Hot Market, New Players

Haynes: I wouldn’t say it’s naive. They’re using business aircraft more and are asking, what about this industry? Is there something there?

AB: What about reversion clauses — are they something that affect how outside investors look at FBO investments at U.S. airports?

Haynes: They all worry about it, but they get over it. As long as there’s a long-term lease, 15 to 20 years or longer, it’s not a big problem. The question is asked almost every time.

AB: What about the values of FBOs in the market today?

Haynes: No question that the values have been increasing, but so have the businesses. The FBOs are making more money, so the values are going up. Multiples are going up, but there’s a lot of misinformation being spread around about what a particular property was sold for.

AB: Where do the opportunities lie in the FBO market?

Haynes: Where the needs are -- to service all these turbine airplanes that have been built and continue to be built. One of problems the VLJs have is they have no support system.

With maintenance, the investment up front is a challenge; but it’s also an opportunity, because there are a lot of these airplanes. I think that’s why you see Dubai Aerospace being interested in the Garrett part of the business, but not so interested in the FBO part. They’re already there; they have the infrastructure.