NBAA-BACE Roundup: FBO Industry Upbeat on Reports of Positive Fuel Sales for 2019

Note—FBOConnection.com bloggers John Enticknap and Ron Jackson will be facilitating the next NATA Certified CSR Workshop, Dec. 10-11, New Orleans.

As 2019 winds down, the mood of FBOs attending the annual NBAA Business Aviation Convention & Exhibition (NBAA-BACE) held Oct. 22-24 in Las Vegas was upbeat with many reporting positive fuel sales for the year.

Several FBOs we talked to reported an increase in fuel sales in 2019 over 2018 from around 3 percent to more than 10 percent. These returns fall in line with the results of our Annual FBO Fuel Sales Survey forecast for 2019.

Another bright spot for the industry is the backlog of work coming into many FBO aircraft maintenance facilities. The report we received at the convention is that maintenance shops were busy with scheduling several months in advance. Most notably, avionics shops were booked full well into 2020. This is due to the last-minute decision of many operators to install ADS-B equipment on their aircraft. The deadline to comply with the FAA mandate for ADS-B Out capability is Jan. 1, 2020.

Along with this robust industry report comes the consequence of a tight labor market. The hiring and retention of FBO employees has been a problem for the industry for the past two years as the U.S. unemployment rate of 3.6 percent is at the lowest level in 50 years.

“It’s like a two-edge sword,” one FBO operator said. “On the one hand, we have a good, steady flow of business. On the other hand, we are having trouble finding good, quality customer service and line service employees, and when we do, it’s hard to retain them.”

(See our related blog post, “Six Tips for Hiring and Retaining FBO Technicians.”)

Another problem facing FBO owners and operators as we head into a new year is the potential of increased insurance premiums. One aviation insurance executive familiar with the situation told us that the insurance industry is experiencing fallout from aviation insurance underwriters who have been losing 15 cents for every dollar of premiums due to increased losses from insurance claims.

Over the past several years, the source said, FBOs have been the beneficiary of lower insurance premiums because of a competitive underwriting environment. With less underwriting competition, insurance rates are set to rise, perhaps dramatically. FBO operators can often help lower their insurance rates by developing an insurance story and presenting it to their insurance company. Insurance companies often take into consideration what FBOs are doing to mitigate risk of ramp accidents and incidents. We recommend FBO operators institute, at a minimum, a safety management system (SMS), which includes appointing a safety manager and setting up a safety committee. An industry program like IS-BAH checks many of these boxes.

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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