National Academies Press: OpenBook

Landscape of the FBO Industry in 2022 (2023)

Chapter: Chapter 1 - Introduction

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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2023. Landscape of the FBO Industry in 2022. Washington, DC: The National Academies Press. doi: 10.17226/27295.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2023. Landscape of the FBO Industry in 2022. Washington, DC: The National Academies Press. doi: 10.17226/27295.
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Page 6
Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2023. Landscape of the FBO Industry in 2022. Washington, DC: The National Academies Press. doi: 10.17226/27295.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2023. Landscape of the FBO Industry in 2022. Washington, DC: The National Academies Press. doi: 10.17226/27295.
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4 The term “fixed-base operator,” or FBO, is defined by the FAA as “a business granted the right by the airport sponsor to operate on an airport and provide aeronautical services” (FAA, 2009). The most basic FBO offers its customers self-service fueling. More typically, an FBO offers a set of core services, such as a pilot and passenger terminal, fuel supplies, use of hangars, ground ser- vices, and sometimes aircraft maintenance. The services offered vary because FBOs may cater to small general aviation aircraft, business aviation, commercial airlines, cargo operators, military flights, medical airlift, and often a combination of clientele. In 2020, TRB published ACRP Synthesis 108, which was a comprehensive attempt to orga- nize and study the U.S. FBO industry—its ownership patterns, prevalence at U.S. airports, and services offered. ACRP Synthesis 108 was an analytic effort based on three datasets: the FAA’s database of 5010-1, Airport Master Records; the National Plan of Integrated Airport Systems (NPIAS); and a dataset published by AirNav. As a starting point, in 2018 there were • 5,092 public-use airports in the United States. • 3,661 FBOs located at those airports. • 2,934 airports with one FBO. • 727 airports with multiple FBOs. C H A P T E R   1 Introduction The history behind the term “fixed-base operator” is interesting. Toward the end of World War I, in 1918, civil aviation was virtually unregulated and mostly made up of “barnstormers,” or transient pilots operating military surplus aircraft. Flying from city to city and landing in farmers’ fields, pilots set up temporary camps where they would offer airplane rides and flight lessons. With pressure from the Air Commerce Act of 1926—which resulted in licensing of pilots, aircraft maintenance requirements, and training standards—the pilots and mechanics making a living on the road started to develop permanent businesses, which were quickly termed “fixed-base operators,” or FBOs. Today, pilots depend on FBOs to provide amenities such as special catering requests, coffee, rental cars, and of course fuel for aircraft. Some FBOs are members of chains, and others are owned independently. The quality of the FBO plays a major role in daily operations of private aircraft. Adapted from Desert Jet, 2012

Introduction 5   Most of the FBOs (57%) were privately owned; the rest were owned by airport sponsors, including municipalities, counties, Native American tribes, and airport authorities. A few FBOs were owned by colleges and universities. ACRP Synthesis 108 also examined the trends shaping the FBO industry in 2018. Many of these trends have continued to develop during the past four years; some accelerated because of the COVID-19 pandemic. Other new developments emerged. March 2020 marked the beginning of the COVID-19 pandemic in the United States, which affected every aspect of life. Pandemic impacts proved uneven. Commercial aviation and the hospitality industry came to a virtual standstill as nations and individuals evaluated the best way forward. After the shutdown, a cautious and optimistic recovery commenced in different aviation segments. However, waves of new COVID variants continued to cause palpable distur- bances in the recovery. This synthesis examines trends in general aviation and explores how the pandemic affected the consumption of private air travel and the outlook for sustained changes in aviation and FBOs. As fundamentally relationship-based service businesses, FBOs are an excel- lent bellwether to explore shifts in customer preferences, sustainability practices, adoption of new technologies, and demand for private aircraft. In 2022, the FBO industry remains large and diverse, reflecting a broad spectrum of general aviation (GA) users and many different private companies and public entities that support air- craft and customers. Since the largest FBO chains and most independent or small-network FBOs are privately held companies, industry-wide analysis is elusive as much information remains with the private sector. There are comprehensive data on the demand side for aircraft sales and for GA operations, collected by the FAA’s Air Traffic Activity System. The bias here is toward larger aircraft and airports with air traffic control towers. There is less organized information about small non- towered GA airports. As noted in ACRP Synthesis 108, location-specific FBO information is largely self-reported on websites and listings in aviation databases published by AirNav, AC-U-KWIK, FlightAware, the Aircraft Owners and Pilots Association, and various electronic applications (which may be directed at pilots, flight departments, and schedulers and dispatch- ers). Self-reporting occurs primarily when an FBO operator is advertising fuel prices or aircraft, pilot, and passenger services. These listings are marketing efforts to retain and attract customers. For this reason, FBO directories and databases must be used with appreciation for the intended audiences and objectives of each data source. Putting together an updated picture of the FBO landscape involved original study and the use of multiple sources of information, as shown in Figure 1. This snapshot of the FBO industry includes discussions about the following: • Pandemic impacts on general aviation, including major shifts in how air travel was consumed during the most intense periods of COVID-19 lockdowns, a tight used aircraft market, growth of public charter operators reselling seats on private aircraft, and expansions into destination markets in favor of business centers. • Uneven recovery patterns at urban airports and small airports. • Durable changes in workforce location, size, and utilization. • More-comprehensive airport lease requirements for capital improvements and minimum standards. • Consolidation of FBO operators and the use of private equity to finance high-valuation mergers and acquisitions. • Greater reliance on real estate revenues rather than traditional FBO services such as fueling, de-icing, line services, and concierge services.

6 Landscape of the FBO Industry in 2022 • Increased hangar demand to accommodate today’s aircraft, financing challenges for hangar development, and fire safety requirements for larger hangars. • Observable progress in the availability of unleaded Avgas and sustainable aviation fuel. • Excitement and uncertainty about electrification of aircraft and the use of urban air mobility, advanced air mobility (AAM), and vertical takeoff and landing aircraft. • Crossover programs by airlines to participate in private aviation and AAM. • Community engagement in climate action to reduce airport carbon footprints and noise. • Funding needs and rate-setting trends for airport-owned FBOs. • Enduring volatility, risk management, and post-pandemic changes in demand for private avia- tion, FBO consolidation, labor, and services. The report is organized into multiple chapters, as shown in Figure 2. Chapter 2 provides a discussion of how COVID-19 affected private aviation, including business and personal travel. Chapter 3 provides an overview of how the FBO industry has changed since ACRP Synthesis 108 was published. Chapter 4 describes an online survey prepared and distributed to more than 700 FBOs and reports on the survey findings. Chapter 5 presents synthesis conclusions and a discussion for future updates once aviation activity and the economy have stabilized. Last, the appendices provide a bibliography and references, a copy of the online survey, and a list of abbreviations. Readers looking for a basic introduction to the FBO industry are encouraged to read ACRP Synthesis 108. While many articles have been written about the FBO industry, there is little published research. ACRP has published many research and synthesis reports that complement this study. Table 1 lists those relevant reports. Literature Search Synthesis Interviews Online FBO Survey Source: Adapted from Wikimedia Commons, the free media repository, User Amanda 44 (2022). Figure 1. Study process.

Introduction 7   Overview Summary Introduction Aviation and FBO Trends Trends in Private Aviation and the Economy Landscape of the FBO Industry Ongoing FBO Challenges Looking Ahead at FBO Opportunities Research and Findings Online Survey Results Conclusions Future Research and Updates Appendices Survey Tool Bibliography and References Abbreviations Figure 2. Report organization. Project/Report Number Publication Date Report Title ACRP Legal Research Digest 8 2009 The Right to Self-Fuel ACRP Legal Research Digest 11 2011 Survey of Minimum Standards: Commercial Aeronautical Activities at Airports ACRP Report 47 2011 Guidebook for Developing and Leasing Airport Property ACRP Report 60 2012 Guidelines for Integrating Alternative Jet Fuel into the Airport Setting ACRP Report 77 2012 Guidebook for Developing General Aviation Airport Business Plans ACRP Synthesis 63 2015 Overview of Airport Fueling Operations ACRP Legal Research Digest 28 2016 Operational and Legal Issues with Fuel Farms ACRP Research Report 165 2016 Tracking Alternative Jet Fuel ACRP Web-Only Document 28 2016 Identifying and Evaluating Airport Workforce Requirements ACRP Research Report 172 2017 Guidebook for Considering Life-Cycle Costs in Airport Asset Procurement ACRP Synthesis 86 2018 Airport Operator Options for Delivery of FBO Services ACRP Synthesis 89 2018 Clean Vehicles, Fuels, and Practices for Airport Private Ground Transportation Providers ACRP Legal Research Digest 37 2019 Legal Issues Relating to Airports Promoting Competition ACRP Research Report 192 2019 Airport Management Guide for Providing Aircraft Fueling Services ACRP Synthesis 94 2019 Attracting Investment at General Aviation Airports through Public–Private Partnerships ACRP Synthesis 97 2019 How Airports Plan for Changing Aircraft Capacity: The Effects of Upgauging ACRP Synthesis 104 2019 Current Landscape of Unmanned Aircraft Systems at Airports ACRP Synthesis 108 2020 Characteristics of the FBO Industry, 2018–2019 ACRP Synthesis 113 2020 Airport Workforce Programs Supporting Employee Well-Being ACRP Research Report 213 2020 Estimating Market Value and Establishing Market Rent at Small Airports ACRP Research Report 228 2021 Airport Microgrid Implementation Toolkit ACRP Research Report 236 2022 Preparing Your Airport for Electric Aircraft and Hydrogen Technologies ACRP Synthesis 130 2023 Airport Centric Advanced Air Mobility Market Study ACRP Project 03-71 [Anticipated] 2024 Guidelines for Planning for Future Electric Vehicle Growth at Airports ACRP Project 3-73 [Anticipated] 2024 Airport Guide for Transitioning to Unleaded Aviation Gasoline Table 1. Related ACRP publications.

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In 2020, ACRP Synthesis 108: Characteristics of the FBO Industry 2018–2019 described the characteristics of the fixed-base operator (FBO) industry using data collected in 2018 and 2019. The objective of this synthesis was to follow up ACRP Synthesis 108 by examining selected recent and current trends in the aviation industry and their impacts at FBOs.

ACRP Synthesis 129: Landscape of the FBO Industry in 2022, from TRB's Airport Cooperative Research Program, investigates how general aviation fared during the COVID-19 pandemic and how FBOs, as the principal service agents for the industry, met pandemic challenges and addressed changes that predated COVID-19.

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