As the Service Sector Meets in Dallas ...

... it becomes apparent that the economy is hitting home. Several thousand fixed base operators, other tenant operations, and aviation technicians converged this week on the Dallas convention center for the annual Aviation Industry Expo, the NATA FBO Leadership Conference, and the introduction of the AMT Society aviation technicians group meeting. Economically speaking, the industry segment is on pause, mentally. A few observations ... -- The industry-changing consolidation that has occurred among FBOs is expected to slow. -- To paraphrase one industry resource: The economy is in a recession – get over it; tighten up; think creatively. It is change, and change represents opportunity. -- Corporates are shopping. They want price (price – in this market?) What a few FBOs have discovered in this discussion is that when the corporate operator is calling for price, the call may need to be directed upstairs. What type of aircraft? The mission? The service need? While a lot of FBOs have top-notch customer service reps to receive such requests, some newcomers at the front desk might be hesitant. The point is, they’re looking for a deal, they’re under pressure. An economic downturn brings with it new pressures, new demands, and new ways of conducting business. The FBO that is creative has a chance of making a profit, while accommodating a corporate customer. -- If we are indeed in a recession, it has to do more with the weakness of the dollar than anything else. Investing in U.S. interests is not attractive globally at the moment. -- Fuel remains volatile, and the reason the price continues to be so high is the weakness of the U.S. dollar. Jet-A sales have been dropping off for many since the first of the year ... avgas remains sluggish. Overall, FBOs are optimistic. This is a different industry since the last significant economic downturn. The aircraft manufacturers have backlogs up to five years and the corporate world has become imbedded in the bizav arena. The age of the Internet did not eliminate the need for business travel – in fact, it is tying the business world more closely together and creating a need for more face-to-face meetings. The greatest concern may be the presidential politics discussion. Price controls; windfall profits taxes; putting up trade barriers – these are all becoming part of the discussion. Why anyone would want to return to the economic model of the 1970s is beyond many, but it may be happening. That would not be a good thing for general aviation. Thanks for reading. jfi