Story ID: 023aFBOSurveyIntro
FBO Survey Report: 2022 The Americas
By: Curt Epstein
Caption: As aviation rebounds from its Covid-induced slump, private aviation is leading the way, and FBOs are the beneficiaries.
Word Count: 592
With the world still navigating its way out of the pandemic, the aviation industry has seen many changes over the past year. Airline traffic has yet to return to pre-Covid levels, but business aviation has not only rebounded but set new records as a surge of new customers sought to avoid crowded airport terminals. All this has translated into more business at FBOs.
In Aviation Business Strategies Group’s (ABSG) annual FBO Fuel Sales Survey, 72 percent of respondents experienced increased fuel sales last year. “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,” stated ABSG co-principal and long-time FBO industry veteran John Enticknap. “Many FBOs are reporting fuel sales equal to, if not greater than, pre-pandemic 2019 levels.” And 64 percent of respondents anticipate increased fuel sales this year.
While corporate travel is slowly ramping back up, the leisure and private-owner activity has led to private aviation's resurgence and this segment is seeing some behavioral changes in the post-Covid environment. “Densely populated areas that have always been [the] traditional business and commerce centers, [and] we have started to see by no means a mass exodus, but a slippage if you will, to people turning their vacation homes into their primary residences as a function of telecommuting,” explained Douglas Wilson, president and senior partner of industry consultancy FBO Partners. “Certain markets that historically had more seasonality are growing faster than our traditional business and general aviation markets.”
That change is fueling an infrastructure boom as locations rush to provide services to meet an influx of clients. Analysts are attempting to determine where future aircraft will be based and if those trends will lead to new destinations among the top business aviation markets.
Consolidation and Private Equity
Last year, more than 250 FBOs changed hands—a record amount that was inflated by the sales of the industry’s two largest FBO chains: Signature Flight Support and Atlantic Aviation. Signature parent company Signature Aviation was sold in June to a consortium of private equity firms that included Blackstone, Global Infrastructure Partners, and Cascade Investments. Meanwhile, KKR, which acquired Atlantic from long-time owner Macquarie Infrastructure Investments, followed three months later with the addition of Ross Aviation’s 19 locations and Lynx FBO’s nine.
“What it means is private equity firms in particular that were interested in getting into the industry are now fully engaged,” Wilson told AIN. “All of a sudden there is a renewed search for inventory in the form of FBO acquisitions and there is simply less inventory.”
Another factor weighing upon FBOs is the labor market. As locations scramble to fill their staff needs, worker salaries have risen as a result of intense competition and some are now having to offer relocation bonuses to qualified line staff. With already tight margins, the industry will eventually have to reckon with higher prices at FBOs to account for these costs. Additionally, ABSG’s survey pointed to FBO industry concerns over possible hikes in oil prices due to inflation and international conflict.
Against this backdrop AIN once again tasked its readers to rate FBOs they frequented over the year in five categories: line service, passenger amenities, pilot amenities, facilities, and CSRs. While some FBOs may shine in one or two categories, to land at the top of the survey ratings a location must exhibit all-around excellence. We present to you this year’s top 5 percent.
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