What is the Right Number of FBOs?

Lew Bleiweis

What is the Right Number of FBOs?

Most of us have heard the saying, “If you’ve seen one airport, you’ve seen one airport.” This is such a true statement. Although there are many similarities between airports, factors such as size, runway configuration, aircraft operations, employee population and the nature of traffic (commercial vs. general aviation) make each one unique. So, the right number of fixed base operators may be quite different for each and every airport.

I believe it is not up to an airport to decide what the right number is. That decision should come more from the FBO industry and the market forces that dictate the natural balance between supply and demand. Airports are required by the FAA to be open, without unjust economic discrimination; not to allow or grant aeronautical exclusive rights; and to operate as self-sufficiently as possible. To meet these obligations, an airport should seek many business opportunities to generate revenue. If an airport has vacant land for development, especially aeronautical-use property, it should seek all types of aviation businesses, including FBOs, to add to its revenue base. If an FBO wants to establish a presence on the field, it should have every right to do so, provided that land is available, the airport’s reasonable minimum standards are met and accommodations can be made without unjust discrimination.

Competition is always good for the consumer, but not necessarily for the businesses providing goods and services. Like the airlines, FBOs have also gone through a series of consolidations during recent years. The days of “mom & pop” operations seem to be fading, and the dwindling overall number of FBOs remaining reduces the likelihood of multiple FBOs at many airports. The availability of FBOs at surrounding airports may also impact the number of FBOs at a given airport, but a lack of FBOs doesn’t mean there is not competition located within a reasonable distance. 

Lew Bleiweis

Lew Bleiweis, A.A.E., is executive director of the Greater Asheville Regional Airport Authority in Asheville, NC. He has held various airport management positions from operations to administration throughout his more than 30-year career. Currently, he serves as vice chairman of ACI-NA.  

There are a few key logistics or market factors that can impact whether or not FBOs choose to compete. First, aircraft mix is integral to the number of needed FBOs. Corporate turbine aircraft have the potential to generate more revenue for an FBO than small single-engine piston aircraft. However, large flight training facilities that use piston aircraft may be equally important for revenue. Over the years, I’ve been told that the volume of fuel sold has a direct correlation to the number of FBOs on an airport. A reasonable size airport with a good mix of piston and turbine aircraft should sell a minimum of 1 million to 2 million gallons of fuel annually. Obviously, the economies of scale play an important part in profitability. 

Second, the number of based aircraft vs. itinerant aircraft may also be a deciding factor for the proper number of FBOs. More based aircraft usually corresponds to more T-hangars or box hangars. The availability of capital may make it difficult for a single FBO to keep up with hangar demand. With today’s construction costs, rent for an average new T-hangar can be in the $600 range, which may limit tenancy.

Finally, airfield layout will impact an airport’s FBO population. Aircraft operators should not have to taxi long distances, cross runways or travel through commercial airline areas to reach an FBO. Conversely, an FBO should be able to reach aircraft customers in a relatively convenient and timely fashion.

As mentioned above, an airport’s role in setting minimum standards may determine how an FBO operates. Minimum standards should be set at a level that allows new entrants to compete with incumbents.  

So, what is the right number of FBOs for a given airport? Ultimately, it comes down to whether all the FBOs on the airport can make a profit and provide high levels of service, while attaining high levels of customer satisfaction at a reasonable cost. 




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