As FBOs closed their books on 2020, the sound heard around the industry was a collective sigh of relief as we ended of one of the most trying years in U.S. history.
As we turn the page on our calendars to a new year, it is time to take stock of where we are and where we are headed.
If Charles Dickens were to write this blog post about the results of our FBO Fall Fuel Sales Survey, he may very well have begun the way he so poignantly penned the beginning of A Tale of Two Cities: “It was the best of times, it was the worst of times.”
In this Covid-19 induced time of upheaval, we find an FBO industry trying to climb its way out of a very dark March and April, seeking the proverbial light at the end of the tunnel. While some FBOs have caught a glimpse of sunlight, others are seeing shrouds of fog frosting over the lens.
When operating an FBO in the Covid-19 pandemic era, it’s easy to get caught up playing defense. After all, the natural instinct is to preserve what we have. Apply for the PPP program, adjust operations and manage cash flow.
This conservative approach seems to have worked for many FBOs until the PPP program funds ran out. Now it is a wait and see game, hoping that business aircraft traffic will pick up and fuel sales will return to pre-pandemic levels.
No one really knows what the new normal for the FBO industry will be. Now is a good time to examine your current business model and make adjustments to keep your revenue stream as consistent as possible.
With this in mind, we suggest FBOs take a closer look at the European FBO business model in which services are unbundled.
FBOs continue to face a pandemic shaking the foundation upon which the FBO industry stands.
Since our last blog post in May, there have been reports of positive progress in dealing with the virus outbreak, but, in the United States, the gains may be short-lived.
Going into June, many states started to open businesses according to government-issued guidelines. Early reports of increased business aircraft flight activity have been encouraging. Part 135 charter operators and fractional aircraft owner programs both reported higher than anticipated demand for their services. Customers were seeking an alternative to crowded commercial airline terminals and the close mingling of strangers in the confined space of a commercial airline cabin environment.
Now, as June ends with a series of the highest daily totals of new cases of infection, a COVID-19 resurgence has some states, such as Texas and Florida, backtracking their business re-opening plans. In fact, some states have considered restricting airline traffic coming from states with increased COVID-19 case activity. Is business aircraft traffic next to be scrutinized?
This start-and-stop pattern will undoubtedly have a boomerang effect on the FBO industry.
No one can truly predict the future of the FBO industry, certainly not in these unsettled times.
Everything looked very rosy just a few short months ago. In our Annual FBO Fuel Sales Survey, published at the end of January, FBO operators were predicting another good year in 2020 following the growth and success of their businesses in 2019. The biggest problem the industry faced was finding and retaining good employees.
Now, the COVID-19 pandemic has presented a new business reality for which FBOs must prepare. No one knows exactly what it is going to look like. Reflecting on relative recent history can give us a potential barometer by which we can gauge and draw some conclusions.
In response to several incidents within a 19-month period, last week the National Transportation Safety Board (NTSB) issued a Safety Alert warning providers of jet fuel to take measures to prevent diesel exhaust fluid (DEF) contamination.
In a related news release, the Safety Board says it wants fuel providers to keep all chemicals in labeled containers and to add a label to all DEF containers that reads, “NOT FOR AVIATION USE.”
We also recommend that FBOs use this NTSB poster in their operations. Post it in the line service area as well as where any chemical, fluid or lubricant is stored.
Every year more than 27,000 ramp accidents are reported worldwide. Collectively, they cost an estimated $10 billion. The causes run the gamut from carelessness to not following standard operating procedures (SOPs), such as obeying ramp speed limits.
That is why it is important to follow established FBO industry best practices written in a user-friendly and teachable SOP format. Your SOPs are your standard for excellence and should cover all procedures in detail.
Hangar rash sounds nasty and is the bane of all FBOs.
We’ve all seen it. A line service technician gets in a hurry repositioning a GIV in a hangar and bangs the tail into another Gulfstream.
Say the estimated cost to repair the damage is $175,000. Assume the FBO’s insurance deductible is $25,000. That $25,000 is a big hit to the bottom line.
How does an FBO reduce the risk of this kind of incident? The answer is having a strong safety culture that invests in proper training of line personnel with a defined set of hangar and ramp movement practices as part of standard operating procedures (SOP).
Results of our Annual FBO Fuel Sales Survey are in, and we are happy to report that 75 percent of FBOs responding to the survey experienced positive — increased or the same — fuel sales in 2018 compared to 2017.
This is the third consecutive year we have seen an increase in fuel sales by more than half of FBOs responding.
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