Negotiating Aircraft Management Agreements
Posted by Aerlex.com June 2019 Aerlex Newsletter: Amanda Applegate
Most aircraft owners who own an aircraft elect to use a management company to manage the daily operations and maintenance of their aircraft. This allows the aircraft owner to focus on what they do well and hire someone else to handle something that is complex and highly regulated. Aircraft owners expect that the management company knows how to maintain an aircraft so dispatch reliability will be good, safety is not compromised and costs are reasonable.
Once the management company is selected, it will provide its standard management agreement (“MA”). In general, the MA will state how the aircraft and records must be maintained, when the owner must approve maintenance work, fees for the services, insurance requirements, and if the owner elects to allow the management company to charter the aircraft. I am fortunate to have the opportunity to work with a number of great management companies who have invested time and money into creating good MAs. However, once in a while, I am asked to review a MA for a company I haven’t worked with before and I am sometimes shocked with what I find. Here is a list of some of the key items to focus on when reviewing the MA:
Indemnification and Limitation of Liability.
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