Now that the FBO Business Has Stabilized ...

... there’s movement again in the sale and acquisition arena of fixed base operations. This week Signature Flight Support announced the purchase of the Yellowstone Jetcenter, LLC at Bozeman, MT, while in mid-February Houston-based Landmark Aviation completed the buyout of Cincinnati-based Odyssey Aviation and its five U.S. FBO locations. Meanwhile, Atlantic Aviation recently completed the sale of FBOs at Fresno Yosemite and Cleveland Cuyahoga Airports. The Fresno FBO was sold to Denver-based Ross Aviation, which also recently acquired Ronson Aviation, Inc. at the Trenton (NJ) Mercer Airport, bringing its number of locations to 14. Ross Aviation’s business model calls for it to keep the local brand names while marketing nationally under the corporate umbrella. During a recent interview with airport business magazine, Landmark Aviation president and CEO Dan Bucaro agreed that the business of FBOs is improving. “I would say it’s definitely stabilized,” says Bucaro, “we’re seeing improvements in every category. “Clearly, we all went through hell and nobody is going to forget that anytime soon. We’re not going to let our cost structure get out of hand. We’re not going to do things that put us in a position where if there is another slowdown that we have major issues.” Prior to the economic collapse of 2008, the FBO community was awash in buyout transactions, much of it spurred on by the influx of new money into the industry segment. Back then, eyebrows were often raised at the purchase price being paid for some operations. The great expectations of sellers have been tamed, relates Bucaro. “The multiples are more realistic today,” says Bucaro. “It depends on the properties and where they’re at. You’re seeing five to eight times [multiples] happening now; in the heyday, people were paying double-digit multiples. It’s much more realistic.” Bucaro adds that the Landmark strategy is as much about meeting customer needs as it is putting more dots on the location map. He comments, “We need to build out our network to better service our customers. What drives our business is safety and customer service, and part of the customer service issue is having the right locations for our customers.” Actually, it’s quite gratifying to see movement in the FBO segment again. The amazing thing is how many operations survived during the economic turmoil of the past few years. Challenges remain, particularly in light of volatile fuel prices and the plight of many airport sponsors – cities and counties that are faced with their own economic challenges. We’re not back to the heyday times … but it’s also not the early ‘90s when the FBO community seemed to be fading away – prior to the economic injection brought on by the fractionals. But then, they too are redefining their business models as well. Thanks for reading. jfi [For more on the interview with Landmark Aviation’s Dan Bucaro, watch for the upcoming March issue of airport business.]