FBO calculates profits by the truckload

No, Craig and Kim Powell, co-owners of Colorado Aviation in Colorado Springs, Colo., are not hauling in cash by the truckload. But they have altered the usual formula for calculating margins–and it seems to be working. Rather than evaluating fuel-price margins by the gallon, as most FBOs do, the Phillips 66 Aviation Performance Center-qualified FBO takes its numbers from each truckload of jet-A. The result is a longer-term outlook and a more volume-oriented business plan. Craig Powell said, “We’ve lowered margins but increased sales volume, which has improved the business.”

But even a dramatic increase in volume won’t work if margins are shaved too tightly. Powell turned to his computer skills to ensure his numbers were in line, and then took a page from his computer manuals to increase his marketing efforts. He commits about 8 percent of company profits to marketing, and one of his direct strategies is to target aircraft operators.

Using flight-tracking programs, Powell identifies aircraft operators, owners and pilots by aircraft type, frequency of stops and common flight routes. He can then contact the operator directly to solicit business based on fuel discounts. He said, “You have to give people a reason to come see you and it has to be a large enough discount to get them to change flight plans.” He admitted, however, “This approach might not work at all airports, but in certain regions of the country you can attract new transient business.” Powell referred, apparently, to transcontinental travelers who need to refuel en route and have some latitude as to their chosen routes.

It seems to be working for the Powells and Colorado Aviation. The FBO reported that in one month this spring it attracted a record 45 new jet aircraft customers.