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« Annual FBO Fuel Sales Survey: 75% of FBOs Report Positive Fuel Sales in 2018 | Main | Get Ready to Post Fuel Prices and Other Fees »
Friday
Dec212018

Year-End Review: State of the FBO Industry in 2018

As FBOs begin to close their books, there is evidence that 2018 was another banner year for the industry, which experienced a peak in business aviation flight activity and wild fluctuations in fuel costs.

Throughout most of the year, U.S. oil prices for West Texas Intermediate crude rose and fell with regularity, including an October spike to more than $70 a barrel before falling dramatically to a low of $46 this week.

For FBO owners and operators, the challenge has been to properly time fuel purchases while managing a fluctuating cost of inventory to ensure a consistent and reasonable margin.

As for business aviation flight activity, a midyear ARGUS TRAQPak report indicated a continuing recovery for Part 91, Part 135 and fractional operators. However, since July, flight activity has stagnated and decreased slightly in October and November. Still, the number of recorded IFR departures remains at or near 10-year highs providing strong transient FBO ramp activity.

At NBAA-BACE in Orlando in October, we had the opportunity to talk to numerous FBO owners and operators who indicated that 2018 was stacking up to be a very good year for fuel sales. These reports are consistent with the findings in the Annual FBO Fuel Sales Survey we conducted in January. Fifty-nine percent of survey respondents said then that they expected fuel sales to increase in 2018 compared to 2017.

In our survey at the beginning of the year, 73 percent of participants said the economy is headed in the right direction. Although the stock market has experienced recent declines, basic economic metrics indicate a strong economy headed into 2019 with unemployment nearing 3 percent, the lowest in 49 years, a positive gross domestic product growth rate of 3.4 percent, an increase in both personal and disposable income, and lower fuel costs which helps keep inflation in check.

During 2018, FBOs continued their investment in developing stronger safety programs, which help reduce ramp and hangar incidents and provide a better customer experience. More than 150 FBO locations are now registered in the International Standard for Business Aircraft Handling (IS-BAH) initiative, which is based on best industry safety practices.

Also in 2018, six aviation associations endorsed the “Know Before You Go” document, which encourages FBOs and aviation service organizations to be more open and transparent about fuel prices, fees and charges. As FBOs begin to adopt this recommendation, it will become a best practice throughout the industry that will help build stronger customer relationships.

Please leave any comments you have about this blog post below. If you have any questions, please give us a call or send us an email: jenticknap@bellsouth.net, 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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© 2018 ABSG

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