Managing the Four R’s to Profitability
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CREDIT: GETTY IMAGES/Khanchit Khirisutchalual
For FBO owners and operators, mastering and managing the “Four R’s” is vital to the success of your enterprise. The four R’s are:
Risk Management
Relationship Management
Refueling Management
Real Estate Management
By managing these four R’s on a daily basis, FBOs can better navigate the ups and downs of the business cycle. We recommend having these four elements on the desktop computer dashboard as a daily reminder to touch each one in some meaningful way.
Sample Dashboard Matrix
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Risk Management · Task: Safety Committee Meeting |
Relationship Management · Task: Call customers to thank them |
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Refueling Management · Task: Check Margins |
Real Estate Management · Task: Review Ajax Hangar Rent Status |
For this blog post, we’ll discuss the topic of Risk Management within the FBO environment.
Managing risk is essential to help protect not only the enterprise, but more importantly, the health and well-being of all stakeholders, to include customers, employees, vendors and suppliers. In essence, anyone coming in contact with, or entering on to, the leasehold area.
Managing the safety and security should be priority number one. It is estimated that aviation accidents cost the industry billions of dollars each year. For the general and business aviation segment alone, it is estimated that accidents and incidents can cost the industry from $1.6 billion to $4.6 billion annually.
With this amount of liability on the line, an FBO can’t afford to simply have a written SOP in place. This is a reactive approach. Instead, we recommend an investment in a proactive approach where all employees are fully invested every day, every hour, every minute.
Just think of the benefit to your bottom line if any of the following common events were significantly reduced: hangar rash, damaged propellers, broken static wicks, damage to aircraft nose wheels, mis-fueling or an over-fueling that result in a fuel spill.
Although these types of incidents are not totally preventable due to the human condition, there is a solution to help mitigate risk and lower your exposure to a level as low as reasonably possible.
By installing an active Safety Management Systems (SMS) in the enterprise, FBOs have a proactive tool to help mitigate risk. An SMS has long been recognized as an effective constraint to avoid events (i.e.: accidents and incidents). Through established policies, practices and manuals, the SMS system acts as a guide from beginning to end of tasks, by utilizing established operational and management techniques to manage the day-to-day conduct of aviation-based businesses.
The program helps mitigate all events with any of the following consequences:
Injury to employees
Injury to non-company personnel
Damage to equipment, material or property owned or used by the company
Damage to non-company equipment on company property, such as a customer’s aircraft
Creating a more secure environment from potential outside security threats
Protecting the environment
However, having an SMS guide in place is just half of the story and half the effort. The proactive element involves the SMS occupying all work areas and becoming imbedded into the employee culture. It must be at the forefront of everyone’s daily activities and requires a buy-in from everyone including those at the management and supervisory levels.
The Buy-In
The overall goal is simple: Create a safety conscious culture by identifying and mitigating risk. Attainment of that goal requires participation by all. Problems can’t be fixed unless there is a commitment by all employees to participate in the reporting of hazards, events and unsafe conditions.
This process involves two primary actions:
Installing a representative employee member safety committee
Initiating a robust voluntary hazard safety reporting system
Through an active safety committee and a robust reporting system, the SMS process can be monitored, measured, analyzed and improved.
For those FBOs seeking to install an effective SMS, we recommend becoming an International Standard for Business Aircraft Handling (IS-BAH) registered enterprise. Not only does the IS-BAH program incorporate a robust SMS, it takes safety to the next level
According to the IS-BAH website: An IS-BAH-registered Ground Handling Service Provider gains independently verified recognition by accredited auditors for having a thorough safety management development process that meets and exceeds the minimum safety requirements.
As a voluntary program, IS-BAH is the first industry standard to bring the SMS concept to ground handling and will enable handlers to meet ICAO SMS requirements. IS-BAH follows the structure of the IS-BAO Program and is the global industry standard for handlers and operators around the world to meet the coming SMS requirements from the International Civil Aviation Organization (ICAO).
© 2025 ABSG/TJG
Please leave any comments you have about this blog post below. If you have any questions, please send us an email: John Enticknap, jenticknap@bellsouth.net; Ron Jackson, ronjacksongroup@gmail.com.
ABOUT THE BLOGGERS: John Enticknap is the founder of Aviation Business Strategies Group (ABSG). He 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 ABSG and president of The Jackson Group (TJG), a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.