The concept of fractional ownership, which was launched in 1987 by Columbus, OH-based Executive Jet Aviation when it unveiled NetJets, was only beginning to take root. The technological revolution which fueled startling increases in worker productivity in the U.S. drove a new era of prosperity during the Clinton presidency. With the IT revolution and a booming economy came new players — in technology, real estate, and on Wall Street. In time these new players became users of charter companies and business aviation, and in turn they discovered the business of FBOs.
By the mid-90s the FBO sector was experiencing a turnaround, fueled by new money and new entrants, not only in North America but globally. The fractional and Part 135 charter segments became intertwined, and the FBOs benefitted with increased fuel sales. In time, many FBOs turned away from the historical full-service model and became property managers and line service providers. Where airports required the traditional full array of services — flight training, maintenance, avionics, aircraft sales — the FBOs turned to subtenants. In the business aviation sector today, it is a predominant model.
Meanwhile, the FBO business became an international one. NetJets and other business aviation providers have exported their models around the globe, while foreign owners are today big players in the U.S. market. U.K.-based BBA Aviation is owner of the Signature Flight Support chain and other aviation companies such as Dallas Airmotive and ASIG. Australia-based Macquarie is the owner of the Atlantic Aviation chain.
The IT revolution at airports
For airports, advances in technology in time would bring a change in how they operate. In the late ‘90s I visited two of the leaders in this trend — Brussels and Vancouver. Perhaps the greatest lesson to be learned was that IT brought with it a new ability for an airport to control its facilities, particularly gates. With two decades of airline upheaval brought by deregulation, airports such as Brussels and Vancouver pushed the common use concept in which airlines ‘plugged in’ to the airport’s system, rather than permitting individual airlines to control gates and terminals through long-term leases.
This evolution continues today, as airports in the U.S. move away from long-term commitments to carriers. An emphasis now is on developing more terminal concessions and non-aeronautical revenues, with a primary goal of expanding air service for the communities the airports serve.
At the same time, information technology is having a major impact on customer service, which after 9/11 airports came to recognize had become a primary role they inherited from a changing airline industry. The role of IT has accelerated in recent times with the advent of social media, as airports connect to customers, not only providing information but also promoting opportunities for new revenues just by the new-found ways of “touching” the customer.
Interactive digital signage is rapidly emerging on the horizon, and in short order a new revolution in communicating to customers is in the offing. Combined with social media, a new one-on-one relationship between the airport and the passenger is developing.
For business aviation, IT is having a similar impact. FBOs can track potential customers while in flight; connect to the cockpit through social media and other digital means; and increase sales while enhancing service. The time-worn marketing tool — the binoculars — has quickly become a relic of the past. For this segment of aviation, that fact may best symbolize the changing of the guard.
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