By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group
As a follow-up to our Mid-Year FBO Fuel Sales Survey results posted in our last blog, we are taking out our crystal ball and gazing ever so cautiously yet optimistically into the next six months with the following observations.
In reviewing the primary survey results, we found 45 percent of respondents experienced an increase in Jet A fuel sales for the first six months of 2015 compared to the same period in 2014. Add to that another 26 percent reporting flat fuel sales during this period, and you have a grand total of 71 percent of the FBOs experiencing at least the same or improved fuel sales.
At first blush, this may not seem like a big deal, especially to the uninitiated. However, for the FBOs that survived and lived through the years of decline since the big economic bubble burst of 2008, this news is music to their ears. Finally, we are starting to see a positive trend.
Gazing back into our crystal ball for a moment, we see some more positive news for the FBO industry.
First let’s look at the data released by ARGUS International, Inc., which tracks the monthly business aircraft flight activity in the United States. For five consecutive months, March through July, ARGUS found that flight activity was positive for most or all aircraft categories compared to the same periods in 2014. This activity, we feel, is a start of a healthy trend: more business aircraft hours flown, more turbine aircraft on FBO ramps, more Jet A sales.
Although the General Aviation Manufacturers Association (GAMA) is reporting an overall decline in aircraft shipments for the first six months of 2015, our experience is that flight hours have to consistently increase before manufacturers see an uptick in their order books. As flight hours increase, the demand for new or replacement aircraft also increases. Historically, the two go hand in hand. From where we sit, it is just a matter of time before this happens.
In other economic news, the Fed recently reported that although the economy is expanding slowly, there is positive news in the U.S. manufacturing sector, especially in the automobile industry. Historically, as U.S. manufacturing increases and expands, business flight hours also increase giving credence to the NBAA and GAMA initiative No Plane No Gain.
As we put our crystal ball away until our next Annual FBO Fuel Sales Survey in January, we can say that overall, we are very bullish on the FBO industry right now.
In our next blog, we take a look at some of the answers received from FBOs on our mid-year survey when asked, “What has been your biggest challenge so far in 2015?”
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.
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