The effects of the Covid-19 bug on the FBO Industry in 2020 has left nearly 70% of FBOs in the U.S. and Canada reeling from its nasty sting. This is the overall takeaway from our recent Annual FBO Fuel Sales Survey.
In total, 67% of survey respondents said they had a decrease in fuel sales in 2020, compared to 2019. This is by far the most negative responses we have received in the eight years we have been conducting this survey.
When operating an FBO in the Covid-19 pandemic era, it’s easy to get caught up playing defense. After all, the natural instinct is to preserve what we have. Apply for the PPP program, adjust operations and manage cash flow.
This conservative approach seems to have worked for many FBOs until the PPP program funds ran out. Now it is a wait and see game, hoping that business aircraft traffic will pick up and fuel sales will return to pre-pandemic levels.
No one really knows what the new normal for the FBO industry will be. Now is a good time to examine your current business model and make adjustments to keep your revenue stream as consistent as possible.
With this in mind, we suggest FBOs take a closer look at the European FBO business model in which services are unbundled.
FBOs continue to face a pandemic shaking the foundation upon which the FBO industry stands.
Since our last blog post in May, there have been reports of positive progress in dealing with the virus outbreak, but, in the United States, the gains may be short-lived.
Going into June, many states started to open businesses according to government-issued guidelines. Early reports of increased business aircraft flight activity have been encouraging. Part 135 charter operators and fractional aircraft owner programs both reported higher than anticipated demand for their services. Customers were seeking an alternative to crowded commercial airline terminals and the close mingling of strangers in the confined space of a commercial airline cabin environment.
Now, as June ends with a series of the highest daily totals of new cases of infection, a COVID-19 resurgence has some states, such as Texas and Florida, backtracking their business re-opening plans. In fact, some states have considered restricting airline traffic coming from states with increased COVID-19 case activity. Is business aircraft traffic next to be scrutinized?
This start-and-stop pattern will undoubtedly have a boomerang effect on the FBO industry.
No one can truly predict the future of the FBO industry, certainly not in these unsettled times.
Everything looked very rosy just a few short months ago. In our Annual FBO Fuel Sales Survey, published at the end of January, FBO operators were predicting another good year in 2020 following the growth and success of their businesses in 2019. The biggest problem the industry faced was finding and retaining good employees.
Now, the COVID-19 pandemic has presented a new business reality for which FBOs must prepare. No one knows exactly what it is going to look like. Reflecting on relative recent history can give us a potential barometer by which we can gauge and draw some conclusions.
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