who performs each task, included fee, pass-through charge, approval authority, reporting evidence and termination handover obligation. Add a separate charter scenario only if appropriately reviewed, with revenue and associated expenses clearly identified. Reconcile the manager's sample statement against the ownership calculator categories. This makes duplicate costs, missing responsibilities and retained owner decisions easier to identify before the agreement becomes a recurring commitment.
Your next-step checklist
- List included and pass-through services.
- Document spending and scheduling authority.
- Separate charter scenarios from base ownership.
- Review records access and termination rights.
Sources & further reading
Primary sources support the relevant facts. Our planning questions and illustrative exercises are editorial analysis; they do not replace transaction-specific advice.
- FAA pilots, owners and operators · accessed 2026-10-28