FBOs Brace for a Possible Industry-wide Slowdown

FBO Midterm and NBAA Report

By John Enticknap and Ron Jackson, Aviation Business Strategies Group ABSGgroup.com

The robust increase in Jet-A fuel sales following the Covid-19 pandemic has seemed to hit a bit of a headwind as FBOs brace for a possible industry-wide slowdown. This is part of our takeaway from discovery discussions conducted at the Annual NBAA-BACE held October 18-20 in Orlando, FL.

Taking place just prior to the U.S. midterm elections, the NBAA setting provided the perfect forum for debating the effects of inflation and higher aviation fuel costs on the state of the FBO industry. Here we heard multiple reports of transient aircraft activity throttling back at various FBO locations throughout the U.S.

“It’s been a good run for us with some months registering record fuel sales,” one FBO operator told us. “However, we have seen a leveling off and even a slight decrease in flight activity over the past several months. We are just hoping the economy has a soft landing.”

Besides a moderation in fuel sales, many FBO operators we talked to remain concerned about several issues that continue to plague the industry. Chief among these concerns are:

·        Hiring and retention of employees
·        Increase in wages
·        Elevated insurance costs
·        Higher interest rates

Human resource issues seem to top the list of major concerns for operators. Several FBO owners and operators lamented that the employee hiring landscape has changed since the beginning of the Covid pandemic.

“The mindset has seemed to change among the employable and available workforce,” said a concerned FBO operator. “When interviews are scheduled, people do not show up. Also, some that we do hire seem to have issues and just don’t last in the job.”

To assist with these issues and retain existing team members, many of the FBO managers we talked to indicated they have increased their existing employee base pay as well as established a higher starting hourly rate for new hires. Examples of starting wages ranged from $18 to $21 per hour with a bump in pay after 90 days.

As part of our discovery work, we found FBO owners are finding it difficult to attract qualified people, especially skilled maintenance technicians because of competition from other industries. While the job market in some industries and regions favors employers, candidates with in-demand skills likely won’t have to wait long to find a new opportunity.

We also discussed SAF fuel with many of the FBOs in attendance. As we discovered in our most recent FBO Fuel Sales Survey, the industry is slow to adapt and adopt SAF as there are still several barriers of entry including SAF availability and the cost of transporting the fuel from a limited supplier network.

But perhaps more importantly, we found a general gap in the educational and communications process, as mainstream independent FBOs are not fully aware of how SAF fuel is made, stored and used; not to mention how the Book and Claim process is going to work to support the use of SAF.

Note: At the NBAA-BACE, it was announced that NATA and Aviation Business Strategies Group will resume the popular FBO Success and Management Seminar in 2023. Bloggers John Enticknap and Ron Jackson will facilitate this two-day seminar scheduled for April 25-26 in New Orleans, LA. For more information and to register for the seminar visit the NATA website at www.NATA.aero/events

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 (ABSG) 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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