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Aviation History
2000
2000 - 1550.PDF
Signature has stormed the FBO market to become the largest chain with 49 bases worldwide. The BBA-owned company is eying further global markets. company, while enabling the owners to remain in charge and enabling its executives to contin ue at the helm." Although the option of outright sale or fran chise is available, Sommers expects that the "part sale" alternative will be a popular alterna tive for cash-strapped FBOs. FRACTIONAL INFLUENCE Like its counterparts, Addison, Texas-based Million Air claims to be "simply responding to market forces". Sommers adds: "The FBO business can be very profitable indeed if a com pany is placed in the right hands." Signature's Van Allen agrees: "The last decade particularly has been a hotbed of activity. FBO companies have begun to realise that fuel and handling are not the only services their customers require." He cites the introduction and subsequent surge in fractional ownership as one of the single biggest influences on the FBO industry. "Fractionals have introduced more individuals to business aviation than was ever imagined - around 80% of their customers are concept buyers who, in the past, would never have imag ined owning or maybe even chartering an air craft", Van Allen says. Fractional ownership's knock-on effect, dri ven in the main by four US-based programmes, has been startling. Last year, fractional pioneer and market leader Executive Jet, which operates nearly 3 00 aircraft worldwide in its Netjets fleet purchased 40 million USgal (151 million litres) of jet fuel; 325,000 maintenance hours; 2 3,000h of charter; $6 million of catering; arranged 25,000 cars and limousines and flew to 1,250 airports in the USA alone. Furthermore, a typ ical fractionally owned aircraft flies around 1,2 OOh a year - nearly four times higher than the average business aircraft. James Hayes, founder and chief executive of aviation consultancy The Aviation Group, believes fractionals have helped improve busi ness aircraft's negative image. "Although the aircraft were regarded by some as business tools as early as the 1960s, they never really gained acceptance among the corporate community until the last decade. Businesses are now realis ing the time and, often, cost-saving benefit which a business aircraft can bring." This view is supported by the US Federal Aviation Administration Aerospace Forecast for 2000 to 2011. It predicts average general avi ation jet-powered aircraft utilisation will be around 525h a year in 2011, compared with 380hinl999and250hinl991. Van Allen concedes: "The growth in business aviation has brought about a radical change in the service offered by FBOs. Gone are the days, no less than 20 years ago, when the companies provided only fuel and handling. We now have to offer a diversified and impeccable service, including everything from maintenance to meeting rooms." A recent study by US consult ing firm Aviation Resources Group indicates that customer service - and not the price of fuel - is the main consideration for pilots when choosing an FBO. This has intensified compe tition between companies, particularly those based at the same airport, which compete on the basis of services and amenities. Showalter concedes that the current climate, while bringing new opportunities for her FBO, has also forced a change in company ethos at Showalter Aviation. "We were initially just a weekend business providing fuel and hangarage for the leisure and private flyer. While we con tinue to service the light aircraft market, an increasing amount of our revenue comes from the business aircraft market." She adds: "These customers often require top quality services without excuses or delays. If this requires wash ing a customer's aircraft in the middle of the night, we will do it. If you say 'no', they will go elsewhere". As well as the traditional aircraft handling and fuelling services, the typical FBO offers a cor- FLIGHT INTERNATIONAL 16 - 22 May 2000 35
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