NBAA Observations: Now Trending in the FBO Business
Wednesday, October 25, 2017 at 3:30PM
AC-U-KWIK in Aircraft trends, GE, NBAA-BACE, Part 135 operations, e-newsletter

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

NBAA's Business Aviation Convention & Exhibition (NBAA-BACE) is a great opportunity to get a 30,000-foot view of the FBO industry. Within the confines of the Las Vegas Convention Center, we found a representative cross section of large FBO chains, small independent “mom & pop” operations and everything in between.

Therefore, it's relatively easy to engage FBO owners, operators and managers in light but meaningful conversation as well as hear the latest buzz concerning the industry. 

First, the Buzz

A recurring topic of discussion was the recent General Electric (GE) announcement that it was selling its aircraft and shutting down its flight department. An economic move, we are told, in the wake of GE stock taking some sizeable hits on Wall Street and a company announcement of trimming $2 billion in costs.

Some FBO operators we talked to questioned whether this was a one-off, knee-jerk reaction to bolster stock prices or the beginning of a trend for other large corporate flight departments to follow suit. 

The silver lining for FBOs in this scenario is that GE indicated that it would utilize more charter aircraft to fulfill its company travel needs going forward. Thus, the net result could be a sustained number of GE generated business flights, via Part 135 operators, going to its traditional FBO locations.

Speaking of more charter flights, this leads us to the next topic.

Secondly, 135 Charter Operations are Up ... Again!

Many FBOs operators we talked to indicated theywere seeing more charter flights coming onto their ramp than they've seen in a very long time. Therefore, we wanted to verify if charter flights were indeed on the increase. Here is what we found:

This gives us evidence that FBO fuel sales, at least in some geographic locations, are being buoyed by the increase in charter traffic while other business aircraft flight categories are basically staying at the status quo.

Lastly, Exploring New Revenue Streams

As charter flights continue to increase, some FBOs are looking to capitalize on a potentially new revenue stream of catering to passengers arriving on Part 135 carrier flights booked through shared flight services such as JetSmarter. One interesting conversation we had was with an FBO in South Florida that has set aside lounge space in its facility to specifically accommodate JetSmarter passengers.

Adding accommodations for such services may make sense for FBOs seeking additional revenue streams as long as there is sufficient fuel uplift being sold at reasonable margins. The sale of additional services, such as car rentals and catering, are just icing on the cake.

We encourage you to add your comment on this subject below. Did we miss anything? What trends did you notice while exhibiting or attending NBAA-BACE? We'd like to know if you're experiencing an increase in charter flight activity. If you have any questions, please give us a call or send us an email: jenticknap@bellsouth.com, 404-867-5518; ronjacksongroup@gmail.com, 972-979-6566.

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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© 2017 ABSG

Article originally appeared on Flight Planning, Airport Information, General Aviation (http://www.acukwikalert.com/).
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