National Academies Press: OpenBook

Landscape of the FBO Industry in 2022 (2023)

Chapter: Chapter 2 - Recent Trends in Aviation and the U.S. Economy

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Suggested Citation:"Chapter 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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 2 - Recent Trends in Aviation and the U.S. Economy." 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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8 Quick Takes The following bullet points summarize recent economic trends in the aviation industry. • Leisure markets were the first to rebound from the COVID-19 shutdown of commercial aviation. By early 2023, international and business travel segments had not yet returned to 2019 levels. • The substitution of private aircraft for commercial air travel led to a mini-boom in used air- craft acquisitions and sales of individual seats on charters. • From an airport perspective, the pandemic experience was uneven. Destination markets in the United States, pilot training centers, and airports that supported air-reliant industries experienced intensified aircraft activity. Other airports languished where pandemic closures reduced air demand. • All segments of the aviation industry are recovering, but labor shortages, rising costs, and continued perceived economic risk are adding challenges to a smooth recovery. COVID-19 Impacts on Aviation Activity Any discussion of recent trends in private aviation and the FBOs that serve this segment must first be framed in the context of the COVID-19 pandemic, which had an outsized impact on the aviation, hospitality, and tourism industries. The United States lost 22 million jobs and associ- ated income (Leeds School of Business, 2022). By June 2022, more than 1 million people in the United States had lost their lives to COVID-19. The federal government responded with three relief packages totaling $3.5 trillion to inject liquidity into households and businesses. Airports and airlines, as essential businesses, were among the recipients of COVID-19 relief grants. Unlike the Great Recession of 2008, whose recovery took several years to accomplish, COVID-19 closed the global economy suddenly and it incrementally opened back up in short order. By December 2021, 84% of jobs in the United States had been recovered or replaced. This nonstop recovery has created surprising complications and imbalances in the global economy, especially in supply chain efficiencies and transport, workforce shortages, and high volatility in fuel prices and demand for air travel. How air travel is consumed is still influenced by the ongoing COVID-19 recovery; hybrid models of employment, which offer a combination of remote and in-office work; and supply-side variability that has affected the labor market, parts supply, and availability of aircraft. Not all segments of aviation were equally affected by the pandemic. Figure 3 tracks how air carrier, air taxi, and GA operations in the United States compared to operations in the same month in 2019. Following shutdowns in March, April, and May of 2020, local and itinerant C H A P T E R   2 Recent Trends in Aviation and the U.S. Economy

Recent Trends in Aviation and the U.S. Economy 9   GA operations recovered quickly and reached 2019 levels as early as fall 2020. Flight schools, as an essential service, ramped up training programs. Some corporate travel on commercial flights migrated to private aircraft. Air carrier and air taxi operations followed a much slower recovery path, and as of September 2022, they remained nationally within 10%, but still below operations in 2019. The recovery of commercial aviation operations does not tell the whole story about how travel was consumed during the pandemic. Demand patterns have changed. Whether these changes, which include the following, are permanent remains to be determined: • In 2021, leisure markets led the recovery. Travel demand resulted in increased domestic trips. International destinations remained closed during the early days of the pandemic. U.S. carriers increased frequencies in the spring and summer of 2021 to destinations in states such as California, Colorado, Florida, Idaho, Massachusetts, and Montana. • Some workers became able to work from home, reducing business travel. Online meetings became a staple of the pandemic and remain in use to a lesser extent. Airlines reported that in fall 2022 it appeared air passengers were combining personal and business trips and smooth- ing out departure days throughout the week and on weekends. Holiday travel bookings also appeared less concentrated on specific days. • In 2020 and 2021, different COVID variants introduced continual fluctuations in travel demand. As recovery progressed in 2022, a national desire to be finished with the pandemic encouraged increased travel and relaxation of pandemic precautions. • That said, commercial airlines in 2022 continued to experience operational challenges involving workforce shortages, recertification of aircraft placed in storage, and supply chain - - - - - - - - 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0.1 0.2 0.3 43 83 1 43 86 2 43 89 1 43 92 2 43 95 2 43 98 3 44 01 3 44 04 4 44 07 5 44 10 5 44 13 6 44 16 6 44 19 7 44 22 8 44 25 6 44 28 7 44 31 7 44 34 8 44 37 8 44 40 9 44 44 0 44 47 0 44 50 1 44 53 1 44 56 2 44 59 3 44 62 1 44 65 2 44 68 2 44 71 3 44 74 3 44 77 4 44 80 5 Pe rc en t Ch an ge fr om S am e M on th 2 01 9 Air Carrier Air Taxi Local GA Air Carrier Air Taxi Itinerant GA Local GA Source: Compiled from Air Traffic Activity System (ATADS), 2022, https://aspm.faa.gov/opsnet/sys/Airport.asp. Figure 3. Variance in operations from same month in 2019.

10 Landscape of the FBO Industry in 2022 variabilities from aircraft manufacturers and original equipment manufacturers. Some small airports that purchased fuel on the spot market reported difficulties with fuel supply because of trucker shortages. • Health concerns and airline operational challenges prompted some companies and individuals to use private aircraft for the first time during the pandemic, resulting in new customers for private aircraft, charters, and fractional operators. This new demand put pressure on the used aircraft market and increased aircraft valuations. Low inventories of available airplanes for sale continued throughout the pandemic and into 2023. In addition, demand for jet cards— essentially a way to buy space on a private aircraft—was so strong that some operators at first raised hourly rates by 30% from 2020 rates and then halted jet card sales altogether because of insufficient capacity to satisfy demand. (Most operators resumed jet card sales in 2022.) According to a survey done in August and September 2022 of 571 paid subscribers to the Private Jet Card Comparisons service, 94% who started flying privately since the beginning of the pandemic plan to continue using private avia- tion. It is a small sample, but indicative of a potential shift for some busi- ness travelers. • The loss of business travel for commercial airlines was consequential. Before the pandemic, high-yielding premium passengers represented 9% of tickets but more than half of an airline’s revenue (Stalnaker et al., 2021). To make up for lost high-margin revenue, airlines had to carry many more lower-yielding passengers. Airlines remained under pressure into 2023 from ongoing flight delays, cancellations, staff shortages, cutbacks in capacity, and crowded board- ing areas at airports. • Substitution of private aviation for commercial flights may have hidden the true recovery of business travel. Business travel is typically tracked by book- ings by corporate travel departments on commercial flights. Figure 4 shows No crisis in modern times has shattered the aviation business model as much as the coronavirus pandemic. That’s because no previous crisis has undermined corporate travel—a major profit center of the airline industry— as much as COVID-19. Stalnaker et al., 2021 -100% -80% -60% -40% -20% 0% 20% Ja n- 21 Ja n- 21 Fe b- 21 M ar -2 1 A pr -2 1 A pr -2 1 M ay -2 1 Ju n- 21 Ju n- 21 Ju l-2 1 A ug -2 1 A ug -2 1 Se p- 21 O ct -2 1 O ct -2 1 N ov -2 1 D ec -2 1 Ja n- 22 Ja n- 22 Fe b- 22 M ar -2 2 M ar -2 2 A pr -2 2 M ay -2 2 M ay -2 2 Ju n- 22 Ju l-2 2 Ju l-2 2 A ug -2 2 Se p- 22 O ct -2 2Co m pa ri so n of T ic ke ts S ol d U si ng 2 01 9 Ba se lin e Day of Week Ending Corporate Travel Online Leisure/Other Corporate Leisure/Other Online Source: Compiled from Airline Reporting Corporation, 2022, https://www2.arccorp.com/. Figure 4. Total number of commercial airline tickets (all itineraries) per week compared with same period in 2019.

Recent Trends in Aviation and the U.S. Economy 11   ticketing on commercial airlines. According to Airline Reporting Corporation data, tickets issued on airlines by corporate travel departments were steadily improving in 2022 but remained 25% below 2019 levels. That said, some corporate travelers may have continued to use private aircraft and would not be reflected in the Airline Reporting Corporation data. Pandemic Impacts on Different Categories of Airports At the macro level, airports of all sizes have demonstrated resilience as air travel recovers from the pandemic. Table 2 and Figure 5 track total operations at different-sized airports with air traf- fic control towers. The smallest airports, known as local and basic general aviation airports, are not included in the figures, because most do not have a control tower and report traffic counts. Table 3 shows the percent recovery of total operations using 2019 as a base equal to 100%. Airport Category 2019 2020 2021 2022 Number of Reporting Airports 2022 Average Annual Operations per Airport Large-Hub 13,259,167 7,961,302 10,484,970 11,215,519 30 373,851 Medium-Hub 6,196,548 4,237,158 5,324,773 5,858,674 36 162,741 Small-Hub 7,153,790 5,713,621 6,777,988 7,012,434 77 91,071 Non-hub 7,422,569 6,247,224 7,385,083 7,371,350 137 53,805 National 8,226,773 7,416,923 8,288,041 8,853,724 78 113,509 Regional 10,654,529 9,578,898 10,379,036 11,036,987 142 77,725 Source: Compiled from Air Traffic Activity System (ATADS), 2023, https://aspm.faa.gov/opsnet/sys/Airport.asp. Table 2. Total airport operations at airports with air traffic control towers, calendar years 2019–2022. 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 Large Hub Medium Hub Small Hub Non-Hub Regional 2019 2020 2021 2022 Source: Compiled from Air Traffic Activity System (ATADS), 2023, https://aspm.faa.gov/opsnet/sys/Airport.asp. To ta l O pe ra tio ns National Figure 5. Total airport operations at airports with air traffic control towers, calendar years 2019–2022.

12 Landscape of the FBO Industry in 2022 From the perspective of operations, all categories of airports except large and medium hubs were close to 2019 levels by the end of 2022. National and regional general aviation airports exceeded 2019 operations. That said, air carriers have made measurable changes to their active fleet. The U.S. active passenger fleet declined by 4%, from 5,780 aircraft in 2019 to 5,575 aircraft in 2022. As Figure 6 shows, air carriers have increased the number of narrowbody aircraft by 7% and decreased the active fleet of smaller-capacity regional aircraft. This upgauging of the active fleet explains some reductions in total operations at medium and large hubs. Fewer regional aircraft in the fleet also implies that feeder air service to small communities has continued to decline. Other metrics for air carrier capacity and passenger activity support the thesis that as the worst of the pandemic subsides, domestic air service is recovering. Figure 7 tracks available seat miles scheduled for both domestic and international flights. With domestic flying leading the recovery, it appears that domestic scheduled capacity is on par with or slightly ahead of 2019. At the end of 2022, international available seat miles continued to lag at about 80% of 2019 capacity. On the passenger side, the U.S. TSA has tracked daily passengers screened at TSA checkpoints since the pandemic began. These data, shown in Figure 8, provide a view of passenger activity Airport Categories 2019 2020 2021 2022 Large-Hub 100% 60% 79% 85% Medium-Hub 100% 68% 86% 95% Small-Hub 100% 80% 95% 98% Non-hub 100% 84% 99% 99% National 100% 90% 101% 108% Regional 100% 90% 97% 104% Source: Compiled from Air Traffic Activity System (ATADS), 2023, https://aspm.faa.gov/opsnet/sys/Airport.asp. Table 3. Percent recovery of total aircraft operations from 2019. 660 1,150 3,475 495 331 1,065 3,706 473 Small Regional (< 50 seats) Large Regional (51-100 seats) Single-Aisle (narrowbody) Twin-Aisle (widebody) Dec 31 2019 Dec 31 2022 Note: Active aircraft operated on behalf of Alaska, Allegiant, American, Delta, Frontier, Hawaiian, JetBlue, Southwest, Spirit, Sun Country, or United. Source: Prepared from data published in Airlines for America, 2023. Figure 6. U.S. active passenger fleet, 2019 and 2022.

Recent Trends in Aviation and the U.S. Economy 13   throughout the pandemic. In 2020, TSA checkpoints handled on average 40% of the number of passengers that passed through security in 2019. On the lowest days in March, April, and May 2020, checkpoints handled 4% or 5% of 2019 passengers. In 2021, the number of passengers pass- ing security was on average 68% of 2019 levels, and in 2022, daily passengers were about 90% of 2019 levels. In the first 25 days of 2023, TSA checkpoints reported more screened passengers than in the same period in 2019 (an average of 103% of 2019 counts). Local Factors Heavily Influenced Pandemic Impacts and Outcomes An abundance of data for commercial airline GA activity is available. Surveys, interviews, and some published statistics helped to build an understanding of how the pandemic affected general aviation airports and FBOs. Virginia Tech/Montgomery Executive Airport (BCB) is an example of a small GA airport that took advantage of the early days of the pandemic to complete a major runway extension project. One side of the airport borders Virginia Tech and, with the new runway capabilities, BCB can now handle jet aircraft. During the pandemic, while students were mostly home, the university and town completed several large housing projects. With little nonstop air service available at nearby Roanoke–Blacksburg Regional Airport (ROA), construction companies flew management and skilled workers directly into BCB. Once classes resumed at Virginia Tech, the soccer and basketball teams could then use the airfield for charter flights to games. BCB has experienced increased jet traffic and much higher fuel sales. The airport, serving as the FBO, historically purchased fuel on the spot market. As delivery dates were delayed because of truck driver shortages, the airport contracted with a branded fuel company and delivery delays abated. Recruiting employees was the most challenging part of the pandemic and continues to be an issue for both part-time and full-time employees. Note: January 2019 = 1. Source: Published by Oliver Wyman from OAG schedule data via PlaneStats.com (2022). Figure 7. Capacity index of available seat miles on a rolling 12-month basis.

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 10 6 11 3 12 0 12 7 13 4 14 1 14 8 15 5 16 2 16 9 17 6 18 3 19 0 19 7 20 4 21 1 21 8 22 5 23 2 23 9 24 6 25 3 26 0 26 7 27 4 28 1 28 8 29 5 30 2 30 9 31 6 32 3 33 0 33 7 34 4 35 1 35 8 36 5 D ai ly P as se ng er s th ro ug h TS A C he ck po in ts Day of Year 2023 2022 2021 2020 2019 Source: Compiled from TSA, 2023, data, https://www.tsa.gov/travel/passenger-volumes. Figure 8. TSA checkpoint travel numbers, January 1, 2019–January 25, 2023.

Recent Trends in Aviation and the U.S. Economy 15   The absence of commercial air service in the early days of the pandemic resulted in greater interest in and use of private aviation at specific locations, especially areas outside the urban corridor. Among the industries and activities that increased reliance on private aviation were • Construction management and inspection services. • Medical airlift of patients, lab tests, medicines, vaccines, and pandemic protection gear. • Urgent transport of essential industrial and manufacturing parts and equipment. • Technology support services. • Transport of workers skilled in specialty trades and professions. • Pilot training. • Administrative functions for large chains of essential businesses such as banks, grocery stores, and hospitals. • Law enforcement and search and rescue. • Access to recreational experiences, such as golf, hiking, and skiing. • Professionals commuting between second homes and offices. Some general aviation airports languished as local economic activities such as the following were shut down: • Airports that provide a supporting role to corporate travel. • Large-scale people-gathering events such as football games, air shows, NASCAR races, concerts, and conventions. • Universities, with students at home and research centers closed. • Skydiving and balloon centers. • In-person government meetings, inspections, and oversight. Temporary, but consequential, adverse impacts from the pandemic affected some general avia- tion airports in urban areas and small towns dependent on a few aviation customers. For example, Teterboro Airport (TEB), in New Jersey 12 miles from Midtown Manhattan, lost 50% of its traffic in 2020 but regained most of it back by the end of 2022. Similarly, Wittman Regional Airport (OSH) in Wisconsin, home of EAA AirVenture Oshkosh—an annual airshow and aviation convention— cancelled the 2020 fly-in and lost the economic benefits of the event and more than a third of its traffic that year. When the fly-in resumed in 2021, traffic and fuel sales returned to 2019 levels. Teterboro traffic had climbed back up to 98% of 2019 levels by the end of 2022. Other GA airports and FBOs, dependent on fuel sales as a primary source of revenue, were hit hard. The National Business Aviation Association in April 2020 reported that: • Fuel sales at Gainesville Municipal Airport (GLE) in Texas were one-tenth of comparable months in previous years. • A major tenant at Texas Gulf Coast Regional Airport (LBX) informed the airport that fuel purchases would decline by 75% in the months ahead. • Okeechobee County Airport (OBE) in Florida reported fuel sales “are close to zero.” • Closure of a skydiving business at DeLand Municipal Airport (DED), Florida, contributed to a drop of 90% of traffic. • Some airport businesses and concessions feared that they would not be able to make rent. At many GA airports, COVID impacts were more nuanced. Virginia Highlands Airport (VJI) in Abingdon, Virginia, stayed busier than ever. With eight corporate jets based at the airport, these aircraft were actively used throughout the pandemic and became the lifeblood of jet fuel sales. One jet was operated by a grocery chain that had stores in four or five states; another was operated by a bank chain. These businesses never closed during the pandemic, and the jets flew two to three times per week. In addition, the airport is located near two golf course country clubs. VJI became a popular airport destination for avid golfers. VJI’s main challenge was managing

16 Landscape of the FBO Industry in 2022 staff. The airport had 10 or 11 full-time employees, 3 of whom were administrative. It was dif- ficult to offer remote options for any employees and keep the airport operating. So airport man- agement stayed flexible to cover for sick employees and provide a safe working environment. Some employees worked 12-hour shifts; others worked on weekends or nights. Since the airport is operated by the county, it had to abide by county work rules and pay. To stay competitive, the airport was able to increase starting pay and has tried to stay flexible with work schedules to retain staff. Boom in Private Jet or Turboprop Aviation The potential for attracting additional business and high-net-worth travelers during the pan- demic did not go unnoticed by private charter operators. Private air travel experienced tre- mendous growth during the pandemic by offering schedule flexibility, more personal space, and potentially lower exposure to COVID-19. There are several primary ways to participate in private jet or turboprop flying, which are highlighted in Table 4. For each of the options, the important details include financing, annual costs, and fees as well as rules about advance booking requirements, aircraft routing, aircraft type, and number of passengers onboard. Charter and Fractional Operators During the pandemic, fractional and charter operators gained a significant share of the overall private jet market, flying a record 2,699,184 flight hours in 2021, a 64% increase over 2020 and 24% above 2019 (Gollan, 2023). This new demand was due in part to new private air passen- gers migrating from commercial flights. Figure 9 shows historical flight hours for charter and fractional operators since 2007 and their market share of total private aircraft hours. In 2019, operators under Federal Aviation Regulations parts 135 and 91k (in title 14 of the Code of Fed- eral Regulations, which deal with charter and shared fractional jets) accounted for 48.6% of total hours flown; in 2021, shared jets accounted for 54.3% of total hours flown. Private Aviation Options Description Pros/Cons Full ownership Own your own aircraft Flexible schedule, personalized cabin, control over pilot selection, tax advantages. Requires large capital investment and ongoing expenses for maintenance and aircraft storage. Full ownership often involves annual flying hours of more than 150 hours/year. Fractional ownership Multiple users split the cost of an aircraft and can access a fleet of similar aircraft for a contracted number of hours Smaller investment, tax advantages, additional fees. Requires a 3- to 5-year commitment. Typically, fractional ownership involves more than 50 hours of flying per year for each owner. Jet card A block of prepaid flight hours Smaller time and financial commitment, locked-in flight cost, no asset risk, minimum flying times. Can require a membership fee. Jet cards sell prepaid annual flight hours. Actual costs to fly can be quite complex. Charter On-demand flying Maximum flexibility and no capital commitment. Aircraft or pricing not guaranteed. Might have to pay for positioning or use empty-leg options. Source: Adapted from Bryant, 2022. Table 4. Primary options for flying private turboprops or jet aircraft.

Recent Trends in Aviation and the U.S. Economy 17   The largest part 135 and part 91k operators account for 20% of total private jet hours flown, with NetJets, owned by Berkshire Hathaway, being the largest by far. Table 5 shows growth of the top five fractional and charter operators since 2019. During the pandemic, these companies were actively engaged in mergers, acquisitions, fleet orders, and stock launches. NetJets added 80 aircraft in 2021 and another 75 jets in 2022 (Epstein, November 2022). In 2021, Wheels Up completed a public offering via a special purpose acquisition company (SPAC), acquired Moun- tain Air and Alante Air Charter, and forged a partnership with Delta Airlines. These acquisi- tions resulted in the company increasing total flight hours by 818% between 2019 and 2021. Expansion of the largest operators has continued. Flexjet and flyExclusive anticipate going public using SPACs. Vista Global acquired Apollo Jets and Talon Air and has an agreement to buy Air Hamburg. In addition to traditional fractional and charter operators, business models that involve resale of individual seats on public charter flights have expanded under U.S. DOT authorization of 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Pr iv at e Je t H ou rs Charter & Other Private Jet Hours Source: Compiled from Gollan, 2022. Figure 9. Private jet hours, 2007–2021. Global Flight Hours Percent Change Operator 2019 2020 2021 2019–2021 2020–2021 NetJets 462,574 336,252 542,831 17% 61% Flexjet 130,379 134,481 178,327 37% 33% Wheels Up 18,169 107,592 166,805 818% 55% Vista Global 65,344 71,343 96,200 47% 35% flyExclusive 20,764 25,872 46,617 125% 80% Totals 697,230 675,540 1,030,780 48% 53% Sources: Adapted from Private Jet Card Comparisons’ compilation of Argus TraqPak’s (2022) data of part 91k and part 135 operators. Table 5. Largest charter and fractional operators: global flight hours of U.S. registered aircraft.

18 Landscape of the FBO Industry in 2022 parts 380 and 135 of the Code of Federal Regulations. For example, JSX is a hop-on jet charter ser- vice operating in 23 cities (as of January 2023). JSX customers fly between private air terminals on 30-seat Embraer jets. Passengers using JSX can also earn United mileage points for each trip. BLADE—perhaps known best for its continuous helicopter services to airports in New York, Miami, and Los Angeles—allows purchase of individual seats on scheduled flights to vacation spots such as Aspen, Colorado; Miami, Florida; and Nassau, The Bahamas. The New York–Miami flight leaves Westchester County Airport (HPN) and flies to Miami-Opa Locka Executive Air- port (OPF) in a reconfigured CRJ200. BLADE also offers a feature called “FlightTilt” that allows an individual to propose a shared charter. The flight is confirmed once four other seats are sold. Los Angeles–based Surf Air, like BLADE, does not own or operate any aircraft but instead acts as an agent for its members. The company offers four membership options ranging from $199 per month to gain access to any flight to $2,999 per month to fly across the entire network without limits. Other companies such as Set Jet, Wheels Up, Linear Air, and XO also operate in this segment. XO offers empty-leg specials that can save 50% to 75% of the usual cost. Wheels Up has a rela- tionship with Delta SkyMiles (Stawski, 2021). These part 380 charter operators have crafted itineraries and membership programs to attract and keep users on private aircraft. The pandemic gave this aviation segment a boost that bears watching as these companies refine their products and offer an alternative to scheduled com- mercial flights. Used Aircraft Sales Between 2020 and 2021, as the fractional and charter operators grew, there were also many first-time private aircraft buyers in the market. High demand for aircraft led to increases in air- craft valuations (as much as 50% increases in median values) and historically low inventories of pre-owned aircraft. For aircraft buyers, cash was king, with nearly 70% of all transactions in cash; just over 20% purchased with loans; and under 10% with leases (Young, 2022). Aircraft manu- facturer backlogs limited the number of new aircraft available for purchase. Figure 10 tracks pre-owned private jet transactions and aircraft deliveries by quarter, from first quarter 2020 through second quarter 2022. Several features of the graph are notable: • Production caps on new aircraft kept deliveries constant throughout the pandemic. • Supply chain and labor constraints continue to keep manufacturing output in check for the near future. • December is a peak month for purchases of aircraft both new and pre-owned, suggesting that year-end tax strategies and bonus depreciation may have inspired aircraft acquisitions. Mixed Signals for the Economy—Direction Still Unfolding The aviation industry has always been closely associated with the condition of the economy. The COVID-19 pandemic disrupted traditional relationships. Multiple indicators provide a visual of the economic uncertainty of the times: • Real GDP (gross domestic product; “real GDP” is adjusted for inflation) has been volatile during the pandemic but appears at the beginning of 2023 to show continued growth. • Inflation at the consumer level and producer price levels has moderated but remains at histori- cally high levels. • The Federal Reserve Board continues to use interest rates as a principal tool to manage and stabilize the economy.

Recent Trends in Aviation and the U.S. Economy 19   • Civilian unemployment rates are at a 20-year low. • Aviation fuel prices are fluctuating with the price of crude oil. • Geopolitical tensions, including the war in Ukraine, are increasing perceived levels of risk. The figures in the next sections illustrate some of the mixed signals present in the economy. Real GDP, Seasonally Adjusted Real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced in the economy during a specific period. Real GDP makes comparing GDP from year to year or from quarter to quarter more meaningful, because it filters out the effects of inflation on economic activity (Ganti, 2023). Figure 11 shows the changes in GDP between one quarter and the previous quarter and high- lights the volatile effects of first the COVID shutdown and then the resumption of economic activity in the third quarter of 2020. Given the rebound effects through June 30, 2022, it is not evident in this historical chart which direction the economy is headed; however, GDP is per- forming slightly below the trend line established over the past five years. Real GDP and Aviation Operations The COVID-19 pandemic had a profound impact on aviation, airports, and the hospitality industry. Figure 12 compares the percent change in GDP and aircraft activity with the same quarter in the previous year. Year-over-year change is shown to account for seasonality in air carrier and general aviation activity. The figure shows the close relationship between GDP and aviation activity up until the end of the Q1 2020, when this correlation went off the rails with a decline or change in commercial operations far greater than GA operations. Aircraft operations are trending back to historical relationships with economic activity. - 500 1,000 1,500 2,000 2,500 IQ 2020 IIQ 2020 IIIQ 2020 IVQ 2020 IQ 2021 IIQ 2021 IIIQ 2021 IVQ 2021 IQ 2022 IIQ 2022 Pre-owned Turbine New Piston New Turboprops/Jets Note: IQ = first quarter; IIQ = second quarter; IIIQ = third quarter; IVQ = fourth quarter. Sources: AMSTAT, Business Aviation Quarterly Reports, February 2022 and October 2022; General Aviation Manufacturers Association, General Aviation Aircraft Shipment Reports: IQ 2020–IIQ 2022. Figure 10. Pre-owned business jet transactions and aircraft shipments, IQ 2020–IIQ 2022.

20 Landscape of the FBO Industry in 2022 Source: Compiled from Federal Reserve Bank of St. Louis and Air Traffic Activity System (ATADS), 2022. -65% -15% 35% 85% 135% IQ 2 01 3 2Q 2 01 3 3Q 2 01 3 4Q 2 01 3 IQ 2 01 4 2Q 2 01 4 3Q 2 01 4 4Q 2 01 4 IQ 2 01 5 2Q 2 01 5 3Q 2 01 5 4Q 2 01 5 IQ 2 01 6 2Q 2 01 6 3Q 2 01 6 4Q 2 01 6 IQ 2 01 7 2Q 2 01 7 3Q 2 01 7 4Q 2 01 7 IQ 2 01 8 2Q 2 01 8 3Q 2 01 8 4Q 2 01 8 IQ 2 01 9 2Q 2 01 9 3Q 2 01 9 4Q 2 01 9 IQ 2 02 0 2Q 2 02 0 3Q 2 02 0 4Q 2 02 0 IQ 2 02 1 2Q 2 02 1 3Q 2 02 1 4Q 2 02 1 IQ 2 02 2 2Q 2 02 2 Pe rc en t Ch an ge fo r Q ua rt er O ne Y ea r A go Real GDP Real GDP Figure 12. Change from quarter one year ago in air carrier and general aviation operations and real GDP, seasonally adjusted, 1Q 2012–2Q 2022. 0.7% 2.2% 2.7% 3.6% 5.0% -4.6% -29.9% 35.3% 3.9% 6.3% 7.0% 2.7% 7.0% -1.6% -0.6% 2.6% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Source: Compiled from Federal Reserve Economic Data (FRED), Federal Research Bank of St. Louis, https://fred.stlouisfed.org /series/GDP. Figure 11. Real gross domestic product: Percent change from preceding quarter, seasonally adjusted.

Recent Trends in Aviation and the U.S. Economy 21   Inflation The United States operates in a complex global economy, which was halted for a short time during the pandemic. Work stoppages resulting in supply chain disruptions and steps by the United States and Europe to keep national economies functioning led to imbalances and ineffi- ciencies between supply and demand at all stages of production, distribution, and consumption. These imbalances led to an inflationary environment. The war in Ukraine, economic sanctions against Russia, and COVID-related lockdowns in China from 2020 to 2022 have also likely con- tributed to a high degree of economic volatility and uncertainty. Figures 13 and 14 show this Sources: Compiled from Bureau of Labor Statistics CPIAUCSL and WPSFD4 datasets, Federal Reserve Economic Data (FRED), Federal Research Bank of St. Louis, 2022. Se p 0 50 100 150 200 250 300 -1 2 M ar -1 3 Se p- 13 M ar -1 4 Se p- 14 M ar -1 5 Se p- 15 M ar -1 6 Se p- 16 M ar -1 7 Se p- 17 M ar -1 8 Se p- 18 M ar -1 9 Se p- 19 M ar -2 0 Se p- 20 M ar -2 1 Se p- 21 M ar -2 2 Se p- 22 CP I I nd ex , 1 98 2- 19 84 = 1 00 Consumer Price Index (CPI) Producer Price Index (PPI) PPI CPI Figure 14. Consumer Price Index (CPI) for all urban consumers and Producer Price Index (PPI), seasonally adjusted, 2012–2022. -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% Se p- 12 M ar -1 3 Se p- 13 M ar -1 4 Se p- 14 M ar -1 5 Se p- 15 M ar -1 6 Se p- 16 M ar -1 7 Se p- 17 M ar -1 8 Se p- 18 M ar -1 9 Se p- 19 M ar -2 0 Se p- 20 M ar -2 1 Se p- 21 M ar -2 2 Se p- 22 Pe rc en t Ch an ge fr om P re vi ou s M on th Source: Compiled from Bureau of Labor Statistics CPIAUCSL datasets, Federal Reserve Economic Data (FRED), Federal Research Bank of St. Louis, 2022. Figure 13. Monthly change in Consumer Price Index, seasonally adjusted, 2012–2022.

22 Landscape of the FBO Industry in 2022 period of uncertainty from different economic perspectives and set an important context for future GA activity and FBO operations. Figure 13 shows the monthly changes (from the previous month) in the Consumer Price Index (CPI). The steady march in CPI for all urban consumers in the United States started in summer 2020, with a large amount of monthly variability. Figure 14 tracks the index values of the CPI as well as the Producer Price Index (PPI) for the past 10 years. The period from fall 2012 to 2017 was relatively stable. The indices start a slow climb at that point until March 2020, when both the CPI and the PPI start to rise. Notably the CPI is rising faster at this point than the PPI, although both began to level off in September 2022. Crude Oil, Jet Fuel, and Avgas Fuel Prices The prices of crude oil and aviation fuels are subject to inflationary pressures. Crude oil spot prices and the wholesale or resale price for jet fuel and Avgas historically track each other, with Avgas sold at a premium because of additional refinery processes and limited refinery produc- tion. Prior to the pandemic, petroleum prices were trending downward. Since spring 2020, prices of crude oil and refined aviation fuels have been rising with intermittent declines along the way (See Figure 15). Cutbacks in production by the Organization of the Petroleum Exporting Countries (OPEC) and shortages arising from the war in Ukraine, in addition to inflationary pressures, are contributing factors to rising prices. To offset rising crude oil prices, the U.S. Department of Energy held public sales of oil from the Strategic Petroleum Reserve, which as of the end of 2022 had stabilized the price of crude oil. Employment and Unemployment Civilian monthly employment and unemployment rates are shown in Figure  16. Civilian employment (in thousands) is defined as “persons 16 years of age and older residing in the 50 states Source: Compiled from data from U.S. Energy Information Administration, 2022, https://www.eia.gov/dnav/pet/hist /LeafHandler.ashx?n=pet&s=rwtc&f=m. $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 Re fin ed P ro du ct s W ho le sa le /R es al e D ol la rs /G al lo n Fr ee -O n- Bo ar d Sp ot P ri ce D ol la rs /B ar re l WTI Crude Jet Fuel Avgas Linear (WTI Crude) Linear (Jet Fuel) Linear (Avgas) Figure 15. WTI (West Texas Intermediate) crude oil spot prices and wholesale prices for jet fuel and Avgas, 2012–2022.

Recent Trends in Aviation and the U.S. Economy 23   and the District of Columbia, who are not inmates of institutions (e.g., penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces” (Bureau of Labor Statistics). The unemployment rate represents the number of unemployed as a percentage of the total labor force. Civilian employment was on a steady rise prior to the pandemic and unemploy- ment was declining. Since the recovery, employment and the unemployment rate have returned to pre-pandemic levels; however, several industries, including aviation, report difficulty recruit- ing and retaining workers. Tight labor market conditions and inflation have put upward pressure on wages and thus have contributed to the current inflationary cycle. Rising Interest Rates Given continuing imbalances in demand and supply, rising inflation, and world tensions, the Federal Reserve System in 2022 employed interest rate hikes to slow down the economy and dampen inflation. Increasing interest rates is the principal tool the Federal Reserve has to combat inflation. For aviation, inflation has increased the cost both for fuel and for labor. Higher interest rates affect borrowing costs for aircraft, working capital, and capital expenditures funded by debt. Figure 17 shows the 10-year history of the federal funds rate, which functions as the central interest rate in U.S. financial markets. It influences other interest rates, such as the prime rate, which is the rate banks charge their customers with higher credit ratings. Additionally, the federal funds rate indirectly influences longer-term interest rates, such as mortgages, loans, and savings, all of which are very important to consumer wealth (Monetary Policy, Board of Governors of the Federal Reserve System). The Federal Open Market Committee meets eight times a year to determine the federal funds target rate. As Figure 17 indicates, this rate is subject to important fluctuations as the committee controls the amount of liquidity available to U.S. banks. During the pandemic, the rate was kept low to keep funds circulating in the economy. The tightening that began in 2022 is evident in the graph. 120,000 125,000 130,000 135,000 140,000 145,000 150,000 155,000 160,000 165,000 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Se p- 12 Fe b- 13 Ju l-1 3 D ec -1 3 M ay -1 4 O ct -1 4 M ar -1 5 A ug -1 5 Ja n- 16 Ju n- 16 N ov -1 6 A pr -1 7 Se p- 17 Fe b- 18 Ju l-1 8 D ec -1 8 M ay -1 9 O ct -1 9 M ar -2 0 A ug -2 0 Ja n- 21 Ju n- 21 N ov -2 1 A pr -2 2 Se p- 22 M on th ly E m pl oy m en t ( 00 0’ s) M on th ly U ne m pl oy m en t Ra te (P er ce nt ) Unemployment Rate Employment (000's) Linear (Unemployment Rate) Linear ( Employment (000's) ) Source: Compiled from data from Federal Reserve Economic Data (FRED), September 2022 Figure 16. Civilian monthly employment and unemployment rate (percent), seasonally adjusted.

24 Landscape of the FBO Industry in 2022 FAA Aerospace Forecasts Forecasting in the aftermath of the pandemic is especially challenging given mixed economic signals, continuing worldwide tensions, and supply chain issues. Since airline deregulation in 1978, air carriers have endured multiple peak and low business cycles, bankruptcies, and mergers. By the Great Recession of 2008, U.S. airlines had fine-tuned their operations through continual elimination of unprofitable routes, sophisticated yield management, reduction of travel agent costs, fuel hedging, use of service fees, and retirement of old and inefficient aircraft. During the post-recession period, these strategies likely contributed to profitability levels and market posi- tions going into the pandemic. These same tools equipped airlines with the ability to rapidly reduce capacity and costs and respond to travel demand changes during the pandemic. The regional airlines had a tougher time because most are highly dependent on contracts with network carriers. During the pandemic, three regional airlines—Trans States, ExpressJet, and Compass Airlines—ceased operations as American, Delta, and United consolidated remaining regional spoke service. Mainline carriers have also recruited regional carrier pilots to fill vacancies, result- ing in both a shortage of pilots and rising labor costs for the regionals. The strategies that the airlines used to survive the pandemic are likely to shape the industry for years to come. FAA forecasts expect airlines to remain smaller, with reduced aircraft fleets and workforces (FAA, June 2022). Since FBOs are demand-driven businesses, changes within the different segments of aviation will reflect eventually on FBO sales revenue, customer base, and growth prospects. If mainline airlines stay at reduced operating capacity, private aircraft operators may keep first-time cus- tomers that they recruited during the pandemic. Other trends in general aviation appear to have accelerated: • Growth of the turbine aircraft fleet (jets and helicopters) will continue to offset the retirement of older piston aircraft and helicopters. Sources: Compiled from Federal Reserve Economic Data (FRED), October 2022. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 Oct-20 Oct-21 Oct-22 D ai ly F ed er al F un ds E ff ec ti ve R at e (P er ce nt ) Figure 17. Federal Reserve System federal funds effective rate, October 2012– October 2022.

Recent Trends in Aviation and the U.S. Economy 25   • While piston aircraft will remain dominant in terms of the total number of aircraft, hours flown (and fuel consumed) by turbine aircraft are now the growth engine for general aviation. The FAA expects aircraft hours to increase by 31.4% between 2020 and 2042, or 1.2% annually. Turbine, rotorcraft, and experimental aircraft account for all this growth (FAA, June 2022). Composition of the General Aviation Fleet Figure 18 shows the FAA’s estimated composition of active aircraft in the U.S. general aviation fleet in 2021. Single-engine and multi-engine piston aircraft combined—despite annual declines for more than a decade—still make up 66% of the GA fleet. Turbine and piston helicopters repre- sent 5% of the fleet, and jets, 13%. Experimental and light sport aircraft may be the replacement aircraft for recreational enthusiasts, at 14% of the fleet. Different General Aviation Segments Are Growing or Contracting The FAA takes information collected from the annual General Aviation and Part 135 Activity Survey and prepares assumptions about aircraft deliveries (obtained from the General Aviation Manufacturers Association), retirement rates, and forecasted economic growth to estimate the future fleet size and level of general aviation activity. The most current survey was completed in 2020. Table 6 shows FAA forecasts for fleet size, hours flown, and fuel consumed. The year 2021 is the estimated base year. Built into those forecasts is a sizeable increase in jet fuel consumed between 2021 and 2022, which is consistent with observed growth in private jet aviation, par- ticularly among fractional and charter operators. Of note, in 2021 turboprop and turbojet (turbine) aircraft made up 13% of the active fleet. By the end of the forecast period, the number of active piston aircraft in the fleet is estimated to decline by 22,055 aircraft, and turbines will increase by 12,425. In 2042, turbine jets will be 18% of the active fleet. Figure 19 and Figure 20 show the FAA forecasts of hours flown and fuel consumed. In terms of numbers of aircraft, piston aircraft remain the dominant aircraft type in general aviation. However, in terms of hours flown and fuel consumed, turbine aircraft represent greater growth opportunities and volume of fuel sales for an FBO (See Table 6). Single Engine, 123,105, 60% Turbo-Jet, 15,755, 8% Rotorcraft Piston, 2,920, 2% Rotorcraft Turbine, 6,900, 3% Experimental, 27,000, 13% Light Sport, 2,765, 1% Other, 3,820, 2% Turbo-Prop, 10,275, 5% Multi-Engine, 11,865, 6% Source: Compiled from data from FAA, June 2022. Figure 18. Composition of the U.S. active general aviation and air taxi fleet, 2021 (estimated).

26 Landscape of the FBO Industry in 2022 The FAA forecasts do not address the impacts of unleaded Avgas and sustainable aviation fuel (SAF) on the active fleet. These fuels are already available in limited quantities for use in qualified aircraft. It is likely these fuels can and will be substituted for existing refined products. In this scenario, the impact of unleaded fuels on the fleet would be less than if these fuels required costly aircraft modifications. For FBOs that depend on Avgas sales as a principal source of revenue, the forecasts indicate that smaller FBOs will need to increase market share, offer new services, or increase real estate revenues to offset reduced demand for this fuel. Wrap-Up on Aviation Trends In the period leading up to the pandemic, both the economy and commercial aviation regis- tered a solid performance. General aviation achieved stability by offsetting declines in the piston aircraft segment with growth in business aviation. An airport’s location and mix of customers influenced the degree and nature of pandemic impacts. General aviation fared well compared Active Aircraft Hours Flown (000's) Gallons of Fuel Consumed (000's) Per Piston Aircraft Per Turbine Aircraft Year Piston Turbine Piston Turbine Avgas Jet Fuel Hours Fuel Hours Fuel 2021 134,970 26,030 12,967 6,372 205,000 1,519,000 96 1,519 245 58,356 2022 133,815 26,480 12,942 7,022 206,000 1,680,000 97 1,539 265 63,444 2032 121,845 31,955 11,824 9,685 197,000 2,292,000 97 1,617 303 71,726 2042 112,915 38,455 11,294 11,743 184,000 2,707,000 100 1,630 305 70,394 Average Annual Growth 2021–2022 −0.9% 1.7% −0.2% 10.2% 0.6% 10.6% 0.7% 1.4% 8.3% 8.7% 2022–2032 −0.9% 1.9% −0.9% 3.3% −0.5% 3.2% 0.0% 0.5% 1.3% 1.2% 2022–2042 −0.8% 1.9% −0.7% 2.6% −0.3% 2.4% 0.2% 0.3% 0.7% 0.5% Note: 2021 was the estimated base year. Source: Compiled from data from FAA, June 2022. Table 6. Historical and forecast general aviation active aircraft, hours flown, and fuel consumed. Note: 2021 was the estimated base year. Source: Compiled from data from FAA, June 2022. - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 10,000 10,500 11,000 11,500 12,000 12,500 13,000 13,500 2021E 2022 2027 2032 2037 2042 Tu rb in e A ir cr aft H ou rs F lo w n (0 00 's ) Pi st on A ir cr aft H ou rs F lo w n (0 00 's ) Turbine Piston Figure 19. FAA forecasts of hours flown by piston and turbine aircraft.

Recent Trends in Aviation and the U.S. Economy 27   to commercial aviation, particularly at airports with air-reliant businesses that did not close. Destination airports were also a standout for increased traffic. The market for used business aircraft increased during this time. Valuations of heavy jets, super-mid jets, medium jets, light jets, and turboprops soared as much as 30%–50%. In the used aircraft market, inventory remained at historic lows. Around 70% of transactions in this market involved cash deals. During this period, there was extensive merger and acquisition activity among the fractional and charter operations and the FBOs. As the worst of the pandemic subsides in early 2023, travel demand is up, and all segments of the aviation industry are recovering. The rapid closure and opening of the industry have come with difficult-to-solve complications that are preventing commercial airlines from taking full advantage of the travel boom. This has presented some private aviation operators with opportu- nities. The largest challenge facing the industry is a labor shortage in every category from pilots to baggage handlers, agents, flight attendants, mechanics, line technicians, air traffic controllers, TSA agents, and vendors that supply airports and aircraft. The industry remains regulated to the extent that these workers require training (sometimes hours of training and certification), background checks, and drug testing. Rising and competitive wages in other industries, health insecurity, and on-location work requirements as well as the retirement of the baby boomers have each contributed to the labor shortfalls. The Great Resignation is a commonly discussed and unfolding phenomenon. Tight labor conditions have affected aviation businesses of all sizes. Assembling flight crews in the right location has challenged major carriers and caused cancellations or delays during bad weather and peak holiday periods. For a general aviation airport or an FBO, labor shortages can have significant impacts. The loss of one key employee can hamper airfield operations, line services, or aircraft repairs for prolonged periods if new recruits are unavailable. With the prospects of increasing travel demand in the spring and summer of 2023, there are good reasons for the large and small segments of the aviation industry to address and solve the challenges of labor shortages, rising costs, and continued perceived economic risk. - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 170,000 175,000 180,000 185,000 190,000 195,000 200,000 205,000 210,000 2021E 2022 2027 2032 2037 2042 Je t F ue l C on su m ed (0 00 's o f G al lo ns ) A vg as C on su m ed (0 00 's o f G al lo ns ) Jet Fuel Avgas Note: 2021 was the estimated base year. Source: Compiled from data from FAA, June 2022. Figure 20. FAA forecasts of Avgas and jet fuel consumption.

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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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