FBOs Can Learn from Previous Crises and Prepare for New Reality

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.

After the events of Sept. 11, 2001, it took the airline industry nearly three years to recover. This reference point is important to many FBOs that rely on commercial carrier refueling contracts as a way to supplement their business aircraft fuel sales.

Then, following the financial crisis of 2008, there was a very prolonged recovery for the FBO industry. During this time, some FBOs simply did not survive. Further, there was a lot of FBO industry consolidation.

Looking ahead for the remainder of this year, what we do know is that it is going to take time for the FBO industry to recover and stabilize. Fuel sales will continue to be under pressure, and aircraft traffic on the ramp will be light.

Optimistically, some have predicted that business aviation might recover faster than the airlines because of the newly found social distancing lifestyle. No doubt there will also be an increased focus on other personal health and safety issues. As a result, FBOs should be able to offer additional services, such as disinfecting aircraft interiors, which will provide another revenue stream.  

Customers should come to expect paying a premium for these types of add-on services. FBOs should not be tempted, as in the past, to give these services away. There is no way that operating with diminished fuel sales volume will be able to cover FBO services that have been given away in the past. As we teach in our NATA FBO Success Seminars, “don’t give it away.”

In our next FBO Survival 2020 blog post, we will take a look at how changing the current FBO business model will help FBOs deal with decreased fuel sales by creating additional sources of income.

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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