Nearly 70% of FBOs Reeling from Covid Sting in 2020
/By John Enticknap and Ron Jackson, Aviation Business Strategies Group ABSGgroup.com
The effects of the Covid-19 bug on the FBO Industry in 2020 has left nearly 70% of FBOs in the U.S. and Canada reeling from its nasty sting. This is the overall takeaway from our recent Annual FBO Fuel Sales Survey.
In total, 67% of survey respondents said they had a decrease in fuel sales in 2020, compared to 2019. This is by far the most negative responses we have received in the eight years we have been conducting this survey.
However, not all the news was bad as nearly 12% of survey respondents indicated that they had increased fuel sales of at least 5%, with 9% having an increase greater than 8%. It appears that the saving grace was the result of the fairly robust charter market which picked up momentum during the year.
With the Covid-19 human distancing awareness recommendation, chartering aircraft and the personalized FBO environment became a popular choice as an alternative to airlines and crowded commercial terminals. FBOs located primarily in the South, as well as recreational and second home destinations reported steady transient traffic that helped buoy otherwise soft Jet A fuel sales.
Another section in our survey polls respondents with regards to confidence in the economy. With only 18% providing a positive response, 42% said the economy is headed in the wrong direction. By contrast, the results of last year’s survey showed 73% of respondents were positive about in the direction of the economy while only 7% were concerned.
A follow-on question from the 2020 survey asked FBOs whether they would be offering Sustainable Alternative Fuel (SAF) to their customers during 2021. The survey results showed that 86% of respondents said they would not be offering SAF with only 1% indicating they would, while 13% were undecided.
This is similar to the results from last year’s survey and does not surprise us, as we find there are still a lot of questions from FBO operators regarding the availability of the fuel, as well as a higher cost factor. It will be interesting going forward to see if SAF will become mainstream as more-and-more aircraft operators adapt and adopt its use.
Another area of our survey asks FBO operators to share their concerns and greatest challenges facing the industry. An open-ended question resulted in these top five concerns:
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- Effects of the Covid-19 pandemic on the economy, transient aircraft traffic and keeping a service team intact
- Cost of Jet A and Avgas going up and economic inflationary concerns
- More government regulations, rising airport fees and increased taxes
- Increased insurance premiums and lower cash flow
- Effect of green energy rhetoric could slow economic recovery and stymie flight department activity
In our next blog, we’ll talk about our FBO industry forecast for 2021.
Please leave any comments you have about this blog post below. If you have any questions, please give us a call or send us an email: jenticknap@bellsouth.net, 404-867-5518; ronjacksongroup@gmail.com, 972-979-6566.
ABOUT THE BLOGGERS: John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and is an IS-BAH Accredited auditor. 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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