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

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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.