Situational Awareness: You Can't Manage What You Don't Measure

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

Situational awareness. It’s not just a term for pilots. It should also be a daily mantra for FBO owners and operators who want to run a successful operation.

In the FBO business, situational awareness is all about being aware of what’s happening in your inner and outer circle. It’s a process of understanding how information, events and actions impact business plan goals, both immediately and in the near future.

During our NATA FBO Success Seminars we discuss developing and reviewing statistics or dashboard reports on what is going on with your business. It’s a daily ritual that is all about situational awareness as it pertains to fuel sales, labor productivity, and tracking your actual profit and loss (P&Ls) against your budget and last year’s performance.

However, one area that seems to get neglected is measuring the sales and marketing initiatives by keeping track of what we are doing to sell our FBO services, develop new customers, bid new contracts and other marketing efforts.

CRM (customer relationship management) software is a category of software that covers a broad set of applications and software designed to help businesses manage and measure customer data and customer interaction, access business information, automate sales, marketing and customer support. To assist in your sales efforts through CRM techniques, you may want to utilize software programs such as Salesforce.com, Pipeline or QuoteRoller.

Once you’ve selected your software, we recommend keeping things simple by tracking at least the following three metrics:

1. Number of cold calls to prospective customers. Yes, cold calling is not dead. Pick up the phone and make contact.
2. Number of appointments, whether you’re trying to sell MRO service or just informing a potential new customer about your facility.
3. Number of closed sales or the number of new transient customers.

Once you get into this tracking, there are additional metrics you can add:

1. Number of referrals received and referrals closed. Referrals means your FBO is delivering a good customer service experience. Referrals should always be followed up on in a timely manner.
2. Amount of email, direct mail, social media and blog posts. The use of all communications channels will increase sales success.
3. Upsell attempts and rate of success. Upselling is critical to help make an FBO successful.
4. Number of business cards handed out. Sounds simple, but promoting the brand is critical.
5. Number of times you contact a prospect before you close the sale. Keeping in contact with the customer base, no matter what the message, helps create and cement relationships.

You can develop your own metrics to fit your business. Whether it is the number of annuals, 100-hour inspections bid on and closed, or the number of contacts for new hangar rentals, any of these metrics are vitally important to the success of your FBO operation.

And always remember, you can’t manage what you don’t measure.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

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FBO Tip of the Week: Take Time for a Midyear Checkup

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

Now that we're halfway through 2015, it's time to take stock of how your FBO has performed this far and review your goals and objectives for the year.

This midyear review is an excellent opportunity to take a look at all aspects of your business and review the metrics that give you a relative benchmark of performance. 

Fuel Sales: Utilizing your dashboard and YTD budget reports, compare fuel sales for each of the first six months against the results of the first six months for 2014 and your budget forecast. Are you trending up or down or maybe staying about the same? Are you going to hit your sales targets?

Fuel Pricing: Review your posted retail pricing for each month, and complete a market survey, both on the field and in the region.

Fuel Discounts: Figure the average of what you actually sold a gallon of fuel for, taking into account all discounts including contract fuel pricing, etc. You also may want to break out these costs by category to include base customers, transient customers, contract fuel, commercial into-plane and government/DOD.

Review all your expenses: Remember to include wages/salaries, utilities, building maintenance, insurance, supplies, rent/lease, loan payments, etc. Are they in line with your YTD budget?

Recalculate what each gallon of fuel costs to pump into an aircraft.

Figure Your Fuel Margin: Compare these margins YTD with the results of 2014.

MROs: Figure your hourly productivity rate for your shop and each technician for the first six months of this year.  Compare these findings against the results of 2014. How are you trending?

Review Your Airport Lease: Now is a good time to think about negotiating a lease extension.

Review Capital Improvements: Are you on target to start or finish your capital improvement projects?

Review Safety Procedures: Now is a good time to conduct an internal audit of your safety procedures.

Insurance Review: Call your insurance agent, and get together to review your insurance story. A good insurance story can save you money.

Review Your Credit Card Transactions: Are your CSRs asking customers for the preferred card?  The one that has the lowest interest/processing rates?

Review Your Base Tenant Leases: Have the leases renewed at the same rate or is there opportunity to negotiate better terms?

Review Your Customer Service Training: Take time to observe how your employees communicate and deal with your customers.  Are your customers willing to recommend you without hesitation?

Now, tell us how you are doing. We'd like to hear from you to get a sense of how the industry is doing. Have you had more transient traffic these first six months compared to the same period in 2014? Do you have an opinion of whether there is an increase of in-flight hours compared to last year? Are fuels sales better, worse or about the same?

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

FBO Tip of the Week: Example of Contagious Company Culture: You've Got to Love Southwest Airlines, Part 3 of 3

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

In this final blog post about developing a contagious company culture, we'd like to share a short case study of a celebrated aviation services company that has put it all together and shines above the rest: Southwest Airlines.

True, they're not in the FBO business, but for the sake of this blog post, let's call them kissin' cousins.

• Company: Southwest Airlines
• Commenced Operations: 1971
• Years in business: 44
• Years of Profitability: 41 plus and counting
• Market Positioning: Low-cost fares
• Market Positioning Symbol: Peanuts
• Founder/Figurehead: Herb Kelleher

Many have attributed the contagious company culture instilled at Southwest Airlines to Kelleher, a rather colorful business figure who once accepted the challenge of Kurt Herwald, then the president of the FBO/MRO Stevens Aviation, to an arm wrestling match for the right to use a marketing phrase: Just Plane Smart.

"A company is stronger if it's bound by love rather than fear,” Kelleher has said while describing the internal culture at Southwest Airlines.

Perhaps coincidentally, Southwest started its operations at Love Field (DAL), Dallas, Texas, and still marries the heart symbol/graphic with its brand name.

Not so coincidental is Southwest's consistent profitability and its reputation for extreme customer loyalty. The two harmoniously go together, like peas and carrots. And at the heart of its customer loyalty is an internal culture that thrives on purpose.

In past blog posts we've talked about developing a company vision statement that is forward looking and describes what a company wants to become. Southwest's vision statement is: "Our vision is to become the world's most loved, most flown and most profitable airline."

But Southwest also created a purpose statement that essentially states why a company exists: "We exist to connect people to what's important in their lives through friendly, reliable and low-cost air travel."

Both the vision and purpose statements are meant to inform and inspire the primary employee stakeholder group. And to drive home the basic tenets of the purpose statement, Southwest developed a series of short videos. Although you can find them on YouTube, they are primarily targeted for viewing by employees.

They're slices of life and highlight the efforts of employees who go the extra mile because the internal culture inspires and gives them permission to do so without hesitation. Click here to view the video about the company’s vision and purpose statements.

In summary, a contagious company culture is one that is contingent upon a management style that nurtures instead of controls. It acknowledges and celebrates its employees’ strengths and encourages good employee behavior while recognizing their contributions.

As we teach in our Don't Forget the Cheese! FBO customer service training program, what employees seek most from an employer is not a monetary reward, but simple recognition of a job well done.

What has your FBO done to create an outstanding company culture? Let us know in the comments.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

FBO Tip of the Week: Team Chemistry-A Key Component of Contagious Company Culture, Part 2 of 3

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

In Part 1 of this series, we said a spirited and contagious company culture is essential in delivering a great customer service experience because it sets the tone and feeds the passion of the operation.

A key component of this type of culture is team chemistry. Good, athletic teams with winning cultures will often point to their internal chemistry as a factor for their success.

But where does good team chemistry come from? How does it take hold and why does it flourish in some companies and not in others?

Certainly, having the right combination of team members plays a big part. But perhaps more importantly is having the right management team in place that's been trained or knows intuitively how and when to nudge the ship in the right direction. It’s important to lead by example, set the tone, act and react consistently, and recognize and reinforce good behavior.

FBO management that has a team-oriented mindset will effectively infuse a healthy culture into the organization where it becomes infectious and adopted by the stakeholder employees.

Many companies try to impose repair for their internal culture problems by attempting to manipulate the behavior of their employees. Quick-fix gimmicks like providing monetary rewards or merchandise incentives may alter a behavior pattern in the short term, but the effects are often short lived and it doesn't take long for the same old habits to find their way back into the culture.

The remedy? Change the cultural mindset; cure the problem.

Changing the cultural mindset is a conscious decision and, yes, it can be done. In other words, the manager or management team first has to be able to recognize when there is an internal cultural problem. As mentioned in Part 1 of this series, an independently administered SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis will help determine what's working and what's not.

Then the management team has to be willing to adopt a cathartic or energizing process that involves all the employee stakeholders. When employees feel their opinions count, an adjustment in mindset takes place. They become more open to change.

Remember, it's not the chemistry of each individual team member that counts. What matters most is the team chemistry that thrives collectively and is managed wisely.

In our next blog post, we'll provide an example of an aviation company where team chemistry flows freely and is highly contagious.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: FBO Industry Consolidation to Continue

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

Editor’s Note: This is a special blog post by John Enticknap, who attended the 2015 NATA Aviation Business Conference that was held June 15-18, in Washington, D.C.

At the recent 2015 NATA Aviation Business Conference held last week, I had the privilege of sitting on a panel with Tom Hendricks, NATA president, Jim Hopkins, Landmark Aviation, and  Clive Lowe, Atlantic Aviation, to discuss the current state of the industry and, in particular, FBO consolidation by the major and smaller chains.

We all agreed that consolidation activity will continue for the foreseeable future and, in fact, has recently picked up a little steam.

One of the questions we are often asked in our consulting business is, "With the chains acquiring all of the good independent FBOs, are there any left to continue consolidation initiatives?"

To prepare for this session and to help answer questions like this, we did a little industry research and came up with the following statistics, thanks in part to help provided by the good folks at AC-U-KWIK.

There are currently 3,650 FBOs in the United States and Canada. But not all of these FBOs are what we define as viable FBOs or FBOs that may be targets for acquisition. So what is a viable FBO? It should include the following criteria:

1. A sustainable business model.

2. Be profitable.

3. Attractive lease terms with long tenure.

In addition to these criteria, we need to define the business model. There are many FBOs in the United States and Canada that are located on small airports with runways that are less than 4,000 ft., with unpaved runways, and are primarily selling avgas with less than 500,000 gallons of aviation fuel sold per year. These businesses are generally not targets for acquisition. If we apply these filters to our 3,650 FBOs, we have approximately 1,600 FBOs left that have business enterprises that sell enough fuel, have hangars, and sell other services that allow the business to be sustainable.

We hear that the chains have purchased all the FBOs. Based upon our statistics, let’s really look at that question. The chain FBOs include the big three, Atlantic, Landmark and Signature, but also other smaller chains such as SheltAir, TacAir, Cutter, Jet Aviation, etc. Altogether, they comprise approximately 285 locations. The number keeps changing from month to month!

Based upon our FBO business model, only 17 percent of the viable U.S. and Canadian FBOs are operated by the chains!

This begs the question, will consolidation continue? The answer is definitely YES!  Why? The business model works. By purchasing good FBOs and grouping them together, immediate added value for the buyer is created. Plus, there is the potential to operate the business more efficiently, drive more business to the location, and create or sustain a unique brand.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background

FBO Tip of the Week: Develop a Contagious Company Culture, Part 1 of 3

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

A spirited and contagious company culture is one of the most important elements in running a successful FBO operation. It's an essential ingredient in delivering a great customer service experience because it sets the tone and feeds the passion of the operation.

Customers can sense and feel a company culture. It can make them feel warm and fuzzy or be a complete turnoff.

By definition, company culture is the "way of life" within an organization. It's exhibited by the behavior and demeanor of the employee stakeholders and expressed in the way the customer service experience is delivered.

As part of our Don't Forget the Cheese! customer service training, we are often asked by our FBO clients to help them analyze their company culture and then offer leadership training to their managers and supervisors to facilitate change.

One of the tools we use to analyze company culture is to conduct internal and external SWOT (Strength, Weakness, Opportunities and Threats) analysis. Through this process, we can gain valuable insight into what's working and what's not.

If an FBO has an excellent track record of establishing long-term, profitable customer relationships, they are probably doing a lot of things right.

On the other hand, if an FBO is experiencing one or more of the following, then it's in need of a cultural makeover: 

• Unusual or abnormal customer churn/defection.
• Lack of consistent repeat customers.  
• Few or no customer recommendations.
• Employees feeling disenfranchised/not part of the process.

The character or tone of a good company culture needs to be contagious. It starts at the top and, through the process of observation and osmosis, resonates down through the organization where it is absorbed due to continual and consistent exposure.

The reality is that great company culture does not magically appear on its own. It's up to FBO management to set the stage and create the proper environment for a desired culture to take root and flourish.

In part 2 of this series, we'll review the key elements in developing a contagious company culture.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

FBO Tip of the Week: The Key Elements to Pricing Fuel

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

As we have all seen, the cost of Jet A fuel on the world markets started to fall more than 10 months ago and hit the lowest point in January. Since then, the price has been inching up.

By keeping an eye on the fuel market, FBOs can avoid falling short of their profit goals. As we know, the base price for a gallon of Jet A was as low as $1.48 a few months ago. With a Platts price of around $1.90 today, FBOs are paying approximately 42 cents per gallon more, which means an average load of fuel has gone up $3,500.

Because fuel sales drive FBO profitability, it’s imperative we keep a constant vigil on the key elements to pricing our fuel:

• A consistent review of posted prices in your market.         
• Tracking your cost of fuel load-by-load and knowing what's in your tank.
• Calculating the true cost to pump that fuel.
• A realistic review of your contract fuel.

At our most recent NATA FBO Success Seminar in March, we forecast that the price of oil was poised for a relatively steady recovery following the recent collapse to under $50 per barrel. Based on market intelligence, including a report by the International Energy Agency (IEA), the recovery will not come close to returning to the highs of past years. In the IEA report, the Paris-based organization of 29 major oil importing nations said the fuel price rebound “will be comparatively limited in scope, with prices stabilizing at levels higher than recent lows but substantially below the highs of the last three years.”

With the continued volatility of Jet A fuel markets, FBOs need to conduct fuel surveys. Many online fuel pricing resources, such as those posted by AC-U-KWIK and others, provide relative survey data that is generally very good for benchmarking the marketplace. With these resources you get instant feedback on the range of pricing in your area plus the average price.

With this type of information, you can complete a simple price formula calculation. For example:

Base Price (Platts or Spot Jet A Price): $1.90  
Supplier differential: $0.15
Transportation: $0.10
Fed & State Taxes: $0.337
Flowage Fee: $0.09

Total Cost of Fuel: $2.577

Plus Gross Profit Projected: 2.25

Calculated Retail Price: $4.83

Jet A
$3.30-$7.52
average $4.86 

In this example, the projected posted price is just about average. For an FBO that has recently invested in new infrastructure and employee enrichment, such as a new hangar and customer service training, a realistic Jet A posted retail price could easily be $4.98. Now you can start your discounts from there.

However, as we counsel our FBO clients, don’t give away all your services. Every customer who comes on your ramp must contribute to your revenue stream in some way, especially the reluctant customer that doesn’t buy fuel.

Therefore, keep your costs in mind. Knowing your costs to pump fuel is key. With this knowledge you can apply your margin/into plane fee to the contract providers price. Then your business will be lean, mean and profitable!

Give us your feedback; we always like to hear your comments and read our eBook; “FBO Survival, Keep Your Operation Lean Mean & Profitable.”

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

FBO Tip of the Week: How to Measure Your Customer Service Performance

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

There are many line items you can measure in an FBO operation in order to assess how your business is trending. By setting simple benchmarks for tangibles such as fuel sales, fuel margins and maintenance productivity, you can set up an electronic dashboard for daily monitoring. (See our previous post: FBO Tip of the Week: Keep Your FBO Operations Simple.)

However, how do you measure an intangible like your customer service performance?

The obvious answer is to initiate a customer service survey. But not all surveys will help you benchmark your performance and, perhaps more importantly, ask the right questions.

As part of our Don’t Forget the Cheese customer service training program, we recommend FBOs initiate a measurable customer service survey using the following criteria.

• Keep the survey short. Ask the customer to rate no more than five service areas or attributes. It’s our experience that pilots will more likely respond to surveys that appear short and easy to complete.
• Rate each service area or attribute from one to 10 with 10 being the highest.
• We suggest customers evaluate the following:
  • Line Service
  • Customer Service
  • Passenger Amenities
  • Pilot Amenities
  • Cleanliness of Facility
• Also ask just one really tough question: Would you recommend us? Yes or no?

We advocate you place a value of 50 points on this question alone. Why, you ask? Simply, a customer recommendation should not be taken lightly, and for most customers, this means they are putting their reputation on the line. Also, if a customer says, “No,” to this question, you should find out why. This will help correct a potentially negative situation and assist in repairing a valued customer relationship.

Now, when you receive a completed survey, add up your points. The perfect score is 100.

For convenience, we recommend placing this survey on your Web site. We also suggest you include a printed survey with your fuel invoice and place a completed survey box/receptacle next to the facility door leading to the ramp.

If you want to benchmark your progress, do a monthly tabulation. Also, you may want to establish an historic benchmark by inviting past customers to take the survey.

Besides the obvious benefit of finding out what customers think, a customer service survey also sends a positive message to your employees that customer service is important. Therefore, make sure your employees take part in this program, and always provide them with survey results.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

FBO Tip of the Week: Keep Your FBO Operations Simple

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

No doubt many of you’ve heard of the purported business idea of KISS (Keep it Simple, Stupid).  Although it’s not a phrase we like to throw around, here’s what we can glean from it for the FBO industry: Keep your FBO operations simple.

When one waxes philosophically about the FBO business, it’s sometimes easy to get caught up in some of the popular management disciplines such as business process reengineering (BPR), matrix management and consensus management, among others. Again, let’s keep it simple and boil it down to the four key things an FBO manager should really be doing:

• Plan.
• Organize.
• Control.
• Measure.

At our NATA FBO Success Seminar, we discuss these elements in detail. However, for this blog post, here’s our take on the four simple ways to manage your FBO without getting caught up in complex ideas and procedures.

1. Simple Plan

Beyond the customary detailed business plan, FBOs can keep their planning process simple by establishing short-term and long-term goals and objectives.

The short-term goals should be built around achieving expected/specified fuel or maintenance sales and determining margins and productivity rates. This would include a simple strategy and identifying the tactics required.

The long-term goals should consist of action items to be achieved over a longer period involving line items such as improving facilities, lowering insurance and credit card rates, negotiating a better fuel contract, and obtaining a longer term lease. Think in terms of writing each goal starting with an action word, such as build, promote, create, establish, lower and obtain.

2. Simple Organization

Create a simplified organization of qualified managers and supervisors. Set clear operating procedures, guidelines and, above all, communicate both your short-term and long-term goals and objectives.

Even better, get your managers and supervisors involved in the planning process. This promotes employee buy-in and raises morale.

3. Simple Control

Use data to run your business. Get and use daily reports to know what your business is doing. You can print reports or develop electronic dashboard reports from your accounting system. Industry software, like TotalFBO, has these built into their programs.

4. Simple Measure

Measuring results is critical to your planning process. Therefore, it goes full circle. Also, managers and supervisors should be informed of measurable results on a frequent basis. It becomes both an incentive and a driving factor for your business.

Perhaps the simplest way to measure results is to establish benchmarks for each of your business goals, particularly in the areas of revenue streams such as fuel and maintenance sales. You can also set a benchmark for achieving better customer service through the use of customer satisfaction surveys. (This will be discussed in a future blog.)

Remember, in measuring revenue for fuel sales, keep your margins in mind. If you sell a lot of fuel (volume) but your margins were lower than your plan, you need to adjust your findings accordingly.

The same goes for maintenance sales. Be sure to measure your productivity rate as well as your revenue (dollar volume).  You may be generating more sales, but your productivity rate might be putting you in the red.

One More Tip

FBO operators who become slaves to complexity are at risk of running a reactive business and thus reactive with their time. Therefore, here’s another simple tip.

Try working “unplugged” for one hour every morning during the time set aside to plan, organize, control and measure. This means no internet/surfing connection and absolutely no phone calls, texts, etc. This will give you a sense of accomplishment that simplifies the daily routine.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Our Top 10 Tips eBook

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

For the last few years, we have written FBO Survival Tips that focus on the various strategies and tactics needed to survive the daily rigors of running a successful fixed base operation. After some great feedback, we decided to compile the 10 most popular tips into a comprehensive ebook resource for the FBO industry.

We are very proud to introduce FBO Survival: 10 Tips to Keep Your Operation Lean, Mean and Profitable. This book was made possible by the good folks at AC-U-KWIK and Penton. 

Acknowledging that market and economic conditions often dictate the size and scope of an operation, this book will help the FBO owner, operator and manager prepare for both the best of times and the worst of times and keep them focused on running a successful FBO.

In this book you’ll find 10 of our most popular tips as well as a bonus section, 3 Keys to FBO Success. Also included are some dashboard report templates you can use to keep track of your operation on a daily basis.

The book is available as a digital download at Amazon.com. Here is a thumbnail overview of each of the 10 tips:

FBO Survival Tip #1: Keep Your Customers Close and Your Margins Closer

In order to survive in any economic climate, FBOs should focus on the two most important revenue generators: valued customers & fuel margins.

FBO Survival Tip #2:  Avoid the “Ready, Fire, Aim” FBO/MRO Syndrome

To generate profitable transactions, FBOs must communicate across the enterprise, figure costs accurately and not overpromise.

FBO Survival Tip #3: Don’t Give it Away!

As fuel margins get squeezed by aircraft operators and fuel broker discount programs, FBOs need to charge for “free services” instead of giving them away.

FBO Survival Tip #4: Develop an Early Warning System

A crucial FBO survival strategy involves developing early warning reporting metrics designed to keep your fingers on the pulse of FBO operations.

FBO Survival Tip #5: Prepare to Operate in Your New Normal

After every major economic downturn, FBOs must establish a new operating benchmark that becomes their new normal moving forward.

FBO Survival Tip #6: Take Off the Blinders

FBO operators and managers can’t effectively run their facility without getting involved by walking around to gain a customer’s perspective.

FBO Survival Tip #7: Ask the Tough Questions!

If you don’t know what your customers think of your FBO operation, then you’re not asking the really tough questions.

FBO Survival Tip #8: Be a Savvy Business Operator

The FBO owner and manager should know and understand all aspects of the operation and what drives business profitability.

FBO Survival Tip #9: Avoid the Status Quo

About the time an FBO operator thinks things are running smoothly, that’s the time complacency sets in and things begin to slide.

FBO Survival Tip #10: Sharpen Your Negotiation Skills

Building successful stakeholder relationships in the FBO business often includes skillful negotiations. Sharpening these skills and thinking win-win are critical elements to getting what you want. 

FBO Survival Bonus: 3 Keys to Success

As an FBO Survival book bonus, the authors have detailed 3 fundamental keys to FBO operational success. 

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Watch Your Discounts—Do the Math!

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

There’s a syndrome that is unique to the FBO industry. We call it the false-positive fuel pricing syndrome where the posted price is not really the selling price.

Show us another industry that establishes a pricing structure for its main product, publishes it online, feeds it to informational websites, posts it on a board in the store, and then completely ignores it when making the sale. Although this practice appears to be contrary, divergent thinking, it’s standard operating procedure for most FBOs.

When discounts are freely given to fuel brokers, base customers and transient customers, who’s left? At the end of the day, heavy discounts have eaten into the margins that were built into the posted price.

Pricing studies indicate that discounting posted prices may gain more customers but in the long-run the business is less profitable. “Making it up on volume” is a phrase we’ve all heard but this seldom works, especially in a very niche market like the FBO industry where the number of daily transactions is counted in tens instead of hundreds or even thousands.

Threaded below is an example of what a business needs in terms of additional customers to breakeven when a discount is given.

Before the Price Discount with 1,000 customers:
- Price per unit: $200
- Cost per unit: $150
- No. of customers: 1,000
- Gross income: $200,000
- Direct Costs: $150,000
- Gross Profit: $50,000

After the Price Discount with an additional 250 customers:
- Price per unit: $190
- Cost per unit: $150
- No. of customers: 1,250
- Gross income: $237,500
- Direct Costs: $187,500
- Gross Profit: $50,000

That’s an extra 250 customers you’ll somehow need to woo with your new low prices, just to stay even!!!

In the FBO industry, we’ve encountered many FBOs who have lost price-sensitive customers but have become more profitable by selling higher margin fuel on fewer transactions. 

If the math does not convince you to be very cautious with discounting, consider these facts concerning price buyers:

• They are the least loyal customers.         
• They complain more than premium price buyers.         
• They expect more than premium buyers.     
• They take up more of your time and distract from the time you need to spend with premium price buyers.         

FBO operators should keep these concepts in mind as part of the planning and management of the enterprise. Remember, a 5 percent discount will require the FBO to pump at least 20 percent more gallons just to maintain anticipated profit. The question is, where will you get these customers?

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Give Customers Your Best Cheese!

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

At the recent NATA FBO Success Seminar, we had a roundtable discussion where attendees shared their best practices in delivering a good customer service experience.

We called the session “What’s Your Cheese?”

If you are a regular reader of our AC-U-KWIK FBO Connection blog, you know we’ve developed a customer service training program called Don’t Forget the Cheese!©. It’s a fun, memorable program developed specifically for aviation service companies who want to improve their service experience.  (Click here for the link to a past blog which explains the origins of the program and provides further background.)

As part of the training, we challenge FBOs to compete on customer service, not on price. One of the best ways to compete on customer service is to make your customer service experience uniquely unique. In other words, no one else can duplicate exactly what you do in the way that you do it. It’s unique to your style, your very own way in which your FBO delivers your customer service experience.

In a way, it’s your exclamation point! And it’s the answer to the question, “What’s Your Cheese?”

Threaded below is a sampling of what the NATA FBO Success Seminar attendees shared when asked, “What’s Your Cheese?”  Here’s what they said:

• Our crew cars are unique. We even have an old police cruiser that’s very popular. A lot of get up and go!
• Our cheese is developing a home atmosphere, relaxed and comfortable.
• We send hand-written thank you notes and remember our customer’s birthdays.
• Customers, as well as employees, look forward to our quarterly barbecues.
• Our flying Santa is our cheese. It’s unique to us. Each Christmas we tow it around.
• We have a GPS in every crew car, preloaded with eating and entertainment destinations.
• The piano in our lobby is a good example of our cheese and providing something extra. We invite musicians to play for the entertainment of our customers during a busy ski season.
• Repeat customers are greeted with a big hello and we make it a practice to remember their names. That’s adding some good cheese.

To further this discussion, we’d like challenge you to share "what’s your cheese." Simply give us your best cheese at the end of this blog and check back often to see what others have written.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Keep Your Fuel Margins Closer

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

Last week, our blog post discussed how keeping your customers close by diffusing disputes at the point of transaction made for good business. For this post, we’ll discuss how keeping your fuel margins closer makes good business sense. It’s really kind of a parody of the famous line from the film, “The Godfather: Part II,” “Keep your friends close and your enemies closer.”

At first blush, keeping your customers close and your margins closer are two axioms that don’t seem to go together. What does one have to do with the other? The answer is simply that each day FBO operators must keep their fingers on the pulse of their operations. Keeping customers happy is just as important to the bottom line as keeping track of fuel margins and managing closely what’s in the tank.

As we all know, a healthy fuel margin is hard to come by these days. On one hand you have savvy aircraft operators who fly more fuel-efficient aircraft, tanker fuel from their own fuel farms and ask for aggressive fuel discounts when purchasing fuel.

On the other, you have the fuel brokers with their own sets of customers, negotiating significant  fuel discounts off the posted price and taking a piece of the action while cutting deep into your margin.

And then there’s the airport authority wanting to increase into-plane fees while planning to add another competing FBO at the airport, even though fuel sales have been relatively flat for the past seven years.

Sound familiar? It’s enough to make most FBO operators say, “Enough is enough!”

FBO operators should know and manage the cost of each fuel load that is in the tank farm and be able to adjust their posted price accordingly while remembering to keep their target margin consistent.

Therefore, this should be your daily mantra, “Today, I will keep my customers close while remembering to keep my fuel margins closer.” It’s just good business sense.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Keep Your Customers Close

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

In today’s competitive FBO working environment, there is perhaps no greater challenge than keeping your customers close and your fuel margins closer. For this blog post we’ll discuss the former with a follow-up blog next week regarding fuel margins.

At the NATA FBO Success Seminar in March, attended by more than 30 FBOs and sponsors from throughout the U.S. and Canada, we discussed how to attract customers and what you can do to keep them coming back.

One disturbing statistic we reviewed was that consumer research indicates that only one in 25 dissatisfied customers will actually tell you there is a problem. The rest leave without saying a word, perhaps never to be seen again.

That’s why it’s important to train your employees to develop a sixth sense in order to recognize when a customer has a bad service experience. You don’t want a customer leaving your FBO without resolving a dispute. 

One of the keys to a successful customer service experience is to empower FBO employees to resolve all disputes at the point of transaction before a disagreement can blossom into something quite ugly. This is an important element we stress in our Don’t Forget the Cheese customer service training program.

We believe that taking care of customer disputes on the spot will turn an unfortunate transaction into a successful transformation, where both the customer and the employee have a chance to resolve an issue, find a solution and bond in the process. It can be a very cathartic experience.

Keeping your customers close is good business. Next week, we’ll discuss how keeping your fuel margins closer is good business sense.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. For more background, visit the biography page or www.absggroup.com.

Tip of the Week: Make Your FBO Data Driven

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

Just as pilots rely on the instrument panel to keep up and stay ahead of potential problems, FBOs should rely on data-driven dashboards to do the same thing.

Operational and financial data fed on a regular basis to the FBO operator is an essential element of running a successful business. They’re a quick snapshot you scan to make sure the engine of your company is running smoothly.

Setting up a dashboard is similar to a pilot setting up waypoints. You preselect the data you want to see and have it delivered to your desktop on a daily basis.

Here are some suggested data points to set up on your dashboard:

Line Service Business

• Review your previous day’s retail fuel sales.
• Contract Fuel Sales.
• Airline Fuel Uplift.
• Month-to-Date retail fuel sales.
• MTD Contract Fuel Sales.
• MTD Airline Fuel Uplift.
• Budget retail fuel sales, contract and airline fuel sales.
• Number of Customer Contacts Yesterday.

Maintenance Business

• Mechanic Hours Billed yesterday.
• Mechanic hours of vacation, paid leave.
• Mechanic hours paid.
• Yesterday Mechanic Productivity.
• Month-to-Date Productivity.
• Budget Productivity.
• Parts Sales Dollars.
• Budget Parts Sales.
• Support Staff hours paid.
• Number of Customer Contacts.
•  Number of annuals/100 hr./inspections bid.

Flight Operations

• Flight Instructor hours billed yesterday.
• Flight Instructors hours paid.
• Flight Instructor Productivity.
• Charter hours billed.
• Charter hours available.
• Charter Productivity.
• Customer Contact - Flight Instruction.
• Sale Contacts for Charter.

You’ll notice we are getting sales data, labor data and marketing data. After cost of sales, labor is your biggest expense. Labor hours must be reviewed and managed to assure you maximize productivity.

Also, you must keep track of your marketing activity. This is something you should touch on daily, focusing on both retention of existing customers and obtaining new customers. We know this is stating the obvious, but if you don’t grow, you go out of business. Every year there can be as much as a 30 percent churn in turnover of base customers and regular transient customers.

In setting up your dashboard data requirements, make the adjustments with your accounting personnel as well as department managers to collect this data.

If you are uncertain as to how to set up a dashboard properly as well as the interpretation of the data, we suggest you attend an NATA FBO Success Seminar. The next seminar is scheduled for March 9-10 in Las Vegas. At these seminars we suggest a number of simple strategies and tactics to assist you with data management.

FBO Success Seminar: Take Time to Sharpen Your Axe

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

“Give me six hours to chop down a tree, and I will spend the first four sharpening the axe.”

          -Abraham Lincoln

FBO operators, managers and supervisors often find themselves dealing on a daily basis with situations that need immediate attention. These are the bugs and gnats that creep into our schedule unannounced and take away from quality time needed for planning, preparation and, quite frankly, sharpening the axe.

As Abraham Lincoln so wisely put it, work goes a lot easier if you take time to hone your tools. In the case of the FBO manager and supervisor, that’s time spent in keeping abreast of the FBO industry by learning new strategies and tactics that will move your business forward and help you focus on the things that matter most. 

That’s why we’ve dedicated this blog to providing tips that help in three key areas of FBO operations:

• Maximizing Profits.
• Reducing Expenses.
• Improving FBO Productivity & Bottom-Line Performance.

In 2008, we teamed with the National Air Transportation Association (NATA) to develop a comprehensive two-day FBO success seminar. The original training syllabus was based on our proprietary 10 Steps to Building a More Profitable FBO.

Now we are starting our eighth year in conducting this seminar, which has evolved over time and provides an opportunity to sharpen the axe.

A key session is titled Don’t Give it Away! In a nutshell, this means that FBO operations need to take a close look at all the things they are giving away on top of demands from customers and third-party fuel providers to discount fuel prices.  

An important takeaway is that every aircraft operator that arrives on your ramp must contribute to your revenue stream, even if they don’t buy fuel. That’s why we are seeing an emergence of facility fees and other fees to help FBO operations become and stay profitable.

Please take time to sharpen your axe and join us at our next NATA FBO Success Seminar, March 9-10 in Las Vegas, as we discuss these types of key issues in detail.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. For more background, visit the biography page or www.absggroup.com.

FBO Operations Tip of the Week: Differentiate Your FBO on Customer Service, Not on Price

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

Note: Join John and Ron at NBAA Schedulers & Dispatchers Conference. Full details.

Many FBOs have gone out of business by lowering their prices during prolonged periods of time. Yes, FBOs need to be price-competitive, but they must maintain healthy margins and find other ways to compete through differentiation.

One of the best ways we find to differentiate one FBO from another is to offer an outstanding and memorable customer service experience. This is a fundamental shift in the FBO industry away from a price-sensitive business model to one based on providing exceptional customer service.

More and more FBOs are taking customer service training very seriously. Just as FBOs don’t tolerate mishaps on the ramp, they are becoming more conscious of eliminating miscues with the way they deliver customer service.

Research indicates that loyal customers don’t stop doing business with a company solely because of price, but rather because of a poor customer service experience. However, most will return if you recognize and fix the problem.

One of the ways to improve the customer service experience is to standardize training and look for ways to motivate employees in a way where they take ownership of problems when they arise. An example of a standardized training system is the Don't Forget the Cheese! customer service training program written specifically for the FBO industry.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Operations Tip of the Week: Cross Train and Involve all Employees in the Customer Experience

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

For most FBOs, employees must learn to multitask. In evaluating FBOs that are consistently successful, we find employees do many different job functions that result in not only a more efficient operation but it actually helps employee morale and adds to the customer service experience. As we like to say, a happy employee, a happy customer.

The result can be a very contagious working environment that gets noticed by the customer. Plus, cross training makes all employees more valuable and better motivated.

Here are some ideas:

• Train your CSRs to meet and greet arriving aircraft. You’re probably already paying the workers’ compensation rate for ‘ramp’ on the CSRs. 

• Train your CSRs and building maintenance staff to be wing walkers. Tip: Having two wing walkers, especially in hangar movements, can decrease your accident incident rate and could help lower your insurance premium. 

• Get your accounting staff outside to learn about fueling and tank farm quality control. They might even learn about fuel quality control and inventory procedures. 

• When was the last time the executive staff worked the ramp or talked to arriving pilots and passengers? 

• Encourage ramp staff and the executive staff to walk the ramp for FOD and look at the FBO facility from the arriving pilot’s point of view. 

• Consider having your A&P technicians meet, greet and take part in the customer’s maintenance project experience. Once the inspection is completed, the A&P should be part of the discussion with the owner on what is to be fixed. This seems obvious but is rarely done. 

• In your flight school, when was that last time your chief instructor called and talked to the students before a check ride? Find out how the student likes flying and the overall learning experience.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Operations Tip of the Week: Maximize Your Profit Position

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

As FBO operators and managers, one of the most important tasks to keep in mind is maximizing your profit position.

In order to accomplish this, we rely on a standardized fuel pricing method. We think it is fair to say most FBOs use either cost-plus pricing or mark-up pricing. Cost-plus means you want to make a certain “plus” above your cost. For example, your cost today is approximately $2.25 per gallon and you want to make $1.50 per gallon. Therefore, simple math puts the selling price at $3.75 resulting in a profit of 40 percent  on sales. 

For a mark-up pricing example where you want to make $1.35 per gallon, your selling price would be $3.60 per gallon, or just short of a 60 percent mark-up on cost.

Both of these methods are common in the manufacturing business arena. The variance in these two methods lies in the difference between margin and mark-up. This can be a lengthy discussion, but suffice it to say, a thorough understanding of your costs of operation to include labor, facilities, other income, overhead, etc., affects what margin you use to show a profit. This, in turn, allows you to calculate what mark-up percentage you must use to get to the intended profit level.

We discuss these fuel pricing methods in greater detail at our NATA FBO Success Seminar, which is scheduled for March 9-10 at the Sands Expo and Convention Center in Las Vegas. 

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Operations Tip of the Week: With Fuel Prices Falling, Guard Your Optimism

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

 
As the price of auto gas falls almost daily, we wonder how the corresponding drop in Jet A fuel might affect the FBO business.

Just four weeks ago, OPEC indicated they would stabilize a barrel of oil at $60. Currently, a barrel of oil is hovering around $54. Comparatively, at the beginning of 2014, index pricing for Jet A was around $3 per gallon. In December we saw roughly $1.60 per gallon resulting in a $1.40 swing. 

This begs the question: Will aircraft operators take advantage of lower fuel prices and start flying more resulting in more gallons being pumped at FBO locations?  

Based on our research and other industry discovery work, the answer is no, at least not in the short term. 

For the most part, flight departments, with FBOs following suit, have adapted over the past few years to what we call the new normal. While operators have right-sized their aircraft fleet and supporting flight crew personnel, FBOs have resized and streamlined their operations to meet the corresponding demand.

That’s not to say the industry will not benefit in the long term by lower fuel prices. Certainly, if lower fuel prices persist and the result is a more robust economy, aircraft operators will make the necessary adjustments by adding capacity and flight scheduling flexibility.  

But let’s not get ahead of ourselves. Just as it took months, even years, to get where we are now, the effects of an economic recovery on businesses operating aircraft will be slow to take place.

In the next few weeks, we will conduct our Annual FBO Industry Survey, which examines both past years’ performance as well as a look at current trends and predictions for 2015. In addition, we will probe FBO owners and operators to get a feel for their confidence in the economy going forward. 

In the meantime, lower fuel prices will give us at least a temporary reason to be optimistic. However, we can expect a continued sluggish market into the first quarter of 2015 with perpetual swings in fuel pricing and no appreciable increase in flight hours.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things