Is Your FBO Data Driven? If not, how do you know what's really going on?

By John Enticknap, Aviation Business Strategies Group

“The goal is to transform data into information, and information into insight.” - Carly Fiorni: President Hewlett Packard, 1999-2005

Do you really know what’s going on at your FBO? It seems many businesses operate on a day-to-day, crises-to-crises basis with the managers just along for the ride.

This has validity in numerous market segments, not just in the aviation services industry. During our NATA FBO Success Seminar, scheduled in Dallas on September 12, 13 and 14, we will discuss this and many other topics. However, for this blog post, let’s concentrate on data collection and what we can do to improve our financial numbers. Then, turn it into insight we can act on to operate our businesses more profitability.

We think it is fair to say most owner/operator FBOs provide a range of services. These may include fuel sales, flight training, aircraft rental, aircraft sales, maintenance and real estate rental. Now, maybe you don’t do all of these, but it’s safe to assume your FBO offers multiple services. So, how do you keep track of everything?

Many FBOs started their business by offering a variety of flight services, because their owners were flight instructors and/or flight examiners. Others started FBOs because of their A&P background and providing aircraft maintenance services. Still, others may have started working in line service and are now FBO managers.

Regardless of your background, you have an accounting system to keep track of billing and expenses. However, the big question is: Does your current system give you data that can be used to properly manage your business?

Data without understanding is useless! At our FBO Success Seminar, we suggest a number of Simple Strategies, as well as a number of Simple Tactics, to assist you with data management.

Here is the data we suggest you collect and utilize on a daily basis.

Start by using Dashboard Reports

So, what constitutes a Dashboard Report? While flying, you check and scan the dashboard/instrument panel repeatedly to monitor what is happening and adjust accordingly. Financial Dashboards do the same thing for your business. They’re a quick snap shot you take on a regular basis to make sure the engine of your company is running smoothly.

Just as you set up way points when you are flying, with a financial dashboard you set up data points you can use on a daily basis.
     
Here are some suggested data points to set up on your dashboard:
 
Line Service Business
Review your previous day’s retail fuel sales
Contract fuel sales
Airline fuel uplift
Month to date retail fuel sales
MTD contract fuel sales
MTD airline fuel uplift
Budget retail fuel sales, contract and airline fuel sales
Number of customer contacts yesterday

Maintenance Business
Mechanic hours billed yesterday
Mechanic hours paid leave, vacation
Mechanic hours paid
Yesterday mechanic productivity
Month to date productivity
Budget productivity
Parts sales dollars
Budget parts sales
Support staff hours paid
Number of customer contacts
Number of annuals/100 hr./inspections bid

Flight Operations
Flight instructor hours billed yesterday
Flight instructor hours paid
Flight instructor productivity
Charter hours billed
Charter hours available
Charter productivity
Customer contact - flight instruction
Sale contacts for charter
 
    
So, what kind of data are we collecting? You’ll notice a variety of sales data, labor data and marketing data. Why are these three data points the major drivers of your business?

1.    If you’re not getting a good, regular snapshot of fuel sales, plus flight hours and/or maintenance hours, you’re managing blind.

2.    After cost of sales, labor is your biggest expense. Labor hours must be reviewed and managed to assure you maximize productivity.

3.    You must continually market your business, retain existing customers and gain new customers. If you don’t grow - you go out of business.


If, after reviewing our list of data points you are saying, “well it’s going to take all day to gather that information,” then you need to examine your accounting system. It should be able to produce these reports.

We know from experience that programs such as TotalFBO®, one of the most popular FBO accounting and operating systems, provide these types of reports. Although the reports may not be in the exact format as we showed above, they’re in a readily manageable format. If you have a different accounting system, aviation specific or not, you should still be able to generate these daily Dashboard reports.

Make the adjustments with your accounting personnel, as well as department managers, to collect this data and start reviewing it on a daily basis. Now, that we have the information, it’s time to act on it.

One of the best ways to look at your statistics is to compare it to your history and your budget. (You did put a budget together at the beginning of your fiscal year, right?) By completing the budget process, it forces you to review and forecast sale levels in all departments. Then, you can plan your labor, expenses and other data points within your business.

Now, that we have current information, we can analyze and proceed accordingly. If our fuel sales are going well and above budget, we are able find out why. It could be a result of increased traffic or increased uplift per aircraft, etc.

As for aircraft maintenance, we can determine if productivity was at least 85 percent or meeting our budget goals? How many annuals/100hr/inspections have been quoted? We want to keep the shop busy! The same analysis should be completed for your flight school, charter department and any other activity within the business.

Now that you have insight, it will be easier to manage your business and you can relax knowing you have information systems in place to keep track of your progress. It’s a win-win for all involved.

Let us know what your think. We appreciate your input and comments. Please contact me at jenticknap@bellsouth.net

About the authors:

Ron Jackson
Ron Jackson is Co-Founder of Aviation Business Strategies Group and President of The Jackson Group, a PR agency specializing in FBO marketing and CSR training. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of “Mission Marketing: Creating Brand Value” and co-author of “Don’t Forget the Cheese!” the ultimate FBO Customer Service Experience. Ron co-developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection. 

John Enticknap
John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including President of Mercury Air Centers network of 21 FBO locations. He is an ATP and CFI rated pilot with more than 7,800 flight hours and is the author of “10 Steps to Building a Profitable FBO”. John developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection.

An MRI for Your FBO — Improving the Vital Parts of Your FBO

By Ron Jackson and John Enticknap

“Business is never so healthy as when, like a chicken, it must do a certain amount of scratching around for what it gets,” - Henry Ford

How healthy is your FBO? Is it running on all cylinders? Or is it in need of doing what Henry Ford suggests, “a certain amount of scratching around,” to find the golden nuggets buried in the business?

If you’re ailing, chances are you’d go to a doctor. If it’s serious enough, the doctor may order an MRI to aid in the diagnosis.

The financial and operational health of an FBO is no different. Sometimes we need a better look at all the vital parts in order to create a remedy that puts us on the path to prosperity.

At Aviation Business Strategies Group, we’ve put together our own version of an MRI to help FBOs become more successful. It’s based on years of working in the industry and helping ailing FBOs find a better way to run their businesses.

When we consult with FBOs, we break down the vital parts into an MRI review:

M = Maximizing Profits
R = Reducing Expenses
I = Improving FBO Productivity and Bottom-Line Performance

It’s a well-balanced, three-pronged approach to doing discovery work.

M= Maximizing Profits

When we look at the “M” part of the equation - Maximizing Profits - we want to see the various checks and balances an FBO has in place in order to understand their overall perspective of the business.

It all starts with what we call dashboard reports. These are the daily - sometimes hourly - reports set up by management to get a feel for what is being transacted at the FBO.

A good dashboard report is an FBOs virtual window or snapshot of the operation. Included should be fuel reports on each refueling; add the volume and price charged per gallon.

Other profit centers should be reported such as catering and requested line services including APUs, lav service and cabin cleaning. If you’re giving any of these services based on fuel volume, you should be able to see your margin on these transactions. If you’re not adding enough margin to the cost of your fuel to cover volume discounts and ‘freebies’ then you are not maximizing profits.

For those FBOs that have a maintenance shop, another dashboard should identify what jobs you have in the shop, the time allotted for the job and a detail of the parts being sold. And ultimately, it also should tell you the productivity of your technicians.

Same goes for any other services you offer - from rental cars to flight school operations.

Speaking of fuel margins, we find many FBOs don’t keep track of what’s in their tank. With today’s rapidly fluctuating fuel costs, it’s imperative FBO managers keep track of the price of each load that has been added to their tank and keep the margins steady throughout the dispensing cycle. If not, FBOs can find themselves upside down very quickly, and at the end of the month they may be wondering what happened to projected profits.

At the FBO Success Seminars we conduct for the National Aviation Transportation Association (NATA), we cover fuel margins, dashboard reports and other metrics in detail. We also cover timed purchases of fuel including the potential benefit of fuel hedging.

R = Reducing Expenses

There are many things an FBO can do to reduce expenses. Again, we cover this subject in detail at the FBO Success Seminar but here are a few things an FBO should consider:

• Negotiate a better fuel contract with your fuel provider. When it’s time to renew, there are things you can do to add value to your retail operation.        
• Negotiate a better agreement with the airport authority. You don’t have to wait until your agreement is about to expire. Put together a plan that will not only benefit your FBO but also benefit the service and facilities being offered at your airport.        
• Take a look at your credit card expenses. You may be surprised at the amount of money that’s going to the credit card processing service.  You have the right to negotiate a better fee/rate. After all, it’s your money.        
• Reduce your insurance premiums. Believe it or not, your insurance broker can become your best ally. Are you doing all you can to better this relationship? Do you have a good insurance story to share?        
• Take a look at outsourcing some of your services. Sometimes the internal fixed costs of providing aircraft detailing, cleaning and customer car washing - just to name a few - don’t add up to positive cash flow.        

I = Improving FBO Productivity and Bottom-Line Performance

The key to improving FBO Productivity is a workforce that is fully trained, motivated and dedicated to creating the best customer service experience.

Many FBOs have good technical training in place and subscribe to valuable programs such as NATA’s Safety First Professional Line Service Training (PLST) curriculum.  This kind of training not only gives the technician the proper tools to complete various tasks safely and efficiently, it also gives customers a heightened sense of comfort, knowing their aircraft is being looked after by professionals.

But just as FBOs don’t tolerate incidents on the ramp involving customer aircraft, they should not tolerate incidents involving poor customer service. Therefore, it’s equally important all FBO employees undergo customer service training that includes a customer service manual customized for their operation.

By standardizing the customer service experience, FBOs can begin to measure their productivity through:

• Repeat business.        
• Referrals.        
• Better bottom-line performance.        

At Aviation Business Strategies Group, our client FBOs have reached out to us in helping them not only provide customized customer service training, but also help with a team building program in order to bring employees closer together for the benefit of serving the customer.

The result is our memorable, Don’t Forget the Cheese!© Customer Service Training program and Soar Like and Eagle, Fly Like a Goose©, team building module. As you can tell by the program titles, we have a lot of fun with this which helps the employees in the learning and retention process.

If you would like more information on either of these programs or anything in this blog post, please contact ron@thejacksongroup.biz or Jenticknap@bellsouth.com

Also, if you would like to meet us in person, come to our next NATA FBO Success Seminar, September 12-14 in Dallas, TX. It’s being hosted at the award winning FBO Business Jet Center at Love Field.

About the authors:

Ron Jackson
Ron Jackson is Co-Founder of Aviation Business Strategies Group and President of The Jackson Group, a PR agency specializing in FBO marketing and CSR training. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of “Mission Marketing: Creating Brand Value” and co-author of “Don’t Forget the Cheese!” the ultimate FBO Customer Service Experience. Ron co-developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection. 

John Enticknap
John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including President of Mercury Air Centers network of 21 FBO locations. He is an ATP and CFI rated pilot with more than 7,800 flight hours and is the author of “10 Steps to Building a Profitable FBO”. John developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection.

Mid-Point 2012 FBO Gut Check … It’s Wheels-Up for Remainder of Year

By John L. Enticknap

“All growth depends upon activity. There is no development physically or intellectually without effort, and effort means work.” - Calvin Coolidge

We’re halfway through 2012, so let’s do a gut check to see how the FBO industry faired for the first six months of the year. Then, let’s take a look at what we can do to help our bottom line for the remainder of the year.

At the beginning of 2012, we wrote three blog posts that I encourage you to review.

Part 1: 2012 Business Outlook for FBOs

Part 2: Decreasing FBO Costs in 2012

Part 3: Improving FBO Productivity in 2012

To summarize our 2012 FBO economic forecast, in January we said if your FBO has a five percent growth for 2012, your firm will be a star! That is still very true. We thought for a while that the growth rate may be greater in the first quarter of the year, but growth was a meager 1.9 percent. There was a slight up-tick for the second quarter that may push us past 2 percent. However, our overall prediction for the year of a 2.2 percent growth rate will most likely be the norm.

As predicted, volatility on several fronts kept growth in check. Some of the newspaper headlines told the story:

—“Consumer confidence dwindles”

—“Fourth-straight drop as concerns linger”

—“Despite some relief from gas prices, joblessness still a worry”

In fact, the unemployment rate has been stuck at 8.2 percent for the past three months and only 80,000 jobs were added during June. In addition, wage income has grown 1.4 percent on an annual basis, which is less than the anticipated inflation rate.

However, the business and general aviation industry held its own for the first six months. Business flying appears to be maintaining a small increase over 2011 activity according to information from TraqPak.

“Business aircraft flying activity last month in the U.S. increased again year-over-year, with traffic rising 1.6 percent,” according to TraqPak data released July 1 by aviation services company AR/GUS. “Notably, Part 135 charter flying moved into positive territory for the first time in 16 months, climbing by 0.9 percent from a year ago. Part 91 activity still dominated by operational category and increased 4.3 percent from a year ago. However, activity at fractional providers appeared to worsen, falling 6.9 percent year-over-year.”

Another leading industry indicator is the pre-owned aircraft inventory which saw some positive movement.

“Pre-owned business jet and turboprop inventories eased further in April with more sales transactions thinning the herd,” according to business aviation market information firm, JetNet.

Inventory of used business jets fell to 13.6 percent in April, down by 0.7 percentage points year-over-year. Pre-owned business jet sales transactions rose 4.1 percent in the first four months of 2012 versus a year ago, while asking prices remained nearly flat, eking out a 0.1 percent gain to an average of $4.22 million. Average number of days on the market for a business jet dropped to 340 days, down 70 from the January to April period last year.

Meanwhile, turboprop inventory fell to 9.2 percent or 1.3 percentage points below April last year. JetNet thus considers the turboprop segment a seller’s market since it has moved below the 10 percent mark. Turboprop sales transactions climbed 3.1 percent in the first four months of the year, while average asking price rose by 1.7 percent, to $1.28 million. However, the amount of time on the market for used turboprops ticked up by 46 days to 345 days. This is not a great report and continues to support marginal growth predictions.

Looking Ahead

As most of us are aware, Jet A fuel prices have fallen from a high of $3.3624 GCPM in April to a low of $2.6600 for the week of July 2.

Now, in the middle of July we are starting to see Jet A fuel prices jumping back up. Therefore we think our discussion in the beginning of the year still holds true: fuel prices will remain volatile.

What are others saying?

“Crude has dropped 25 percent since late April so it’s possible we are oversold in the short term but risk to the downside remains. Analysts and participants have finally started to notice China may have serious issues. Consistent information is increasingly difficult to obtain but signs continue to point to a potential hard landing,” said Kirk Howell, Chief Operating Officer of SunGard Kiodex.

What FBO Operators Can Do

It is imperative that FBO operators manage their fuel inventory in terms of margin. By watching the changes in fuel prices, you should keep track of the cost of inventory in the fuel farm with the goal to purchase fuel to minimize high cost inventory. Holding your margin steady is critical as gas prices fall. Equally important is maintaining your margin as gas prices rise.

Are lower prices at your FBO stimulating extra sales? Based on what we are seeing from the industry, FBOs are maintaining their sales levels from last year. Any increase in sales activity is only slight. This is supported by the data on flight operations previously discussed.

Besides properly managing fuel inventory and future fuel purchases, FBO operators should continue to look for ways to run their businesses more efficiently. There are several resources available to get help - including attending an NATA FBO Success Seminar. The next seminar is scheduled for September 12-14 in Dallas, Texas.

Subjects include cost saving measures for insurance and credit card fees, and how to negotiate a favorable fuel supplier agreement. Other topics include; how conducting an external audit can save you money; and how to turn a marginal customer into a long-term profitable customer. Additional sessions will discuss appraising your FBO for leases, mortgages and M&A activities as well as legal issues that affect your business.

For the remainder of the year, let’s get our wheels up and make sure we are flying in the right direction. Let’s be active by putting effort into running our businesses as efficiently as possible. And along the way learn something that will add value to our business.

Let us know what you think----Please e-mail your thoughts and comments to: jenticknap@bellsouth.net

About the authors:

Ron Jackson
Ron Jackson is Co-Founder of Aviation Business Strategies Group and President of The Jackson Group, a PR agency specializing in FBO marketing and CSR training. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of “Mission Marketing: Creating Brand Value” and co-author of “Don’t Forget the Cheese!” the ultimate FBO Customer Service Experience. Ron co-developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection. 

John Enticknap
John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including President of Mercury Air Centers network of 21 FBO locations. He is an ATP and CFI rated pilot with more than 7,800 flight hours and is the author of “10 Steps to Building a Profitable FBO”. John developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection.

Want an FBO Customer for Life? Try Making the Customer Your Fan

By Ron Jackson

“Being a fan doesn't mean being there from the start. It means being there ‘till the end.”
-Anonymous

It’s time for a role reversal in the FBO customer service industry.

Ever since the term “customer service” was first used, our corporate view has been to put the customer on a pedestal and do everything to make them happy. That’s all fine and dandy, as Forrest Gump would say, but it’s a rather dogmatic and reactive approach that can make your customer relationship fragile and leave your employees feeling frustrated.

Here’s something new to think about. It’s a complete role reversal. Instead of you and your team thinking the customer is king, invite the customer to think of your employees the way we think of Babe Ruth, Lou Gehrig, Hank Aaron and Cal Ripkin, Jr. There isn’t a red blooded American alive that doesn’t look upon these four with awe. We are their fans.

Baseball not your sport? Think of someone you truly admire for doing something extraordinary. That’s being a fan.

So, why not create an environment at your FBO where the customer becomes your fan!

It’s really a new mindset that takes place in in the process of molding your customer service deliverable. Let’s start by visiting an old axiom, “Go the extra mile?” Where did this come from, and what does it really mean?

It’s actually biblical in nature. During the height of the Roman Empire, a soldier could force someone to carry his backpack one mile. Think how heavy pack must have been? It contained everything a soldier would need while marching for possibly months-on-end. Perhaps a change of clothes, probably food, knapsack and extra spear heads, among other things.

In those days, it was the law. However, it also was forbidden to force someone to carry the pack for more than one mile.

In the biblical account of Sermon on the Mount, Jesus proclaims if someone forces you to go one mile, go with them two. A modern day interpretation of this verse is to do the unexpected and go the extra mile. Give them something extra, something not required.

In the FBO business, we often see customers come onto our ramps and not purchase any fuel - not even a courtesy load. I’m sure this upsets most FBO managers and their service team.

So, how can we change the mindset of the customer? How can we catch them off-guard and give them something unexpected - something to ponder?

In other words, how can we invite them into experiencing our best customer service?

Can you imagine what would go through a reluctant customer’s mind when you offer to take out their trash, put ice in their galley or clean their lavatory – for free?

“But why would you want to do that?” the customer might ask. “I’m not buying any fuel.”

“I know!” your line service person responds. “That’s just how we do business here at Ajax. Now, how about some fresh brewed coffee for your galley?”

If the customer doesn’t respond with a fuel purchase at this point, chances are a fuel order will be placed the next time they return.

It’s all part of making the customer your fan by going the extra mile. It’s an open invitation to keep doing business with you and make an indelible impression that won’t fade anytime soon.

In today’s social networking climate, chances are that customer will tell others about their experience at your FBO. On the ‘buzz meter’, I think we all would rate this as priceless!

This is just an example of going the extra mile with a reluctant customer. What about the regular customer? What can you do to go the extra mile and make the next fueling a memorable experience? I’m sure you can think of a few things.

As mentioned, it’s all a change of mindset on the part of your employees. You may need to conduct some team-building exercises that help create a culture that rewards them for doing a good job. However, the reward is not monetary. It should be something as simple as a pat on the back from both FBO management and other team members.

At Aviation Business Strategies Group, the discovery work we do with clients indicates that most employees aren’t looking for money or prizes in order to do a better job. What they are really looking for is recognition.

“That was the best galley service I’ve ever seen,” an FBO manager might say to a line service technician. “Way to go. Keep up the good work.”

At Aviation Business Strategies Group, we’ve developed a complete FBO customer service training system called “Don’t Forget the Cheese!” It’s memorable program that can help mold and change current company culture, including your employee team dynamics.

If you’d like some more ideas about making the customer your fan, please give me a call at 972-979-6566 or e-mail me at Ron@thejacksongroup.biz.

Also, please join me and business partner John Enticknap for our next NATA FBO Success Seminar, September 12-14 in Dallas, Texas. In addition, we’ll be hosting a NATA Webinar on June 28 titled: The Most Important Question to Ask a Customer.

About the authors:

Ron Jackson
Ron Jackson is Co-Founder of Aviation Business Strategies Group and President of The Jackson Group, a PR agency specializing in FBO marketing and CSR training. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of “Mission Marketing: Creating Brand Value” and co-author of “Don’t Forget the Cheese!” the ultimate FBO Customer Service Experience. Ron co-developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection. 

John Enticknap
John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including President of Mercury Air Centers network of 21 FBO locations. He is an ATP and CFI rated pilot with more than 7,800 flight hours and is the author of “10 Steps to Building a Profitable FBO”. John developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for AcUKwikAlert.com titled: The FBO Connection.

Want to Deliver a Better Customer Service Experience? Start with External Operational Audits

By John L. Enticknap

What does an external audit program have to do with delivering a better customer service experience? Let’s explore the possibilities.

One of the most popular events at the National Air Transportation Association (NATA) FBO Success Seminar, conducted by the Aviation Business Strategies Group, is a discussion on lowering FBO insurance rates through better operations management. This includes training the CSR and executive staff on safety, customer service, technical procedures and practical application of quality aircraft ground handling techniques.

­­As part of the seminar, we discuss having a good “insurance story” – which essentially tells your insurance agent how the FBO strives to be proactive in preventing costly mishaps. It all starts with a comprehensive safety and training program. Your “story” includes the positive efforts of proper training with programs such as NATA’s Safety 1^st. 

One element of your safety program is an internal or self-audit of: your training, standard operating procedures, ramp operations and fuel quality control. Internal or self-audits are a positive part of your standard operating procedure. However, as you are aware, your FBO also is subject to external audits from airlines, FAA, airports and your insurance carrier, among others. 

Suffice to say, self-audits are necessary, but are not enough. When you do a self-audit, the problem is, you have a built in “human fudge factor”. It’s like giving yourself an annual physical and pronouncing yourself fit, instead of going to the doctor. 

Therefore, external operational audits need to be a part of your standard operating procedures and not just under the line service section. External operational audits also need to be a part of your Customer Service Program. Yes, we said Customer Service Program. What better way to demonstrate to a customer that you are concerned about their total customer service experience than by delivering: 

• Excellent marshaling of their aircraft
• Parking directions
• Proper chocking
• Ramp safety cones
• Marshaling into hangars with two wings walkers
• Fueling the aircraft with wing mats, without fuel spills, with the proper amount
• And yes, with the proper grade of fuel 

Superior customer service is all about earning the customer’s trust in your operation. It is not just about the fancy FBO facilities, or the smiles and pleasant greetings at the front counter. It’s also about your ramp operation and the customer’s perception that their aircraft is secure and out of harm’s way. 

External Audit Programs are the best way to assure your operation is running in accordance with your high standards. Not only safe operations, but conducting operations in such a manner that the customer has confidence that you’re doing things right! Some of the benefits and advantages of external audits include: 

• Providing a true validation of your internal or self-audit program
       – Self-audits are not enough
       – Need an unbiased ‘third party’ audit
       – Eliminates ‘fudge factor’
• You become a more efficient and safe FBO
• Verifies your Standard Operating Procedures
• Follows-up and benchmarks your training programs
• Keeps you in compliance with regulatory standards
• Enables you to establish a Safety Award Program
• Helps build a positive insurance story for your  brokers
• Can result in lower premiums, less costly accidents 

So, what kind of external audits should you conduct and who should you hire to complete the program? Having done numerous audits over the past several years and recently completed the NATA Accredited Auditor Training, my recommendation is to hire someone with proven experience and good references.

One of the newest audit programs available is the NATA Safety 1^st Ground Audit Standard. This program has two primary objectives:

1. To create a consistent operational safety standard for FBOs, airports, and others while increasing the overall safety level of these operations.
2. To provide on-demand charter, fractional and corporate aircraft operators with an alternative to costly proprietary audits of FBOs, airports and others.

So what does the Ground Audit cover? The audit screens seven separate operating areas within an FBO: Management Systems, Safety Management Systems & Quality Assurance, Training, Standard Operating Procedures, Security, Occupational Safety & Health and Environmental Policies & Procedures.

Who conducts the audits? NATA Safety 1^st manages the audit standard, but does not actually conduct the audit. For third party external audit certification, the FBO contracts with a NATA Safety 1^st trained Accredited Auditor. You may also do a self-certification, but the Accredited Auditor must be trained by NATA Safety 1^st.

For more information on this program visit www.nata.aero/groundaudit.

In conclusion, here is a recap of benefits from conducting an external audit: 

1. Safety. Not only for the customer, but for everyone involved in delivering the end product.
2. Better Customer Service Experience. A customer watches how an FBO works and determines, through perception, whether or not the FBO is taking care of business.
3. Lower Churn and Better Margins. A happy customer is a loyal customer. One willing to recommend your FBO, and also willing to pay a higher price to receive a better product delivered in a professional way.
4. Benchmarks Your Deliverables. Quality external audits will help measure your success in delivering a quality customer service experience. Utilized consistently, it will provide a benchmark for your service deliverable. It will reveal whether or not you’re on the right track - that your systems are operating well and if quality control is being maintained to its highest level. 

Tell us what you think!! E-mail us at jenticknap@bellsouth.net 

Accredited Auditor

Look for our next FBO Success Seminar in September 2012—Dallas, TX

http://nata.aero/Event.aspx

Ron Jackson
Ron is Co-Founder of ABSG and President of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese! the ultimate FBO Customer Service Experience. 

John Enticknap
John founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series. 

NATA’s FBO Leadership Conference: A Gathering Worth Attending!

By John L. Enticknap

 Take the attitude of a student, never be too big to ask questions, never know too much to learn something new.          —Og Mandino 

As a principal of Aviation Business Strategies Group, I’m always tuned into the FBO industry and attend various workshops and seminars to keep abreast of our ever-changing industry.

At the National Air Transportation Association (NATA) Leadership Conference and Day On-the-Hill, which I just returned from, I had the opportunity to rub shoulders with more than 200 industry leaders and get a sense of what is happening to the FBO business on a macroeconomic scale.

As a result, I’m ever more convinced that our industry is heading down the right road to economic recovery, with the caveat that a few steep hills have been placed in our path which from time to time may obstruct our visibility.

High Price of Fuel

One of the biggest obstacles we all face is the uncertainty of the price of fuel, the topic which dominated most of the conversation. We’ve all seen the run up in fuel costs in the last six months—it’s having an effect!

Avgas is now over $5 a gallon. Jet A will go up this coming week to $3.26, from $2.90 GCPM in December. Our flying community continues to feel the strain. The FBOs we talked to, in general, have seen a flat first quarter. The good news is most FBOs have seen their fuel uplift grow since the down trend of 2008/2009. However, the business has since flattened out. Most do not foresee any major growth this year because of the continued price pressure. 

During the Thursday morning seminar, “Oil Company Perspective”, it was very interesting to hear the discussions on fuel supply, both avgas and Jet A. 

With regards to avgas, the suppliers reaffirmed availability is OK. However, as they noted, only a limited number of refineries in the U.S. make avgas, and there is only one supplier of the lead that is used in the refining process. That vendor has assured the aviation community they will continue to make the lead additive. 

On the horizon, however, is the issue of lowering or eliminating the lead from avgas. Then there is the recently filed lawsuit, “Friends of the Earth” vs. the EPA. 

In addition, there is the lawsuit that was filed in California. NATA is already involved and assisting our members. This all adds much uncertainty to the future of avgas for high performance piston engines. For the short term we’re OK, but the future is not clear at this point.

Jet A is not in short supply, but is under pricing pressure from the same factors as overall mogas price speculation and other petroleum products. There are regional price differentials due to a number of factors, according to the oil company speakers, among them Marty Hiller from World Fuel, Joel Hirst from Avfuel and Bryan Faria from ConocoPhillips. 

Of particular note was the information that in North Dakota there is an excess of crude due to recent successful exploration. In addition, there is plenty of crude from other new sources in the U.S. Therefore, pricing of fuel today is not related to crude issues today. 

The fuel suppliers further discussed the FBO fuel marketplace, and the consensus is fuel costs will remain relatively high. Corporate customers are going to continue to seek contracts and discounts from posted pricing and, most of all, good value. 

The European FBO business model, where FBOs charge a la carte fees, will not be a major factor for American FBOs. 

Customer Service Training 

The Disney Institute gave a presentation on customer service which was one of the highlights of the conference. Experienced managers had a chance to hear and learn from one of the premier customer service providers in the country! 

All the attendees know that customer service is the real differentiator when it comes to good FBOs vs. great FBOs. If you missed this seminar, we strongly recommend you attend one in your city and train all your staff on Customer Service. It’s key to your success. 

A couple of thoughts we’ll pass along are about the use of name tags. All your employees should have a quality name tag, with their first name being prominent and including the city where they live. The tag should be engraved with your logo and your Unique Value Proposition or UVP. And always use the customer’s name when you engage them. 

Day On-the-Hill

More than 100 of the attendees also were part of the Day On-the-Hill. We met with our respective House and Senate representatives and discussed the prominent political issues affecting our industry. I encourage you to talk to your U.S. Representatives. Since they are up for re-election this year, they should listen. Talk to your Senator as well. Many of them are also up for re-election.  Some of the issues we discussed included:     

• Fuel Fraud Provision
• Freedom from Government Competition Act
• Temporary Flight Restrictions
• Large Aircraft Security Program
• Flight Management IRS Excise Tax 

If you need help, contact NATA and talk to Eric Byer, Vice President, Government & Industry Affairs. 

This conference was well worth the time for the attendees. The best feature was the opportunity to be able talk to our peers and learn from each other. The FBO business is a dynamic and ever-challenging business. NATA provides a unique forum to allow us to enjoy our great aviation heritage and opportunity. We are all aware of the upcoming changes in the leadership at NATA and trust the future will allow our organization to continue to flourish.

Congratulations to all the award winners. Attendees toasted the industry's best at NATA's annual Industry Excellence Awards dinner and presentation. Top honors went to Mary M. Miller, Vice President, Industry & Government Affairs for Signature Flight Support/BBA Aviation; and Kenneth C. Ricci, Chairman of the Board of Flight Options and CEO of Nextant Aerospace.

Thanks and look forward to hearing from you.  Send your comments to John L. Enticknap   jenticknap@bellsouth.net

Ron Jackson
Ron is Co-Founder of ABSG and President of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese! the ultimate FBO Customer Service Experience. 

John Enticknap
John founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series.