FBO Business Strategy: Get the Offense Rolling

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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.

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Preparing for a New Business Reality: Unbundled Services, Tiered Pricing

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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.

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Preparing for a New FBO Business Reality as U.S. Cases of COVID-19 Surge

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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.

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FBOs Can Learn from Previous Crises and Prepare for New Reality

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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.

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Tip of the Week: Our Top 10 Tips eBook

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By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

For the last few years, we have written FBO Survival Tips that focus on the various strategies and tactics needed to survive the daily rigors of running a successful fixed base operation. After some great feedback, we decided to compile the 10 most popular tips into a comprehensive ebook resource for the FBO industry.

We are very proud to introduce FBO Survival: 10 Tips to Keep Your Operation Lean, Mean and Profitable. This book was made possible by the good folks at AC-U-KWIK and Penton. 

Acknowledging that market and economic conditions often dictate the size and scope of an operation, this book will help the FBO owner, operator and manager prepare for both the best of times and the worst of times and keep them focused on running a successful FBO.

In this book you’ll find 10 of our most popular tips as well as a bonus section, 3 Keys to FBO Success. Also included are some dashboard report templates you can use to keep track of your operation on a daily basis.

The book is available as a digital download at Amazon.com. Here is a thumbnail overview of each of the 10 tips:

FBO Survival Tip #1: Keep Your Customers Close and Your Margins Closer

In order to survive in any economic climate, FBOs should focus on the two most important revenue generators: valued customers & fuel margins.

FBO Survival Tip #2:  Avoid the “Ready, Fire, Aim” FBO/MRO Syndrome

To generate profitable transactions, FBOs must communicate across the enterprise, figure costs accurately and not overpromise.

FBO Survival Tip #3: Don’t Give it Away!

As fuel margins get squeezed by aircraft operators and fuel broker discount programs, FBOs need to charge for “free services” instead of giving them away.

FBO Survival Tip #4: Develop an Early Warning System

A crucial FBO survival strategy involves developing early warning reporting metrics designed to keep your fingers on the pulse of FBO operations.

FBO Survival Tip #5: Prepare to Operate in Your New Normal

After every major economic downturn, FBOs must establish a new operating benchmark that becomes their new normal moving forward.

FBO Survival Tip #6: Take Off the Blinders

FBO operators and managers can’t effectively run their facility without getting involved by walking around to gain a customer’s perspective.

FBO Survival Tip #7: Ask the Tough Questions!

If you don’t know what your customers think of your FBO operation, then you’re not asking the really tough questions.

FBO Survival Tip #8: Be a Savvy Business Operator

The FBO owner and manager should know and understand all aspects of the operation and what drives business profitability.

FBO Survival Tip #9: Avoid the Status Quo

About the time an FBO operator thinks things are running smoothly, that’s the time complacency sets in and things begin to slide.

FBO Survival Tip #10: Sharpen Your Negotiation Skills

Building successful stakeholder relationships in the FBO business often includes skillful negotiations. Sharpening these skills and thinking win-win are critical elements to getting what you want. 

FBO Survival Bonus: 3 Keys to Success

As an FBO Survival book bonus, the authors have detailed 3 fundamental keys to FBO operational success. 

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. 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.