10 Critical Elements of an FBO Airport Lease
/By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group
As part of a new blog series, we'll take each of the six intangibles that can build equity in your FBO and give you valuable insight as well as insider tips to help you add intrinsic value to your business.
Starting at the top of our intangible list, developing a long-term lease with your airport authority is the lifeblood of your FBO operation and plays a large part in building equity in your enterprise.
The critical elements of a lease to understand, and that are a part of the negotiating process with the airport authority, include the following:
- Term and option years
- Operating rights
- Payments, including rental, gross revenue, flowage fees and out years to include escalators
- Building/ramp maintenance responsibilities
- Assignment sale clause
- Termination from FBO and lessor
- Improvements, new buildings and renovations
- Insurance, indemnity and hold harmless agreement
- Environmental liability
The tenth critical element, an Airport Minimum Standards document, should be part of your lease. We consider this one of the main six intangibles and will treat this as a separate subject in a future blog because it is a very important component with distinct elements.
In our next blog, we will break down these components with some additional tips to help you negotiate the optimum lease.
About the bloggers:
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.
Subscribe: