FBO Survey: 2022 The Americas

With the world still feeling its way out of the COVID pandemic, the aviation industry has seen many changes over the past year. While commercial airline traffic has yet to return to its pre-COVID volume, business aviation has not only experienced a strong rebound but has exceeded 2019 levels. The industry has set records for private aircraft usage in the process as scores of new customers seeking to avoid diminished commercial flight schedules and exposure to crowded airport terminals have entered the market.

In response, sales of both new and preowned aircraft have soared. Airframer book-to-bill ratios are healthy with backlogs extending out for years as they cautiously ramp up production, and the preowned aircraft market has been under pressure. “Asset Insight’s tracked fleet posted a record-low inventory figure in January, at 3.5 percent,” explained Tony Kioussis, president and CEO of the aircraft valuation company. “Since the June 2020 peak, inventory has now decreased for 19 consecutive months.” Some private lift providers have needed to pause sales of jet cards and fractional shares to ensure their supply can meet demand. 

All this has translated into more business at FBOs as the staffing furloughs seen at the peak of the pandemic have faded into the past. In Aviation Business Strategies Group’s (ABSG) annual FBO Fuel Sales Survey, 72 percent of the respondents indicated that they experienced increased fuel sales last year. “After the COVID-induced recession of 2020, there appears to be a very rapid recovery in fuel sales for most FBOs responding to our survey,” said ABSG co-principal and FBO industry veteran John Enticknap. “In fact, many FBOs are reporting fuel sales equal to, if not greater than, pre-pandemic levels recorded in 2019.” That optimism is expected to remain as 64 percent of ABSG’s survey respondents anticipate increased fuel sales again this year.

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While corporate travel is slowly ramping back up, it is the leisure and private-owner activity that has led to a resurgence of private aviation and that segment is seeing some behavioral changes in the post-Covid environment. “We’re finding that in the densely populated areas that have always been your traditional business and commerce centers, we have started to see by no means a mass exodus but a slippage if you will, to people turning their vacation homes into their primary residences as a function of telecommuting,” explained Douglas Wilson, president and senior partner of industry consultancy FBO Partners. “I think we are seeing certain markets that historically had more seasonality are growing faster than our traditional business and general aviation markets, the Teterboros and Morristowns of the world.”

That change is fueling an infrastructure boom as locations rush to provide services to meet their new influx of clients. Analysts are attempting to determine where future aircraft will be based and if those trends will lead to new destinations among the top business aviation markets.

Consolidation and Private Equity

Last year, more than 250 FBOs changed hands, a record number that was inflated by the sales of the industry’s two largest FBO chains, Signature Flight Support, and Atlantic Aviation. Signature’s parent company Signature Aviation was sold in June to a consortium of private equity firms that included Blackstone, Global Infrastructure Partners, and Cascade Investments. While KKR, which acquired Atlantic from long-time owner Macquarie Infrastructure Investments, followed three months later with the addition of Ross Aviation’s 19 locations and Lynx FBO’s nine.

“What it means is private equity firms in particular that were interested in getting into the industry are now fully engaged,” Wilson told BJT sister publication AIN. “All of a sudden there is a renewed search for inventory in the form of FBO acquisitions, and there is simply less and less inventory.” He likened the current FBO market to a shrinking pond with fewer and fewer fish but with more and more fishermen casting their lines into the water.

Another factor weighing upon FBOs is the labor market. As locations scramble to fill their staff needs, worker salaries have risen as a result of intense competition. While it had not been unusual for chains to relocate general managers to different bases, some companies are now finding the need to offer relocation bonuses to qualified line staff. With margins on fuel sales already tight, the industry will eventually have to reckon with higher FBO prices to account for these costs. As well, ABSG’s survey pointed to FBO industry concerns over hikes in oil prices due to inflation and international conflict.

Against this backdrop, AIN once again asked its readers to rate the locations they frequented over the year in five categories: line service, passenger amenities, pilot amenities, facilities, and customer service representatives. While some FBOs may shine in one or two categories, to land at the top of the survey ratings a location must exhibit all-around excellence. We present to you this year’s top 5 percent.

FBO SURVEY 2021 The Americas (1.7MB)