A system and method of adaptively managing a plurality of engines in a multi-engine system, where each engine comprises hot gas components and non-hot gas components, and each engine exhibits a performance margin and a remaining useful life, includes continuously, and in real-time, determining a plurality of different degradation mechanisms for each of the plurality of engines, and continuously, and in real-time, determining which of the determined degradation mechanisms is most limiting. The engines are controlled, based on the most limiting degradation mechanism, in a manner that the remaining useful lives of each engine are substantially equal. The plurality of different degradation mechanisms of each engine are determined based on the engine performance margin, modeled failure predictions of the hot gas components, and modeled failure predictions of the non-hot gas components.