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In the know on FBOs
2015-07-20 15:35:23   Source:www.zgtyfly.com   comment 0
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Core tip:Somehavedescribeditastheultimateconciergeservice.Othersseeitasjustanotherwaytochargemoreforfuel.But RobSeaman saysthatregardlessofyourviewandwhereyoufly,theFBO(FixedBaseOperator)haschanged,maturedandbecomefarmorethantheguyonthefieldsellingg

Some have described it as the ultimate concierge service. Others see it as just another way to charge more for fuel. But Rob Seaman says that regardless of your view and where you fly, the FBO (Fixed Base Operator) has changed, matured and become far more than the guy on the field selling gas.

In the early days an FBO was basically a fuel sales hut on the field, a storage tank and maybe a mobile refueler or two. You called and they came to service you either where you were parked on the field or at the pumps. But with growth and maturity – especially as the private business aircraft became a reality – these sites grew to include dedicated ramp space and buildings with passenger and crew amenities. They also developed the service acumen that has become prevalent today – a one-stop, serve all solution to making the private aircraft travel experience something special and unique.

Today an FBO represents a very high-end concierge approach to handling multiple needs and concerns and empowering the use of direct and indirect services and products. In many cases, for every one person you see at an FBO, the operation provides direct and indirect employment to several more people down stream – all of whom make up the service support team of the operation.

Is bigger better?

The biggest growth in recent years for this unique industry sector has been amalgamation and joining of forces under a network banner of some sort. We read almost daily of one or two previously independent sites becoming part of or affiliated to the chain type operations. Under this concept, the user gets to work with volume buying power, should be dealing with a common set of service standards and business methodologies and, in many cases, a common look and feel to the even the bricks and mortar of the site.

The concept works for those who want to deal with single stop planning and scheduling options, buying discounts from leveraged and collective purchases and a general safety in the big numbers approach. If you feel comfortable and enjoy this approach, then there are some great chain FBOs located all over the world that you will enjoy working with you – and in turn will be happy to get your business.

But in the end size does not really matter: it is the people and way in which they deliver the services that truly makes one site stand out over the others. And while you may think that price is the main driving factor, you would be wrong. In numerous surveys and studies, the guy with the higher price frequently has the higher market share on a field based solely on the way customers are treated, received and dispatched from a favorite FBO.

Add to this that many single or smaller chain type FBOs have a charm and look that is unique – as opposed to the cookie cutter similarity of the bigger groups. This too can be a part of the overall enjoyment of the private aviation experience. What they may lack in funding to build big glass and gold plated facilities that measure in the high thousands of square feet, they make up for with the uniqueness of their bricks and mortar and the special way they build relationships and service with the clients.

In the end it is really a choice between personal taste and, of course, convenience of location to the end destination. With the prevalence of fuel programs and other support products today, pricing is really not an issue. Every FBO accepts just about all the various options.

So again, it is what you want and how you wish to be serviced personally – or who your passengers choose – that often answers the question of which FBO to use. As support to this, just look at all the various customer surveys that take place each year. Most of the leaders get there ranked on the service and support they provide.

Some notable names

If your taste and preferences lean to the larger chain FBOs, there are some names to note – but these are just a few.

Let’s start with Signature Flight Support. The company has a combination of fully owned Signature sites, and a growing number of Signature Select FBOs. The Signature Select members are independently owned and maintain their brand with the addition of the Signature Select badge. They are supported by Signature Flight Support’s global sales and marketing teams and are promoted along with the full network.

The two brands combined now offer service at more than 125 worldwide locations. Among their selling points, they note that dealing with any Signature in the network includes personalized customer service and point-to-point coordination of handling and flight support services. Also, participating FBOs offer the Signature Status and Signature TailWins customer loyalty and rewards programs. Loyalty programs and pass along services are one of the selling points to the use of a chain FBO, and Signature has long been a leader in this role.

Another name of note among the big guys in bizav support is Landmark Aviation. Headquartered in Houston, TX, they currently list 68 locations in the US, Canada and Western Europe. The company is on a growth roll, having added some 23 of those locations in the last year alone – 18 of which came through the acquisition of the smaller Ross Aviation chain of FBOs.

Of course no discussion about chain FBOs would be complete without a visit to Jet Aviation. While not the largest, with 16 FBOs that are truly spread around the entire globe, this group gets bragging rights for most variety and number of countries in their network. Europe, the Middle East, Asia and North America all have a Jet Aviation presence – many of which are also leading MRO centers for the firm.

The list goes on and changes are happening all the time. One notable trend is that many owners of previously independent FBOs are deciding to join the chains either because they are nearing retirement, feel the time is right to sell or are getting ready to ride out the next, inevitable down turn in the business – having only slightly recovered from the last. Just watch the headlines and surveys, more news to come as they say.

Strengths and weaknesses

Industry analyst and respected “crystal ball gazer” Brian Foley states that there’s really no hiding the state of the FBO industry. “It’s directly related to business jet operations, which is a metric the FAA publishes monthly on the number of business jet takeoffs and landings,” he says. “An increase in this number means jets are buying more fuel and services, and vice-versa.”

Back at the market peak in 2007, there were some 407,000 business jet operations. This figure dropped by over a third to 266,000 during the financial crisis of 2009, much to the dismay of FBO operators. Since then, operations have slowly and steadily increased in the US to around 350,000, which is still 14% below the peak but well above the trough.

Foley notes that the “mom and pops” (i.e. single or one-off FBOs) are being further squeezed by the economies of scale and buying power of the big FBO chains. These chains themselves have to compete against each other by offering discounted fuel cards to customers, which pressures margins. The roll-ups and expansions are costly as well.

“Of course the FBO business is a global affair and other areas such as Europe have yet to have a meaningful recovery,” he adds. “BRIC countries and emerging markets are also soft due to a plethora of political and economic reasons, none of which will resolve in the near term.”

The one thing folks in this industry always say to others about their jobs is that they like this business because it is constantly busy, always changing and never the same from one moment to the next. Through ups and downs in the economy, this part of aviation has continued to grow, build and, where needed, reinvent itself.

For FBO lifers – home is where you park your jet! (Fly-Corporate)

 

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