February 7, 2017, NBAA Schedulers & Dispatchers Conference, Ft. Worth, TX — While FBO fuel sales for 2016 showed mixed results, the majority responding to Aviation Business Strategies Group (ABSG) Annual FBO Fuel Sales Survey indicated a marked increase in confidence in the economy for 2017 along with a prediction of healthy fuel sales.
According to ABSG Principals, John Enticknap and Ron Jackson, one-third of the responding FBOs in the U.S. reported a decrease in fuel sales for 2016 while 47% recorded increases from 1% to more than 8% compared to 2015.
"2016 was truly a mixed bag for FBO fuel sales," said Enticknap. "It was bittersweet for the industry as more than 30% of the FBOs surveyed showed a decline yet the very top performers, nearly 20%, reported an increase in fuel sales of more than 8%."
Enticknap said that there were external factors that affected the industry in 2016. "First of all, recovery in the number of hours flown by the business aviation aircraft fleet is slow to come, although 2016 showed incremental improvement from month-to-month compared to 2015. Moving forward, we need to see a more positive and robust consistency in this metric", Enticknap explained. "Secondly, many believe the prolonged presidential election cycle caused uncertainty in the economy."
According to Jackson, the survey revealed a bright side for the industry as 93% of respondents predicted they would post at least the same fuel sales in 2017 or have increases ranging from 1% to more than 8%.
"In addition, when asked if the economy was headed in the right direction, a resounding 54% said 'yes' compared to just 8% responding with 'no' while 38% were undecided. This is a very bullish outlook going forward," Jackson said. "By comparison, in last year's survey, only 27% said the economy was headed in the right direction."
In the comment section of the survey, many respondents had good insights on the industry and several pointed to the election of a new president with a pro-business agenda as having a positive effect of the FBO industry
A few of the comments follow:
"While I think the economy has been improving, it's been very slow/ I have high hopes the new administration will accelerate the pace as well as have a positive impact on aviation." - Anonymous
"Until we get a better economy, fuel sales will remain flat. When the freight aircraft are back flying, it means the economy is immediately doing better." - Anonymous
"I think our chances for improvement have been greatly enhanced by the election results." - Anonymous
"They economy will take time to recover. So will our business." - Anonymous
Industry ForecastBased on the their Annual FBO Fuel Sales Survey and interviews with FBO owners and aircraft operators, Enticknap and Jackson have put together the following forecast for the FBO industry in 2017:
· Confidence in the economy by Fortune 500 aircraft operators will increase throughout the year resulting in a gradual buildup of business aviation flight hours.
· Look for aircraft flight activity to increase steadily at 2.5% to 4% monthly heading into the 3rd and 4th quarters.
· As flight hour activity rises, the MRO part of the industry will see an increase in both repair and refurbishment as well as avionic upgrades.
· Aviation fuel costs will follow the price of oil, as in the past, and should level out as oil stabilizes between $55 to $60 per barrel.
· FBO operators will seek to differentiate through delivering a consistent customer service experience.
· The industry will embrace stronger safety programs and will adopt better risk management controls though initiatives such as SMS and IS-BAH.
About Aviation Business Strategies Group
Aviation Business Strategies Group (ABSG) was founded in 2006 by aviation fueling and FBO services veteran John Enticknap and aviation marketing practitioner Ron Jackson. Through a series of seminars, workshops, webinars and personal business coaching, the team at ABSG has helped FBOs solve practical problems and create winning solutions. ABSG also offers an integrated customer service training program called Don’t Forget the Cheese!© and a companion FBO employee team building program titled, Soar With the Eagles, Fly with the Geese©. In 2008, Enticknap and Jackson began teaming with the National Air Transportation Association (NATA) to teach the acclaimed FBO Success Seminar Series and facilitate the new NATA Certified CSR Program. Their industry book, FBO Survival, Ten Tips to Keep Your Operation Lean, Mean and Profitable, is available through Amazon.com. Ph: 404-867-5518 www.ABSGgroup.com
