Back in a Buying Mood

In February, Houston-based Landmark Aviation announced the acquisition of the Odyssey Aviation chain of five fixed base operations — at Cincinnati; Chicago; Asheville, NC; Charleston; Lafayette, LA; and New Orleans. The move followed the December buyout...


In February, Houston-based Landmark Aviation announced the acquisition of the Odyssey Aviation chain of five fixed base operations — at Cincinnati; Chicago; Asheville, NC; Charleston; Lafayette, LA; and New Orleans. The move followed the December buyout of DB Aviation at Waukegan, north of Chicago. Landmark, now with 47 locations in the U.S., Canada, and Europe, is back on the FBO buying circuit, explains president and CEO Dan Bucaro.

Recently, airport business interviewed Bucaro to discuss the state of the FBO business and Landmark Aviation’s role in the marketplace. Following are edited excerpts ...

airport business: How would you characterize the FBO business today, following what some would call the hell of the past two years?

Bucaro: Yeah, it was hell, wasn’t it? I would say it has definitely stabilized; we’re seeing improvements in every category. For us that means our FBO business; our charter management business; and our MRO [maintenance/repair/overhaul] business are all performing better than last year at this time. Those are encouraging things. Clearly, they’re not back to 2007 levels. But it’s certainly an improvement from where we were coming from.

ab: Is there any particular segment that appears stronger than the others?

Bucaro: The MRO side is probably the laggard, at least for us. But you have to remember it’s not our major business.

ab: Would you agree that it is a changed industry today?

Bucaro: I think we’re just cautious; the industry is cautious about getting ahead of itself. Clearly, we all went through hell and nobody is going to forget that anytime soon. We’re not going to let our cost structure get out of hand. We’re not going to do things that put us in a position where if there is another slowdown, we have major issues. I think we’re optimistic about 2011-12, but not overly optimistic. It’s a realistic view that things are going to continue to get better, and they’re going to slowly get better.

ab: I’ve heard many FBOs say that the downturn of 2008 forced them to rethink their businesses. Is that true of Landmark?

Bucaro: It forced you to really look internally at what you’re doing. We were pretty disciplined and, frankly, ahead of the game of cutting costs; I think we were ahead of the game of ‘stop buying’. But at the same time, I don’t think anybody could have really believed that it was going to be a 25-30 percent hit to volumes. It forced everbody to stop looking at the outside for opportunities, chasing everything in the world. You just looked internally to see what you had to do to survive. That’s what we had to do. We did it; it wasn’t pleasant.

ab: It appears that the acquisition of DB Aviation was a signal that Landmark is back in the ‘buy FBOs’ arena.

Bucaro: We really liked Waukegan and DB; it has all three components of our business. It’s a really good fit and gives us a presence in the Chicagoland market, which is really important. We felt like it was a great transaction at this time.

ab: Can you disclose the cost of the acquisition?

Bucaro: Even if I wanted to, I can’t; every one of our agreements has a clause that says we can’t discuss the financials. It’s one of the things about being a private company.

ab: But it would seem you can discuss the buying/selling environment around FBOs today, right?

Bucaro: The multiples [times earnings] are more realistic today; it depends on the properties and where they’re at. You’re seeing five to eight times [multiples] happening now; in the heyday, people were paying double-digit multiples. It’s much more realistic. I will say, though, that not everybody is realistic. There are still people out there thinking it’s 2007, but I don’t see them getting bought.

ab: Which leads to the question, What are operators asking in terms of purchase price?

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