AIN Special Reports

FBO Survey Report: 2021 The Americas

 - April 1, 2021, 8:00 AM

For most, 2020 cannot fade into a memory fast enough. The tendrils of the Covid pandemic reached virtually every person and every business in every country in the world, but some industries such as travel were especially constricted by an ever-changing mosaic of government restrictions intended to combat the virus’s spread.

While private aviation fared better than its commercial carrier brethren, it still has yet to rebound to pre-Covid levels in most locations. A year ago, global business aviation usage declined by more than 65 percent compared to April 2019, according to industry data provider JetNet. For North America, it was off by 68 percent year-over-year. Yet in contrast to the airlines, business aviation activity has steadily increased and in December, spurred by a surge in charter activity as passengers faced reduced commercial availability and concerns over flying with large groups, it climbed back to within 3 percent worldwide and 5 percent in North America. For 2020, worldwide private aviation finished nearly 18 percent off the pace set the previous year, an impact that was felt by the FBO industry.

In its annual FBO Fuel Sales Survey, Aviation Business Strategies Group (ABSG) noted 67 percent of FBO respondents reported a year-over-year decrease in fuel sales from 2019 and that the top concern was the effects of the pandemic on the economy, transient aircraft traffic, and keeping their service teams intact.

“Putting 2020 in context, the last time FBOs suffered through similar declines was during the Great Recession [2008-2010] when it took about six years to recover back to where we were at the 2007 peak,” said Mark Chambers, managing partner for industry consultant Aviation Resource Group International (ARGI).

Though corporate travel has remained far below normal levels, charter and fractional shares have picked up the slack, with many new customers entering the private aviation arena for the first time. “The industry saw another new tranche of customers enter the private aviation market from the front of the [Part ]121 cabin, who had likely been on-the-fence prior to Covid,” said Douglas Wilson, president and senior partner of FBO Partners. “The value proposition changed for them when Covid struck as the cost differential was immediately justified to gain a greater locus of control over their health.”

Among the FBOs that AIN spoke with this year as part of its annual survey report, most indicated that traffic ramped up in the second half of 2020 and has stayed strong through the beginning of this year.

Given those parameters, the needle has swung to it being a seller’s market for FBO owners, unlike the aftermath of the 2008 financial meltdown. “The current recovery from 2020 looks different in our industry since the benefits of private travel are being spotlighted and shifting more passengers from airline terminals to FBOs,” Chambers told AIN. “This has heightened the interest on the buy side.”

“What’s truly changed on the [mergers and acquisitions] side is that the resiliency of business aviation to exogenous threats like Covid have demonstrated that FBOs behave more like infrastructure from an investment perspective, bringing a new class of investors,” explained Wilson. “It’s no longer just mid-market private equity driving change, infrastructure firms are getting in too.” Indeed, currently at play are the two biggest names in the industry: Signature Flight Support and Atlantic Aviation. Efforts to acquire Signature—the world’s largest FBO chain—sparked a bidding war, which as of press time has attracted a $4.7 billion offer, while Macquarie Infrastructure Corp. (MIC) which owns Atlantic, has resumed its Covid-­interrupted efforts to sell the company, with approximately 70 U.S. locations.

In addition to affecting traffic levels, the pandemic required FBO operators to respond in other ways. Gone went bowls of candy and bountiful refreshment bars, replaced in many locations by pre-­packaged, single-portion snacks. Plastic screens went up at CSR counters, while seating areas in lobbies and lounges were reconfigured to promote social distancing. Staff were required to wear masks while customers, if not mandated by state rules, were encouraged to do so. Some FBOs instituted temperature check protocols for each staffer as they began their shift. New cleaning regimens were adopted as NATA introduced its Safety 1st Clean: a voluntary, self-certifying program built around best practices as recommended by the U.S. Centers for Disease Control and Prevention, all in an attempt to protect their staff and reassure their customers.

Against this backdrop, AIN once again asked its readers to rate the FBOs they visited in five categories: Line Service, Passenger Amenities, Pilot Amenities, Facilities, and CSRs. It is not enough to specialize in just one or two categories, as some locations that earned the highest overall score in a category did not place in the top 10 percent of FBOs in this year’s survey. To reach the top rungs, a location must excel in all five categories.

Download the Report

Read the Report

FBO SURVEY 2021 The Americas (1.7MB)

Viewing this report requires Adobe Reader be installed on your device. If it's not currently installed, click here to download.

Get Adobe Reader