The Cost of Cheap Management

“Your management fee seems expensive.”

My answer is always the same: my fee is a fraction of what I save you compared to the “cheaper” alternatives. Let me show you what I mean.

A Sovereign Story

Not long ago I met an owner of a Citation Sovereign. He had been using a local pilot–mechanic team who claimed to “handle everything.” That relationship ended in a disaster: undocumented parts, skipped inspections and regulatory violations that drew FAA and FBI scrutiny. The aircraft was grounded for months while investigators reviewed logbooks, components and inspections.

During our conversation I walked him through the real cost of that downtime:

• Well over $100,000 per month in depreciation and lost utilization

• Soft costs: schedule disruption, charter replacement, inconvenience for him and his family or business

He understood — then he chose another manager who offered a slightly lower monthly fee.

The “Cheaper” Plan in Action

Here’s how that supposed saving is playing out:

• The new manager delivered the Sovereign to a large MRO and effectively said, “Do whatever you think it needs.” That’s an open‑checkbook invitation to a six‑figure invoice just to review previous maintenance.

• He advised immediate hot section inspections (HSIs) on the Pratt & Whitney PW306C engines, even though they had 271 hours remaining — roughly two and a half years of flying for this owner.

• No one arranged loaner engines, so the aircraft will sit while both engines are off the wing.

The shop quoted six weeks, but my experience with that facility says otherwise: a similar PW306C event there previously took eight months. Realistically, the aircraft will likely be down anywhere from four months to a year.

The Hidden Hit: Tariffs and Timing

There’s another layer most owners never see. The last PW306C work I supervised carried $110,000 in tariff charges alone. By doing HSIs now instead of timing them closer to the limit — and likely after anticipated tariff relief — this owner is very likely paying an unnecessary quarter‑million dollars or more in tariffs.

On paper he “saved” maybe $50,000 a year on management fees. In reality, once you add up unnecessary tariffs, extended downtime, lost utilization and extra maintenance driven by poor planning, that “savings” will very easily cost him seven figures.

The Real Takeaway for Owners

Aviation is unforgiving. You can save a few thousand dollars a month on management, but you may be gambling with:

• Millions in asset value

• Regulatory and compliance exposure

• Your ability to use the aircraft when you actually need it

Good management is not an expense — it’s an insurance policy on the value of the aircraft, the integrity of maintenance, the reliability of your schedule and the total cost of ownership. Done properly, management reduces unnecessary maintenance, minimizes downtime, protects resale value and keeps the aircraft flying safely, efficiently and profitably.

That’s the real cost of cheap management — and why the “expensive” option often ends up being the least costly decision you can make.