Nearly three-quarters of the FBOs in the U.S. and Canada saw higher fuel sales last year than they did in 2020, according to Aviation Business Strategies Group’s (ABSG) annual FBO fuel sales survey and industry forecast. The company's forecast was released today on the eve of NBAA’s Scheduler’s and Dispatchers Conference, which opens tomorrow in San Diego, California, and marks the first time the show is being held in person since 2020.
Underlining the post-Covid boom in private aviation flight activity, 40 percent of the survey respondents indicated they saw more than an 8 percent improvement in fuel sales year-over-year, while an additional 32 percent said they had increased between 1 and 7 percent.
“After the Covid-induced recession of 2020, there appears to be a very rapid recovery in fuel sales for most FBOs responding to our survey,” explained company co-principal and industry veteran John Enticknap. “In fact, many FBOs are reporting fuel sales equal to, if not greater than, pre-pandemic levels recorded in 2019.”
However, ABSG co-principal Ron Jackson noted that it is not a situation of a rising tide lifting all boats. “Of the FBOs reporting, 16 percent said they had a decrease in fuel sales in 2021 compared to 2020, while 13 percent indicated about the same fuel sales.” Some locations that depend on avgas sales reported headwinds due to a depressed flight training market and fuel supply disruptions, he added.
The survey also asked FBO operators what they believe are the greatest challenges currently facing the industry. Among them are inflation and higher fuel prices affecting traffic flow; the ability to attract and keep employees, along with the costs associated with training a more transient staff; higher business costs, including insurance and employee wages and benefits; increased government regulations, airport fees, and taxes; and major disruptions in the supply chain wrought by Covid and geopolitical issues.
ABSG predicts that the price of aviation fuel will experience uncertainty for the rest of the year with upward price pressure on the price of crude oil repeatedly breaking the $100 per barrel threshold and spikes of as high as $130 a barrel on the major indexes. “Until the war in Ukraine is settled and a realistic global view on oil demand is established, expect a continued up and down pricing cycle with occasional wild swings,” the company cautioned. It advised FBO operators to be particularly mindful of their inventory and adjust fuel margins regularly to keep pace with the fluctuations.
As well, with concerns still swirling around Covid, ABSG explained that aircraft operators, particularly those who fly internationally, will tend to favor service providers with an in-place safety management system and/or an IS-BAH registration. These facilities are perceived to have imposed stricter health and safety measures to protect their clients and staff, the company said.
With all these variables, 64 percent of FBO respondents expect to see an increase in fuel sales over 2021, with 11 percent expecting more than an 8 percent rise. Nearly one-quarter expect their sales to remain static, while 11 percent are planning for a decline in sales volume.
The company also asked FBOs whether they would be offering sustainable aviation fuel this year to their customers. Only 1 percent responded affirmatively, while 20 percent remained undecided. Those answers match the responses from last year—the first time ABSG included this question in its survey.