An Industry Looks Ahead

In Atlanta, chains express ‘guarded optimism’; the aftermarket gains strength; the role of international grows

“FBOs have done a horrific job in communicating to our users two things. We have not done a good job explaining what our role is, and it’s not just dispensing fuel. I also think that FBOs have done a terrible job of explaining what is in the price of that fuel. We’re bundled services.”

Regarding FBO consolidation and the fallout of the acquisition frenzy of the recent past Woolsey states, “There was a feeding frenzy on FBOs for awhile; I think it’s gotten back to the basics.

“I found it difficult to pay some of those high prices to grow, because I knew the only way I could get that back was to charge more for the fuel. So, we sort of got left out of the massive growth. We didn’t double the size of our chain like some of my competitors did.

“We feel very good today. We didn’t overpay for businesses. We’re in the locations that our customers appreciate. I think it’s put us in a sustainable position.

“It’s Million Air’s intent to continue to grow. Last year we opened three properties. We grew steady; a little more conservative, which is how we’ll grow in the future.

A global bizav update
In Brazil, the business aviation market is growing very fast and a large number of ultra long-range jets are being sold in the country, comments Francisco Lyra, president and CEO of the Brazilian Association of General Aviation (ABAG).

From a regulatory standpoint, Lyra reports that Brazil is working on a new code of aeronautics, and ABAG has been working with the government with regard to overflight permission for foreign jets. “As you may know, Brazil is one of the few countries in the world that still requires an overflight permit,” says Lyra.

The other major issue which Brazil is facing is infrastructure, he explains. “We have had a policy of universalizing access to commercial air travel, so the number of flying travelers is growing incredibly,” says Lyra. Last year, Brazil experienced a 27 percent growth in the air travel industry, and that is putting a lot of pressure on infrastructure and is driving general aviation out of the major controlled airports, he relates.

Canadian Business Aviation Association (CBAA) president and CEO Sam Barone says despite the economic downturn, Canada remains in a very stable situation economically forecasting 2.5 to 3 percent in GDP growth this year.

“This is translated into the business aviation area in terms of an all-time high issuance of private operator certificates this year, which is largely being driven by the banking, mining, and resource sectors,” explains Barone.

He says the association is currently looking at FBO security issues as well as large airport access issues, stating, “Because we share a border with the U.S., we have to manage two major borders in terms of customs facilitation and security, and we diligently work with NBAA to make sure we mitigate these issues on behalf of our members.”

Brian Humphries, president and CEO of the European Business Aviation Association (EBAA), says business aviation in Europe is one of the fastest growing sectors after the low-cost carriers, and also the fastest falling, coming down some 15 percent in 2009. From 2001 to the present, the number of business aircraft has doubled from 2,000 to some 4,000, he relates.

“The downturn in 2009 for us was the worst of any sector in Europe; 2010 is looking better — for four months now, we’ve shown 6 percent growth compared with the months of the previous year,” comments Humphries.

“We are seeing sustained growth. Prices have been pretty tough for people selling, pretty good for people buying — if you have the money.

“In Europe, charter is a big part of the market [some 80 percent of EBAA members are public transport operators and 20 percent corporate]; they’re telling us that activity levels are up but the money is down.”

Chuck Woods, chairman for the Asian Business Aviation Association (AsBAA), relates that the association is still a very small and young association, yet the region it represents is defined by 15 countries.

“On a market basis, led by China, there have been some pretty interesting orders — large cabin product orders; Hong Kong right now is the region’s leader in installed units,” says Woods. “A little farther south in Malaysia and Indonesia are some very strong growing pockets of business aviation.”

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