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On the fly

FBOs in 2014 and beyond

The term FBO is so well established as to need no explanation. Wherever in the world an airport or airfield exists that handles transient as well as based traffic, it is highly likely to house an FBO.

FBOs originated in the US in the late 1920s. Until that time, US civil aviation was largely unregulated. Pilots would often land their aircraft in a convenient field and operate from there for a few days, making what living they could from giving rides, demonstrations, or lessons before moving on. Mechanics and instructors traveled with the aircraft, and pilots bought fuel from local suppliers.

This on-the-fly type of business came to an end with the Air Commerce Act of 1926, which, among other things, established training criteria and required pilots and mechanics to be licensed. As more airports were built, the transient support activities associated with general aviation gave way to permanent business locations, or fixed base operations.

Over the years, the number and range of services offered by FBOs grew from the basics — like fuel, parking, hangarage, and maintenance — as the businesses took a leaf from the hospitality book and began offering crew members and their passengers more amenities and services. Wilson Air Center, for example, emerged from — and based much of its business model on — the Holiday Inn network founded by Kemmons Wilson in 1952. The original Wilson Air Center Memphis, TN (MEM) has since been joined by Wilson Air Centers at Charlotte, NC (CLT), Chattanooga, TN (CHA), and Houston/Hobby, TX (HOU).

The consolidation trend

In the US, as elsewhere, the past 20 years have seen the rise of the FBO chain. The trend toward mergers and consolidation in the industry can be explained in part by the allure of profits on the sale of fuel — typically the largest component of any FBO’s revenue — and the increased buying power that comes with consolidation and bulk purchasing.

The ways in which FBOs make their money are a frequent subject of contention among those who use their services. Topics known to make some pilots’ blood boil include ramp fees, service bundling structures, and corporate fuel deals. But the bottom line, as always, is the bottom line. Like all businesses, FBOs need to make a profit in order to survive. In the case of some chains, it may not be necessary for each individual facility to make the same level of profit, because the system allows a certain amount of flexibility.

Among the dwindling number of privately-owned FBOs are some famous names. They include Showalter Flying Service at Orlando/Executive, FL (ORL), which has been in business since 1945 and regularly hosts the BACE (née NBAA) Convention static display and visiting traffic.

Clay Lacy founded Clay Lacy Aviation (CLA) in 1968. CLA’s two FBOs — the original Van Nuys, CA (VNY) location and Seattle/Boeing Field, WA (BFI) — are actually only a small part of Clay Lacy’s aviation enterprise.

Equally well known, Galvin Flying Services at Seattle/Boeing Field, WA (BFI) was founded in 1930, but its history as an independent operator ended recently when it was acquired by Landmark Aviation — one of the major FBO chains. The independent family-owned FBO may be an endangered species.

Landmark, which came into existence in 2005 following the merger of Garrett Aviation, Piedmont Hawthorne, and Associated Air, has been expanding not only in North America but internationally as part of what it calls the strategic growth of its network. In early April it acquired RSS Jet Centre and its three UK locations — London/Luton (LTN) and Manchester International (MAN) in England, and Prestwick (PIK) in Scotland. All three FBOs will be rebranded as Landmark Aviation facilities.

This latest acquisition brings the number of locations in the Landmark network to 57 (including eight under license). Thirteen of these are in Western Europe.

Million Air started life in 1984 as a luxury business aviation FBO at Dallas/Addison, TX (ADS). Today its network of owned and franchised locations across North America and the Caribbean numbers 28.

Signature Flight Support came into existence in 1992 after the merger of Page AvJet and Butler Aviation. Today it counts more than 100 locations worldwide — including 24 in Europe and 20 in Brazil — making it the world’s largest FBO network. Like Landmark, it is continuing to expand its network.

Harrods Aviation could have been described as a privately-owned FBO until its sale to Qatar Holding in 2010. Harrods’ involvement with the London area FBO business dates to Harrods Holdings’ 1995 acquisition of Hunting Business Aviation. Known as Metro Business Aviation until 2003, it was rebranded as Harrods Aviation in a conscious effort to attract what it considers “the global elite.” Harrods operates FBOs at LTN and STN.

Expectations of safety and efficiency

No mandated standard exists for FBOs anywhere. Government agencies may set minimum standards for commercial aviation activities and make recommendations as to their implementation, but in the end the standards of FBO service and safety are established and maintained by the operator. It is the operator who strives to meet the highest standards possible to serve the needs of pilots, flight crew, and passengers.

In the US, the FBO industry is represented and aided to some extent by the National Air Transportation Association (NATA), as well as by NBAA and AOPA. Meanwhile, in Europe, EBAA is working on a code of practice named International Standards for Business Aircraft Handling (IS-BAH). This is intended to benefit FBOs, handlers, and association members.

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