As business aviation continues its rebound from the depths of the global economic downturn a decade ago, optimism continues to grow among U.S. FBO operators, as flight activity and fleet utilization increases. According to industry data provider Aviation Research Group/U.S. (ARGUS), flight activity in 2017 eclipsed the three-million-hour mark for the first time since 2008, and year-over-year rose 5.5 percent over 2016.
That activity has translated to gains at the fuel pump in many places. In the annual FBO Fuel Sales Survey conducted by industry consultancy Aviation Business Strategies Group (ABSG), 53 percent of the service providers who responded said fuel sales increased in 2017 while another nearly 20 percent indicated that their sales were the same as in 2016. The survey also asked about their confidence in the economy. “We were encouraged to see that 73 percent gave the economy a strong thumbs-up,” noted ABSG co-principal John Enticknap. “By comparison, in last year’s survey, 53 percent approved the direction of the economy, and the year before, only 27 percent gave approval.” Based on that endorsement, 93 percent of those FBOs surveyed said they expected either the same or increased fuel sales in 2018.
“The consensus opinion from our clients is that business is relatively good, with growth in the 2 to 3 percent range, and stable margins,” Stephen Dennis, chairman of Aviation Resource Group International (ARGI), told AIN. “The outlook for the balance of the year is growth in the 3 percent range.” He added that the hiring of trained FBO personnel, especially at the general manager level, is becoming more difficult as a result of lower turnover in many senior and mid-level positions.
As a result of this stability, the needle is moving to a seller’s market, when it comes to the buying of FBOs. “The market for selling is good; however, the number of transactions remains low by historical metrics,” explained Dennis. “The transactions that are closing are skewed toward higher valuations.” While the FBO chains continue look for opportunities among the top-tier airports, the most recent round of major consolidation, which was capped off by Signature Flight Support’s acquisition of Landmark Aviation, has made that more difficult. “As we look back over the time since the turn of the century, we have seen a progressive reduction in the number of FBO consolidation opportunities,” said Dennis, adding that since 1980, the 10,000 FBOs in the U.S. has decreased by two-thirds. “This is not to say that we won’t see continued consolidation. It just means that transaction values will increase, and there will be fewer of them.”
Douglas Wilson, president of FBO industry advisor FBO Partners, noted that most of the top 200 airports in the U.S. have only one or two service providers, and those locations are now mainly owned by the chains. As an example, four of the FBOs that made up the top 5 percent in this year’s AIN FBO Survey were acquired by chains over the past few years. “You’ve got a significant number of players now out there in the field trying to acquire FBOs, all hunting for the same thing,” Wilson told AIN. In addition to the long-established chains such as Signature, Atlantic, Jet Aviation and Million Air, there are also new names, such as Ross Aviation, Hawthorne Global, Lynx and the latest, Modern Aviation. The last launched just this February, backed by private equity money, and is looking to grow networks of its own.
Among European airports, Paris’s Le Bourget remains the busiest business aviation airport, recording nearly 26,000 departures in 2017, while London Biggin Hill saw the largest growth last year at more than 16 percent, according to statistics provided by industry data provider WingX Advance.
“On the international scene, growth is accelerating, and advancing beyond the USA in several key markets in Eastern and Western Europe,” Dennis told AIN. “Very few operations are being sold internationally, as the most successful operators are increasing their investments in their operations, preparing for increased growth.”
Against this backdrop, we present the top locations in our annual FBO survey, as selected by AIN’s readers.
European business aviation activity has experienced a modest improvement of late. Between 2016 and 2017, departures from European airports rose by 4.6 percent, numbering 676,202 departures, according to data from the European Business Aviation Association (EBAA).
Private jet activity rose by approximately 5 percent during that period, observed Richard Koe, managing director of industry data tracker Wing X Advance. “The generally reported increase in global business aviation industry confidence is reflected in increasing flight activity trends,” he told AIN. While activity for privately owned aircraft and usage by corporate flight departments has not yet rebounded, “charter activity in Europe has clearly recovered over the last 12 months, especially business jets,” Koe added.
Overall, France saw the most private aviation departures in 2017, at nearly 130,000 for the year, according to EBAA statistics, with Paris Le Bourget leading the pack at nearly 26,000 flights, followed by Nice Cote D’Azur International Airport at more than 17,000 departures. Geneva, London Luton, Zurich, Farnborough, Milan’s Linate Airport, Vnukovo in Moscow, Rome’s Ciampino, and London Biggin Hill rounded out the top 10 European airports in terms total departures for the year, said Wing X Advance.
While Germany and the UK were second and third in terms of departures, each with more than 98,000, Spain and Greece saw the highest percentage growth in activity at 9 percent and nearly 15 percent, respectively, according to Wing X statistics. Incoming traffic from North America also rose by 4 percent year over year. “On the international scene, growth is accelerating, and advancing beyond the U.S. in several key markets in Eastern and Western Europe,” Stephen Dennis, chairman of Aviation Resource Group International (ARGI), told AIN. “Very few operations are being sold internationally, as the most successful operators are increasing their investments in their operations, preparing for increased growth.”
More business aviation activity is good news for the region’s fixed base operators (FBOs), and to serve those passengers and aircraft, Europe’s major airports have attracted capable service providers, which have established facilities in the North American style, with comfortable lounges and amenities for crews and passengers. Each year, in its FBO Survey, AIN asks its readers to rate the locations they visit, and the results show that the top service providers in Europe can compare favorably to their counterparts across the Atlantic.