This area of our website is for aircraft owners that are happy where their aircraft is placed and have no interest in moving it, or changing the current deal. If you’re happy with your current deal, keep reading…
Typically when an aircraft is placed with a charter operator, or with a Part 91 management company, or you just have your pilots running your aircraft for you, a great deal of paperwork and some very hefty monthly reports should be or are getting generated for the owner. These reports can literally be in excess of 50 pages in some cases. Sometimes, you’re getting a check, and in other cases, you’re writing a check each month. How much transparency do you have with your charter operator and how much of your billing is accompanied by TRUE COST BACKUP DOCUMENTATION?
You most likely have your accounting department review the bills, and unless there’s a huge, blatant, glaring error, the monthly reports get filed and business moves forward as usual.
Your Gulfstream burns about 500 gallons of fuel per hour. Paying a dollar MORE per gallon than you should have, is a $500 per hour mistake. Fuel prices change weekly, competitive and contract fuel shopping is a must on EVERY SINGLE TRIP. Fuel is your single largest hourly operating expense. Fuel must be shopped, and vendors must be held accountable to their quoted prices.
How many empty, unpaid legs was your aircraft flown last month? Was your aircraft discounted on any trips, directly affecting your bottom line? Were you paid for every single flight, or was one accidently left out? What controls do you have in place to manage this aspect of your agreement?
Was your maintenance cost as forecasted, budgeted, and planned for by the operator or your pilots? Is the Operator marking up your parts and other maintenance costs? Was the aircraft taken down and brought back up as forecasted and planned by the operator. Does your accounting person know the difference between a $15,000 aircraft part and a $150,000 aircraft part? What controls do you have in place to manage this aspect of your agreement?
There are potentially over 40 separate line item costs that be incurred each time your aircraft is operated by your charter operator or just flown by your pilots. The Charter agreement between you and the charter operator should spell out, line item, by line item, who is responsible for which costs. Are the costs that you’re responsible for being passed through to you at true cost or are they being marked up. If they are being marked up, what controls do you have in place to manage this aspect of your agreement?
A Gulfstream will typically be on an engine program, an APU program, and an Avionics program, and will also have multiple other subscriptions for pilot documentation, aircraft databases etc…
Correct reporting for both the engine program(s) and the APU programs is EXTREMELY CRITICAL. Should a claim arise requiring your engine or APU program to pay for a covered repair, if the reporting is in arrears, or not correct, your claim for the repair could be DENIED. Repairs on these components range as follows:
|Aircraft Component||Typical Repair Cost Range|
|GV/G550 Rolls Royce BR 710 Aircraft Engine||$1M up to $4M for Overhaul|
|GIV Rolls Royce Tay Aircraft Engine||$300k up to $1.5M for Overhaul|
|GV/G550 RE220 APU||$125k up to $1M for Overhaul|
|GIV Honeywell 36-100/150 APU||$100k up to $450k for Overhaul|
Each of these Engine and APU programs offer several levels of service and coverage(s). Do you have the right coverages in your program(s) to that meets your Aircraft’s operating profile? When is the last time you or someone representing your interests reviewed the agreements associated with your aircraft’s programs?
No one notices a problem, until it’s time to write a check. By then, it’s too late.
These are essentially insurance plans. No one complains while the premiums are getting paid. Once there’s a claim, then everything is looked at for compliance. A misstep discovered during a claim can result in the claim being denied, and you getting handed a bill for one of the amounts in the table above.
Finally, if you’re a small flight department, with a couple of pilots, and maybe a full or part time mechanic, how often are they being audited and reviewed by other industry professionals? It’s your aircraft, and it’s a lot of your money. Isn’t it worth having someone take a second look at how it’s being spent?
PAH will review and audit all of your aircraft programs, operational data and subscriptions to ensure that you are as protected and as compliant as you should be. The first sample audit is free. Call us today!