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Friday
Oct282016

Business Jets, FBO Fuel Sales and the Pending Election

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group (ABSG)

Normally we stay well clear of the political arena when developing content for this blog. However, a U.S. presidential election year can sometimes create a negative effect on the economy, which can spill over into the business aircraft sector and potentially result in less FBO fuel sales.

Recently we talked to a few FBO owners and operators who participated in our Annual FBO Fuel Sales Survey and Forecast, and they indicated that fuel sales have leveled off a bit this past quarter.

We conduct our survey in January and release the results at the NBAA Schedulers & Dispatchers Conference in February. In the survey, we ask FBOs not only to indicate their fuel sales in relative terms for the completed year, but also to forecast what their fuel sales will be for the year ahead.

AdvertisementOver the past several years, the forecast has held pretty close to the actual results. The forecast from our last survey indicated that the outlook for 2016 remains optimistic with more than 90 percent of respondents predicting the same or increased fuel sales this year compared to their 2015 results. Further, 58 percent of FBOs surveyed predicted an increase in fuel sales. Of those, 40 percent expect an increase of 1 to 4 percent; the remaining 18 percent forecast an increase of at least 5 to 8 percent.

The question is: Will this trend hold up for 2016, or will FBO fuel sales results mirror what some of the largest consumer companies have been experiencing during this election year?

In a report issued this month by Bloomberg, companies such as Yum! Brands, Gap, McDonald’s, Signet and others, blamed poor sales on the election process.

Here is an excerpt from the report:

To hear retail executives tell it, the battle for the presidency between Republican Donald Trump and Democrat Hillary Clinton is causing Americans to put off buying everything from romance novels at Barnes & Noble and jeans from the Gap to burritos at Yum! Brand Inc.’s Taco Bell. They might even be delaying wedding engagements, not good news for companies like Signet Jewelers Ltd.

“The preoccupation with this election is keeping them at home, glued to their TVs and at their desktops,” said Len Riggio, the founder and chief executive officer of Barnes & Noble Inc. This election is “unprecedented in terms of the fear, anger and frustration being experienced by the public.”

The question for our industry is: Do you feel the election has put a damper on the economy resulting in less FBO fuel sales? 

Please give us your answer in the space provided below.

ABOUT THE BLOGGERS:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and is an IS-BAH Accredited auditor. 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.

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© 2016 ABSG

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