Doing it Right: Public Sector FBOs

April 15, 2021

In the years following Charles Lindbergh’s solo crossing of the Atlantic in 1927, he embarked on a promotional campaign across the United States, generating public interest and enthusiasm for a then-nascent aviation industry. One of the lesser-known aspects of his promotional campaign was trolling public officials he would inevitably meet upon landing at the various airports he visited across the country, by asking them incredulously “So, this is your airport?”

The implication was clear: Lindbergh was using his star power to shame public officials, good-naturedly, to invest in their airport. At the time, many airports were not much more than a farmer’s field requisitioned to serve as the local airport and may have featured a windsock, or perhaps a hangar.

Today, there are literally thousands of airports dotting the US landscape. The majority of them trace their construction to World War II, only to be transferred to civilian hands after the war. While a few hundred or so became the large commercial service airports we know today, hundreds more became reliever airports and smaller, general aviation airports. Common to many of them was the need to provide the flying public aviation services, including fuel and “line services,” an increasingly aging phrase for the host of ancillary ground support services FBOs provide. And here is where FBO history diverges.

While the majority of business and general aviation traffic may be found among the 250 or so airports nearby major business centers, there are another 2,000 airports or more offering FBO services – defined in this case as minimally providing Jet A refueling. Incredibly, 88 percent of these airports have only one FBO, based on a 2017 study of a publically available flight planning database. Why?

An outsized number of FBOs are operated by an airport sponsor itself, be it a city, county, or municipality – because the private sector either tried and failed – or expressed no interest in the first place. Often, vestiges of a local aviation family’s former FBO business are all too common at many of these airports – a faded logo on an airport sign, or a vintage fuel truck parked in the grass. Either way, the result was the same: Essential FBO services are provided by the airport. What isn’t the same is the relative success of these airport run FBOs, varrying considerably. While there is no one trick to ensure success of an airport run FBO, common themes emerge when one digs deeper.

Trent Moyers, Airport Director of Pangborn Memorial Airport (KEAT) in East Wenatchee, WA knows this narrative well. After the local FBO Wings of Wenatchee closed its doors in 2011, Pangborn Memorial Airport was left with creating the roadmap for an airport-run FBO.

“If you want the FBO to be a profit center, every effort should be made to maximize its potential. Make the capital investments that will make a difference. Give your staff the tools they need to operate safely, efficiently, and successfully. Avoid the mindset of operating the FBO because you ‘have to,’ operate it like a business intent on turning a profit,” Moyers said.

Matt Nebgen, Director of Gateway Aviation Services at Phoenix-Mesa Gateway Airport (KIWA) agrees with Moyers’ mindset. “Always adopt a mentality to compete in the open market. Find ways to adapt the inherent government way of doing things,” Nebgen said. While Phoenix-Mesa Gateway Airport is a larger air carrier airport with several air carriers, Gateway Aviation Services, the airport-operated FBO, provides all FBO and line services on airport: no small task considering the airport’s size and complexity. The private-sector mentality that Nebgen brings to Gateway Aviation Service’s shows in their marketing efforts. In addition to the FBO’s separate branding — a common theme among well-run public sector FBOs — Nebgen notes participation in industry events is crucial. Says Nebgen, “While we have always participated in industry events such as NBAA BACE and S&D, in the past few years we’ve expanded our participation to include industry events focused on military flight operations.” That outreach to the military community is immediately evident when one visits Gateway Aviation Services, as honors and recognition plaques from the various squadrons that now regularly use the airport adorn the walls of the FBO.

Southwest Wyoming Regional Airport (KRKS) in Rock Springs, Wyoming has operated its FBO for decades, but it wasn’t until 2015 when a new approach yielded the right results. Airport Director Devon Brubaker said, “For the first 70 years of our FBO’s existence, it merely served as a gas station for anyone needing fuel when they stopped in Rock Springs. There was no marketing, very poor customer service, outdated and unsafe equipment, rundown facilities, and no vision for the future. Despite this, the FBO resulted in 90 percent of the airport’s revenue.”

The airport concluded the greater impact mathematically was for the airport concentrate on the FBO and grow that 90 percent share the of revenue by 10 percent, rather than try to grow the remaining 10 percent of the airport’s revenue by 10 percent. “Starting with our customer service and equipment issues that plagued the operation, our course correction immediately showed results with significant growth in fuel sales and ancillary revenues. As the culture shifted amongst the staff, the airport board moved forward with plans to replace the 90-year-old hangar and 70-year-old terminal with a state-of-the-art terminal and hangar facility that could support the industry’s largest corporate jets,” Brubaker continued. “We worked with the FAA, WYDOT, and the Wyoming Business Council to secure funding to cover all but $30,000 of the $5.68 million cost of the project. Prior to starting construction in 2017, the Airport Board decided to brand the FBO separately from the airport. With plans to eventually change the airport name, completed in 2018, it was important locally to keep the name of the County somewhere in the branding, hence Sweetwater Aviation brand was created for our FBO.”

Similar to Nebgen’s feedback regarding industry involvement, Brubaker began a robust marketing push of the newly branded Sweetwater Aviation FBO through industry conference attendance and online marketing efforts to begin attracting new clients. Three years after opening, and even in the midst of the pandemic, Brubaker noted the airport’s finances have been more stable due to the continued growth of the FBO business. “This growth has caused us to invest further in additional new equipment, expanded marketing efforts, a new website, and a new robust FBO safety program,” he added.

Returning to East Wenatchee, Pangborn Memorial Airport also doubled down on their FBO capital improvement efforts under his leadership, adding “… a new 100LL self-serve system, aircraft de-icing equipment, and acquiring a 64,000 square foot hangar/office facility from which we operate our FBO.” While capital improvements have yielded the desired result, subtle pricing and staffing changes – both easily justified following such capital improvements have added to that success. “We recently adopted fuel pricing policies to be more competitive in the region, and now have full-time FBO employees whose duties are almost exclusively focused on the FBO, instead of having cross-utilization responsibilities with operations and maintenance personnel.”

As Brubaker alluded, there was a time when an airport-run FBO meant customers might experience poor customer service, outdated and unsafe equipment, and rundown facilities. Today however, a great many public sector FBOs are nearly indistinguishable for their private sector brethren - by design. While there is no magic bullet for airports considering what to do with their FBO, the proper mindset and a forward-thinking airport manager can make all the difference. Brubaker epitomizes both, adding “Aviation is often so focused on commercial service, due to its prominence in communities and in the news, but for smaller airports it does not pay the bills. Strategic, targeted investments in facilities, equipment, safety and culture can elevate a municipally run FBO to the same or better status of a global brand.”

Douglas Wilson is the president and founder of FBO Partners, LLC, an aviation consultancy providing business management advisory services to Fixed Base Operators (FBOs). Wilson can be reached at [email protected]