Discuss charter intentions before choosing finance and insurance terms. Revenue activity adds operating, contractual and cash-flow questions; projected gross receipts should not be treated as guaranteed debt-service support.
Define the actual arrangement
Identify owner, borrower, operator, manager, intended base, expected owner use and proposed third-party use. Ask aviation counsel and the operating provider to assess the arrangement under applicable rules. Labels such as managed, leased or charter-capable do not establish who has operational control or what permissions are needed.
Confirm lender and insurer acceptance
Give the proposed lender and insurance adviser the real operating narrative. Ask which consents, documents, endorsements and covenants apply. A lender willing to consider one Part 135 arrangement may not accept every structure, and a loan originally evaluated for owner use should not be assumed to permit a later change without review.
Model net contribution transparently
Start from an operator's written assumptions. Separate gross revenue from management fees, crew, maintenance reserves, repositioning, fuel, handling and other obligations. Identify items already included in ownership cost to avoid counting them twice. Show downtime, seasonality and owner-priority scheduling rather than assuming all forecast hours materialize.
Keep a no-revenue case
Calculate the owner's ability to carry fixed costs and debt if third-party contribution is zero or delayed. Ask how increased utilization affects maintenance schedules and program costs. The decision should account for wear, availability and contractual restrictions as well as cash receipts, without promising charter income or automatic tax results.
Illustrative decision worksheet
Illustrative only: assumed charter gross receipts are $500,000, with $350,000 of separately identified incremental costs. The modeled net contribution is $150,000 before any omitted items, not $500,000 available for loan payments. Compare this with a zero-contribution case and have the operating provider verify that expenses and reserves are counted consistently.
Your next-step checklist
- Roles and operating arrangement
- Written consents
- Net contribution model
- Zero-revenue case
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.
- AOPA original aircraft-rate factors · accessed 2026-10-28