FBO Fuel Sales Survey: 54 Percent of FBOs Say Fuel Sales Increased in 2015
/Fifty-four percent of U.S. FBOs say their fuel sales increased in 2015 compared to 2014, according to the 2016 Annual FBO Fuel Sales Survey results released by Aviation Business Strategies Group at the 2016 NBAA Schedulers & Dispatchers Conference in Tampa, Fla.
Of the 54 percent of FBOs surveyed that reported increased fuel sales in 2015, 23 percent reported a 1 to 4 percent increase, 15 percent reported a 5 to 8 percent increase, and 16 percent reported an 8 percent or greater increase, ABSG principals John Enticknap and Ron Jackson say. Enticknap and Jackson are the AC-U-KWIK FBO Connection bloggers.
The increase in fuel sales in 2015 builds on increases in the two previous years. For 2014, 49 percent of responding FBOs reported a year-over-year increase in fuel sales. Surveyed about 2013, 43 percent of FBOs reported greater fuel sales compared to 2012.
“This is the first time since we started the survey that more than 50 percent of the respondents experienced an increase in fuel sales over the previous year,” Enticknap says.
Although a majority of FBOs reported increased sales, 28 percent of FBOs responding to the survey experienced a decrease in fuel sales in 2015, Enticknap says. The other 18 percent of FBOs says fuel sales were flat.
“This is still a fractured marketplace that is showing some positive signs of recovery,” Enticknap says.
FBOs also provided a forecast for 2016. Most FBOs participating in the survey — 58 percent — say they expect an increase in fuel sales in 2016 compared to 2015, Jackson says. Although no respondents expect to increase fuel sales by more than 8 percent, 18 percent expect a 5 to 8 percent increase, and 40 percent expect a 1 to 4 percent increase.
“Looking ahead, more than 90 percent of surveyed respondents said they expect to have the same or increased fuel sales this year compared to their 2015 results,” Jackson says. “If this forecast holds up, 2016 could prove to be a watershed year for the industry.”
These expectations for 2016 are similar to expectations FBOs had for 2015. One year ago, the Annual FBO Fuel Sales Survey found that 61 percent of FBOs were predicting an increase in 2015 fuel sales. In all, 89 percent had been expecting flat or increased fuel sales in 2015.
When asked about their expectations for the economy in general, 41 percent of the responding FBOs said the economy is not heading in the right direction, and 27 percent have a positive outlook about the economy. The rest — 32 percent — were undecided.
Transients’ Tankering Taking Hold
Finally, Enticknap and Jackson asked about fuel purchases by transient customers in this year’s survey.
“Nearly half the respondents indicated that up to 40 percent of aircraft customers coming onto their ramp did not buy fuel,” Enticknap says. “With the current U.S. FBO business model relying on fuel sales to fund their operation, this is an alarming development.”
Enticknap attributes this phenomenon of aircraft stopping on an FBO’s ramp without a fuel purchase to two factors. More flight departments are choosing to tanker fuel to their destinations and back to their bases. And more jets are more fuel efficient.
To adjust to this trend, Enticknap offers the advice he and Jackson share with FBOs at the NATA FBO Success Seminar: FBOs can charge customers a ramp fee and a fee to use the facility, he says.
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