Story ID: 
Landmark Integration Boosts Signature Profits, Revenues
By: Kerry Lynch
Caption: Revenues increased 18 percent and profits 13.6 percent, while margins reached 20 percent for Signature in the first half.
Word Count: 403
Signature Flight Support enjoyed a 13.6 percent gain in profitability in the first half of the year as the FBO network has begun to reap the benefits of its integration with Landmark Aviation, Signature parent company BBA Aviation reported yesterday. With a presence now at more than 200 locations following last year’s acquisition of Landmark, Signature “is making encouraging headway in realizing the benefits of its unique and high quality global network and in enhancing its network performance,” BBA said.

Profitability also improved as business and general aviation movements grew by 3 percent in the U.S. and 6 percent in Europe during the first six months, BBA noted. Revenue at Signature increased 18 percent to $802.8 million, while underlying operating profit jumped to $160.8 million. Margins reached 20 percent.

In addition to contributions from growth through acquisitions and increased movements, BBA said revenues benefited from increased fuel prices.

BBA noted that since the integration with Landmark, the company has “focused on optimizing” the network, including negotiating with many of its customers, focusing on its heavier users first, for packaged services. “During the first half, a range of important contract negotiations were successfully concluded, including with many of Signature’s largest customers, and the group is confident that the outcome demonstrates the ability of Signature’s unrivalled network to deliver value and satisfy the needs of its customers,” BBA said, adding, “Signature is continuing to work with its broader customer base to deliver value across the network.”

Meanwhile, BBA reported mixed results at its aftermarket services companies, with Ontic performing well but its engine repair and overhaul (ERO) business still facing “challenging conditions.” Ontic, which provides legacy parts and aircraft support, saw revenues increase by 34.2 percent to $94.2 million. This boost reflects the recent acquisition of GE Aviation’s legacy avionics business. On an organic basis, BBA reported, revenue was up 8.6 percent.

Revenues slid by $21.4 million for the ERO business, however, dipping to $248.5 million in the first half. BBA cited depressed volumes in legacy midcabin engines and rotorcraft engine overhauls, along with reduced workscopes and competitive pricing. “Nevertheless, while the small thrust engine repair and overhaul market remains competitive and volatile month-to-month, ERO did see improvements in demand for overhauls in certain Pratt & Whitney [Canada] and [Rolls-Royce] Tay markets, as well as market share gains for the [Honeywell] TFE731 over the course of the first half,” BBA said.