Reconsidering How FBOs Operate

Changes in the fixed base operator sector may warrant a change in the typical business model. For years, the FBO industry has generally adopted the same model: heavy discounts or giveaways in exchange for the revenues that come with the accompanying...

A step at a time
While this model will probably be a long time coming, and will not work at every FBO, some changes are necessary if the industry is to remain financially stable.

Most FBO owners are going to have to take baby steps in the implementation of any changes, while other smaller FBOs will probably have to take a “wait and see” approach relative to the acceptance of a modification in the traditional FBO business model.

Obviously, any proposed changes like those discussed face the daunting challenge of dealing with a significant recreational pilot population. This segment of the market will always challenge any changes in the status quo, and has no problem with the dreaded “double whammy”, as long as it isn’t coming out of their pocket.

If we are not careful, the FBO industry could end up like the legacy airlines. We all know how well things have worked out for them and their business model.

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Michael A. Hodges, MAI is president and CEO of Airport Business Solutions, a Tampa-based aviation valuation and consulting company. During the past 20 years he has assisted FBOs with a variety of lease, operational, marketing, and valuation issues. He is also managing director of ABS Aviation Management Services, a sister company that provides contract FBO management services.

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