Though numbers of Fixed Base Operations (FBOs) in business today vary from year to year, it is a commonly held belief in the industry there are approximately 3,000 FBOs in the United States. While still a close approximation, the devil of course is in the details. To correctly identify the number of FBOs, one must define what an FBO actually is today.
For decades following the passage of the Air Commerce Act in 1926, an FBO was often a full service business out of necessity, as opposed to Minimum Standards. FBOs offered a host of complementary services, such as aircraft refueling and line services, storage, maintenance, charter, sales and flight training. Today, through a variety of now well-documented market forces and consolidation, many FBOs offer a more limited menu of services, such as aircraft refueling and line services, and aircraft storage. Using that latter definition and using a publically available flight planning database, there are some 2,527 FBOs selling Jet fuel in the United States, spread out over 2,191 airports as of September of 2017.
Despite what one industry group may think, FBOs are for profit enterprises. They pay significant leasehold fees, flowage fees and concession fees to operate at airports across the country. In turn, they charge their customers for goods and services. While it doesn’t take a Keynesian economist to understand the transactional relationship between business and consumer, it does take the modern day equivalent of a cash register- a Point of Sale (POS) System- to collect payment from those customers. And that is where the relatively small number of FBOs selling Jet fuel comes into play.
By contrast to the 2,527 FBOs selling Jet fuel in the U.S. today, there were approximately 168,000 gas stations the U.S. as of 2004, according to a study from National Petroleum News. A review of one fast food restaurant chain finds there were some 14,146 McDonalds in the U.S. alone as of 2016. Hence, when examining a market opportunity to provide a customized POS solution to the FBO industry, most information technology companies have correctly concluded the market size of the FBO industry is not one worthy of significant investment.
Still, a few companies vie for a sliver of a very small pie. Widely regarded as the FBO POS software industry leader, Total FBO was released in 1987 and through growth and subsequent acquisition by World Fuel Services in 2011, maintains a significant market share today. By 2014, AvPOS, a product of under the Total Aviation Software umbrella, reached 750 installations- worldwide. Today, Total FBO competes with a handful of competitors, some new and some old, including X1FBO, Corridor Aviation Service Software, plus a smattering of still smaller POS offerings, such as PRG Aviation. To be sure, many more FBO POS competitors have entered the market over the past several years, and many have been relegated to history already- their lifespans a mere flash in the pan.
The results of such a fractured market are somewhat predictable according to Chris Salley, sales and marketing manager for Ft. Lauderdale-based National Jets. Notes Salley, “I find that the business aviation industry has long found itself turning to proprietary software to accomplish our very specific tasks. Time after time, the [POS] software or even scheduling software for flight departments become unsupported five to 10 years later. The owning company may not find profit in the software they’ve made, or the software developers have lost interest in building the system to keep it current- leaving the business owner stuck with a system that no longer grows with their business.”
Against this backdrop, full service, independent FBO National Jets undertook an eight-month study of the field of POS Systems available to FBOs, ultimately making the bold step to become the launch customer for X1FBO in December of 2016. According to Gmstek, LLC, which brought X1FBO to market, X1FBO is a “…cloud-based, mobile and desktop-enabled management and payment processing system focused on Fixed Based Operators and designed for all of general aviation.” A slick user interface (UI) makes it one of the more friendly POS systems in use by FBOs, and as Salley notes, X1FBO has demonstrated itself to be one of “the most forward-thinking in the industry.”
As most information technology professionals will allow however, there are always teething issues with integration of a new software platform to a business. Due to software industry restrictions specifically around payment processing, World Fuel Services and Multi-Service Aviation have still not certified X1FBO to directly handle transactions. As a result, certain card types and contract fuel transactions are processed outside of X1FBO, which can create duplicative efforts for an FBO. For example, though partially certified to handle Avfuel transactions, some FBOs that have implemented X1FBO must still use TotalFBO to run all World Fuel Services/Colt Contract Fuel and EPIC Contract Fuel transactions. And though now integrated into X1FBO, others must use Shell/Eastern Aviation Fuels for payment processing of AVCARD and US Government Air Card transactions.
Given the diverse nature of FBOs however, the use of multiple POS systems is surprisingly common. For example, an FBO whose core concentration is their Part 145 Repair Station may use Corridor Aviation Systems which is a more maintenance specific system, yet use a completely different system for its Line Service Department. Similarly, National Jets also still uses TotalFBO- or TFBO in industry parlance- as its accounting software backbone to manage its FBO, Part 135 Aircraft Charter division and Part 145 Repair Station.
Ashley Folk, customer service manager for Seattle-based FBO Kenmore Aero Services finds Total FBO, or simply TFBO in industry parlance, exceptional. Says Folk, “TFBO is truly an all in one system. It offers a scheduling screen –known as Concierge- which directly drives invoicing. The data input into the Concierge screen also transfers to a Concierge Situation Display, commonly referred to as a traffic board. This is live data that can be displayed anywhere, yet most beneficial to the FBO line office as it displays daily traffic information, services requested and any special notes.”
Additional features helpful to an FBO are available through TFBO. Included in the reporting suite is the tracking of fuel meters from an FBO’s mobile refueler fleet through a fuel meter justification report. TFBO stores all meter movements through this report, allowing a user to quickly determine if a fuel ticket- the record of an aircraft fueling- may have not made it from the line service department to the front desk or accounting back office. A host of other tools in TFBO all developed over its long history in the industry include a timekeeping function, as well as simplification of recurring billings such as monthly hangar or tie down charges.
To say the marketplace of Point of Sale System offerings to serve the specialized and small universe of FBOs is limited is an understatement. Early adopters of now-mature systems such as TFBO find comfort in the familiarity, while those exploring the cutting edge of POS systems coupled to Customer Relationship Management (CRM) platforms are sometimes left yearning for something that doesn’t quite yet exist.
Still other FBOs operate multiple redundant systems simply to handle the multiple forms of payment presented by an FBO customer. Bold moves by early adopters notwithstanding, the FBO industry patiently awaits a better Point of Sale mousetrap to be built.
-Doug Wilson
