Story ID: 205
FBO Industry Survey Indicates Optimism
By: Curt Epstein
Caption: The Aviation Business Strategies Group noted increasing optimism in the health of both the economy and the industry.
Word Count: 353
On the eve of the NBAA Schedulers and Dispatchers Conference, the Aviation Business Strategies Group (ABSG) today released the results of its annual FBO industry confidence survey and, according to respondents, 2016 was a “mixed bag.” One-third reported a decrease in fuel sales, while nearly half said they saw increases ranging from 1 percent to more than 8 percent over 2015 totals.

“It was bittersweet for the industry, as more than 30 percent of the FBOs surveyed showed a decline, yet the very top performers, nearly 20 percent, reported an increase in fuel sales of more than eight percent,” noted ABSG co-founder and industry veteran John Enticknap. “Recovery in the number of hours flown by the business aviation aircraft fleet is slow to come, although 2016 showed incremental movement from month-to-month compared to 2015.” He noted that the prolonged presidential election cycle could have caused unease and uncertainty in the economy, which might have also dulled the recovery.

Looking ahead, the survey showed industry optimism, as 93 percent of the respondents predicted they would have either the same level of fuel sales for 2017 or see increases. When asked if the economy was headed in the right direction, more than half indicated yes, while 8 percent disagreed.

“This is a very bullish outlook going forward,” said ABSG co-founder Ron Jackson. “By comparison, in last year’s survey, only 27 percent said the economy was headed in the right direction.”

Based on its survey results, the company predicts that confidence in the economy by Fortune 500 aircraft operators will increase throughout the year, driving a gradual build-up of business aviation flight hours. That would translate into a steady 2.5 to 4 percent increase per month heading into the latter half of the year, which will spur an increase in repair and refurbishment on the MRO side of the industry, along with avionics upgrades.

 As in the past, aviation fuel prices will follow the market price of oil. They are expected to level out as oil stabilizes at between $55 and $60 a barrel, and FBO operators will seek to differentiate themselves by delivering a consistent, quality customer service experience.