Airports and FBOs have a roller coaster relationship. When times are good, relations are harmonious. But when times are bad, the partnership goes sour.
But while these relationships can be uncertain at times, Tom Hendricks, president of the National Air Transportation Association (NATA), says they are necessary and stresses that both parties have a hand in nurturing and growing them.
Airport Business recently caught up with Hendricks to ask him a few questions about airport-FBO relationships and he said it’s time for airports and FBOs to put down their swords and work together for the greater good. The reality is that airports need their FBOs as much as their FBOs need them.
In a recent conversation an airport director mentioned that airports need their FBOs as much as their FBOs need them. Can you explain why that is?
There are significant differences between operating an effective airport and running a company that delivers aeronautical services like fuel, aircraft maintenance, customer service and so forth to aircraft owners and operators. FBOs provide the experience and skills needed to provide a cost-effective, high-quality range of aeronautical services. They shield the airport, often a municipality, from direct exposure to market volatility. FBOs have the capability and reach to effectively draw new users to the airport. Thus FBOs provide a long-term business partner seeking to help with the airport’s success.
What sparks some of the problems that occur?
FBOs are privately run, enterprise-driven entities. Airports often look at their FBOs in good times and say, “We want a piece of the action.” Yet, in the bad times, when those same FBOs are struggling to keep their doors open, there’s not much interest in them at all. Running an FBO is a very tough business to be in. It’s very low margin. We’ve been emphasizing that FBOs develop enduring relationships with their airport sponsors to make sure these relationships remain strong. They need to have enduring relationships, so that they may ensure that both organizations, the airport sponsor and the tenant, which is the FBO, are viable entities.
Some airports are taking over their FBOs. Is this a good idea?
Some small airports won’t sustain private enterprise, yet the governing officials have decided to maintain an airport and provide minimal aeronautical services like fuel. Where a private enterprise can survive, a model where you can bring in innovation, long-term capital investment and create jobs is the most viable model. It’s airport dependent. It doesn’t apply to every airport, but we feel if a private enterprise can be sustained on its own, then that’s in the best interests of everyone in the community, not only the airport.
How do airports and FBOs work together to foster an enduring relationship built on respect?
I think it’s similar to the way we advocate here in Washington. We can’t just go and ask for things when we need something. We’ve always got to be communicating very aggressively. We’ve got to attend all the opportunities we have to interact with key industry people.
[By doing this,] over time, all organizations build trust with one another. It’s a heavy lift by both groups, by airports and by the tenants on the airport, to make sure that they’re communicating as often as possible and working through issues that are causing friction in the relationship. The best way to do that is not via email. It’s sitting across the table from a colleague that has the same broad desires as you do.
And you’ve got to stay engaged. An FBO owner can’t just go to the airport authority whenever he or she wants something or is concerned and wants to push back on something he or she has heard through the grapevine. They have got to work at this every day on the job.
How do you get everyone on the same page and moving in the same direction?
All FBOs should be involved in the minimum standards process at airports because that really sets the playing field for private enterprise. We’ve found when we see some of our FBO members struggle with their relationships, it’s because they haven’t been engaged in the airport minimum standards process. It’s in everyone’s best interest to have all the stakeholders at the table when discussing airport minimum standards, whether they’re being modified or adding new ones.
When it comes to long-term capital investment all the stakeholders have got to be at the table for that to be successful. It’s vital that FBOs be part of the process because how these capital improvements or repairs to the airfield are conducted could impact these businesses. It serves them all well to make sure that all views are heard prior to making large decisions like this.
Basically what it all comes down to is just really good open communication and participation among all parties involved. It’s not an us vs. them situation. It’s a we. That’s how I would describe a successful relationship between sponsors and tenants.
Can you think of any airports and FBOs doing an exemplary job of communicating in this way?
Yeah, Castle Aviation does a great job. I’ve spoken at Bakersfield, Calif., and I was very impressed with the proactiveness of both the FBO community and the airport community there. Meacham International Airport in Fort Worth, Texas, is another good example with Jet Aviation and some other FBOs working very well with the airport. I think if the relationship is a part of the legacy of an airport environment, it helps overcome changing personalities because people are expected to cooperate. They’re expected to help each other to be successful. Sometimes, I think things get focused on personalities. By having a long-term view, you’re focusing on the culture rather than the personalities that come and go.