European FBO Survey Report

 - May 17, 2008, 11:21 PM

European FBOs have once again scored highly in the annual survey of international FBOs conducted by Aviation International News (sister publication of EBACE Convention News). No fewer than eight of the Top Ten FBOs (outside the Americas) are in Europe. The Hong Kong Business Aviation Center (in second place) and Abu Dhabi-based Royal Jet (Booth No. 2225), which ranked fifth, rounded out the top 10 FBOs.

The TAG Aviation group (Booth No. 923) has had the most visible success, with two of its facilities in the Top Ten list. And two of the best FBOs in the world are right here in Geneva.

What makes AIN’s survey different from others in the industry is that the only people whose opinions count are those who actually use FBO services–primarily the pilots whose jobs take them from airport to airport and FBO to FBO. To further bolster the integrity of results, AIN has partnered with leading aviation data specialist Forecast International to manage the process.

TAG Aviation

Farnborough, UK (Survey Ranking #1)

TAG Aviation’s landmark facility at the London-area Farnborough Airport is–for the second consecutive year–the top-ranked FBO in the AIN international FBO survey. With the airport certain to hit its 28,000 annual movement limit this year–the facility is set to become Europe’s most exclusive as well as its most popular.

During 2007, the airport–which TAG owns–received 26,507 movements, which amounted to a 24-percent increase over the previous year. Even if this year shows a downturn in business aviation growth, it is now regarded as inevitable that Farnborough will hit the limit and will therefore not be able to accept more traffic.

Having recently won a protracted battle to increase movements on weekends (see box on page 25), TAG is about to start a campaign to raise its traffic limit. In the meantime, the company insists that its strong service ethos will in no way be undermined by the fact that it will effectively have to say “no” to prospective customers. “Knowing that for the time being we will have a finite amount of traffic to handle will allow us to plan better for it and so ensure that we can maintain our high standards of service,” said TAG Farnborough chief executive Brandon O’Reilly.

The Farnborough FBO’s eye-catching terminal building and adjoining hangars have fast established themselves as an icon of European business aviation. The company is now seeking approval to build three more sets of hangars to provide an additional 120,000 sq ft of covered aircraft parking space and offices for based operators.
Customer service manager Sophie Lesnoff has built a closely knit team who aim to provide the sort of uncompromising, bespoke level of service that guests in exclusive hotels are accustomed to. In fact, TAG is about to open its own hotel on site, mainly catering to visiting air crew. The Dakota Group will run the Aviator Hotel for the company.

In February, TAG took full freehold ownership of the 581-acre Farnborough site, having previously operated the airport under a 99-year lease from Britain’s Ministry of Defence. In 2007, TAG achieved its first operating profit on the Farnborough operation. The Geneva-based group is now considering opportunities to use its expertise to help develop FBOs in emerging business aviation markets, almost certainly in partnership with other companies.

Grafair Jet Center

Stockholm Bromma Airport
Sweden (Survey Ranking #3)

Stockholm Bromma Airport is primarily popular with business aircraft passengers and crew, being located just five miles from the center of the Swedish capital. Grafair Jet Center was established in 2004 by Bengt Grafstrom, who has had extensive business aviation interests in Florida for the past three decades and admits that U.S. FBO experience–with its strong emphasis on service–has had a profound influence on the way he runs Grafair.

Grafstrom said that to operate a genuine full-service FBO a company has to have full control over its ramp space and key services such as security and de-icing. In Europe, this cannot be taken for granted because many airports are either unwilling or unable to give an FBO this degree of autonomy.

“Most FBOs in Europe are lousy; to be honest, only a few are any good,” said Grafstrom, who also has experience as a consumer of handling services through the charter arm of Grafair, which operates three Cessna Citation IIs and Hawker 800. “But this is mainly due to the restrictions they have to accept, such as not having sufficient parking spaces or separate airside access.”

Grafair has been able to lease plenty of space from the Bromma management, including its own ramp and separate area for car parking. On this it has built a spacious executive terminal and an adjoining hangar. The company holds options on more land that would allow it to extend the ramp and add three of four more hangars.

“When an aircraft arrives, it is always met by at least one of our staff, there is always a red carpet, and it should take no more than 20 seconds for passengers to get into their taxi–including the time needed to check passports,” explained Grafstrom. The goal for departing flights is for passengers to spend no more than 30 seconds getting from their car to the aircraft cabin.

Passengers and crew who do want to linger longer will find creatively decorated lounges, with esoteric finishing touches such as a grand piano, a parrot, palm trees, an open fire and free ice cream for all visitors. The Swedish FBO also has dishwashing and fridges on site to complement its long-standing arrangement with a leading Stockholm restaurant to provide in-flight catering for visiting operators.

After experiencing delays in getting snow and ice cleared by the airport, Grafair quickly invested in its own equipment so as to be completely self-sufficient and avoid being the cause of delays for its operators. It also has its own tow-tugs and takes direct responsibility for moving aircraft to and from remote parking areas when this becomes necessary.

During 2007, Grafair handled all 2,000 business aircraft flights into Bromma. The airport has the capability to take more traffic between its set opening hours of 7 a.m. to 10 p.m. and subject to its weight limit of 50 tons (110,000 pounds).

Outside these hours, aircraft have to use Stockholm’s much more remote Arlanda Airport. Grafstrom has been in talks with the Arlanda management with a view to establishing a dedicated bizav handling operation there but he is concerned that the larger airport will not be able to assure him of sufficient flexibility and control over the necessary infrastructure. “There are often big delays there for business aircraft,” he said.

MES Handling

Munich
Germany (Survey Ranking #4)

MES Handling is a long-established FBO at Munich Airport that claims a market share of some 90 percent of business aviation traffic at Germany’s second major hub. The privately owned company has no plans to open other bases outside Germany.

However, last year, MES did open a new lounge in its facility at Oberpfaffenhofen Airport, which serves the southwest side of Munich. It is now preparing to upgrade its lounges in Munich’s General Aviation Terminal. The company also has just obtained a license to start operating its own limousine service to avoid having to rely on outside vendors.

Despite its already strong market share, MES has achieved an annual growth of 10 to 15 percent for the past eight years in line with the growing executive traffic at Munich. “We shall continuously strive to improve our offer still further; it is all a matter of service-oriented attitude,” commented FBO manager Oliver Trono when asked the secret of its success.

According to Trono, MES benefits from a good working relationship with an airport management that appreciates the importance of business aviation. Eurocontrol statistics show Munich to be one of Europe’s busiest airports for this category of traffic.

MES believes that business aviation will continue to grow in Europe over the next few years and it is ready to make further investments to share in this growth. The company has no plans to give up its independence, but believes that consolidation in the FBO market will continue, with larger groups taking over smaller units.   

Eccelsa Aviation

Olbia, Italy (Survey Ranking #6)

Eccelsa Aviation takes its name from the Italian word for excellence. It needs a big name to live up to because its fabulously opulent clientele–the rich and famous who flocked to Sardinia’s exclusive Costa Smerelda resort region–are demanding customers.

The FBO opened in 2003 and the privately owned company has already started construction for a new 43,000-sq-ft terminal. This will be more than double the size of its existing facility and will also have its own 25-acre ramp space to accommodate the rapid increase in business aircraft wanting to fly into Olbia–especially during the peak summer season. During July and August, Eccelsa is often receiving 160 movements each day and this can include widebody VIP transports such as Boeing 747s, for which it must buy dedicated ground support equipment.

 The new terminal will be completed this year, but Eccelsa will not relocate until after the summer season, which can extend up to early October. According to managing director Francesco Cossu, Eccelsa is investing around $30 million in the new FBO and expects it to be one of the best in Europe.

The new terminal will feature a large canopy to shield passengers and crew from the weather– an idea that Cossu picked up during visits to U.S. FBOs. This will be large enough to shelter Boeing Business Jets and will be the only one in Italy. Like the existing terminal, it will also feature exclusive stores selling designer eyewear, jewelry and watches, as well as local delicacies. 

Eccelsa Aviation’s greatest challenge is dealing with peaks and troughs in demand that see 80 percent of its business arrives during the summer months. “The danger is that you can lose good people who need more work than just the summer season,” explained Cossu. “The value of having the right people for our company is very high. Building a good team takes time so you don’t want to lose anyone.”

The FBO’s full staff is about 40 people. Eccelsa operates a staff rotation system so everyone gets about eight months of work over the course of the year.

Eccelsa is prepared to open FBOs at other locations if the right opportunities come along. Cossu said he has already had some discussions with prospective partners at airports on the Italian mainland.

The past five years have seen an enormous growth in traffic coming to the Costa Smerelda. The question is how much more this goldmine of high-net-worth tourism can take. Most hotels are full throughout the season, as is the marina and all the choice villas. Eccelsa is expecting to see further growth of between five and seven percent this year.

Cossu said his FBO’s goal is always to make an extremely good first impression on the passengers and crew he serves. “But we are always asking ourselves whether we are giving enough,” he added. The company has not increased handling prices for the past three years and has no plans to do so at least until 2009.

Eccelsa enjoys a good relationship with the Olbia Airport management, who clearly appreciate the prestige that the private jets bring to the area. But as Cossu considers the possibility of opening new businesses elsewhere, he is well aware that this is not the case everywhere.

“It is difficult to change the FBO business. The hardest thing is to make the airport authorities understand that private aviation needs to be treated differently and that the rules need to reflect this,” commented Cossu. “We need to encourage people to use private aviation and make it easier. This is changing, but I wish it was faster.”

Similarly, Eccelsa has faced a battle to get fuel suppliers to be more responsive to business aircraft operator’s need for fast turnarounds. They still tend to give priority to the airlines but the situation is improving.

“I am in the business because I believe it is a good business. It is worth the effort,” concluded Cossu. “We have to fight against costs; the bottomline has to stay black and this is hard in a seasonal place.”

Universal Aviation

London Stansted, UK
(Survey Ranking #7)

Universal Aviation’s base at Stansted Airport is never going to win any architecture awards, but its prize assets are almost certainly of much greater value to the business aircraft crews and their passengers: extraordinary operational knowledge and an uncompromising culture of customer service. The group is first and foremost a trip support specialist and prides itself on taking a completely holistic approach to making all aspects of a flight go well.

“We aim to do just about everything other than fly the airplane,” said Sean Rafferty, managing director of Universal Aviation UK. As with Universal’s trip planning teams worldwide (some 60 sites in total), the goal is to help operators to circumvent the many potential pitfalls that await business aircraft operators in terms of access and logistical problems. There are few more challenging environments than the crowded London area, where all airports are now subject to restrictions and complex operational issues.

Operating business aircraft globally is getting increasingly complex because of factors such as changing requirements for customs, immigration and security screening. “Quite simply, operators need to select the right FBO to help them cope with all these issues. It is too complex for them to do their own handling,” maintained Rafferty.

“Our people, culture and training are the keys to us being able to get customers exactly what they want, and indeed to exceed their expectations,” said Rafferty. “They can benefit from full access to the Universal database and the secret of success for us is making it appear to the customer as if we have done nothing at all to make the trip a success.”

The starting point for making Universal’s service delivery seem this seamless is to anticipate all possible issues with a trip, and this can come only from years of experience and a genuine desire to put yourself in the clients’ shoes. “Anticipation is everything and this means engaging with clients as early as possible to truly understand what matters to them and their different ways of working,” explained Rafferty. “We believe that we get so much repeat business because we take so much time to get to know clients’ operations and to build our relationships.”

Universal’s reward has been a 50-percent growth in its handling business at Stansted during 2007– generated both from rising levels of traffic and claimed increase in local market share. It competes with Harrods Aviation and Inflite at Stansted.

In addition to passenger and crew lounges, Universal Stansted now offers a crew business center and this gets heavy usage with pilots increasingly dependent on high-speed Internet access and flight planning databases. The FBO has been approved to the safety standards for handling set by the U.S. National Air Transportation Association and it claims to be the only UK facility to hold this approval.

The Stansted site is also home to Universal’s European operations center, which offers trip planning services to Europe-based operators traveling within the region (in tandem with the group’s main trip planning center in Houston). The company is aiming to extend the geographical reach of the European center. Out of a total staff of 40 people employed at Stansted, about 12 are dedicated to handling and another 12 to the European operations center, and these numbers are set to rise.

Universal (Booth No. 337) is also investing in more ground equipment to make it fully responsive to growing demand for handling, including from VVIP widebody aircraft operated by various head-of-state flight departments.

Service People

Hamburg, Germany (Survey Ranking #8)

Service People of Hamburg is an independent FBO set up in 1988 by Barbara Loehnert and her brother Knud. At the time, both were working in the main part of Hamburg Airport and noticed that services provided by the airport for visiting executive aircraft left a lot to be desired. This prompted them to set up their own company to fill the gap and their venture has proved successful, with repeated triumphs in AIN surveys against much larger facilities. In their 20 years of operation, airport facilities have improved for Service People and its customers, including the addition of a dedicated executive terminal 15 years ago.

Service People is no longer the only FBO at Hamburg. Business traffic has been increasing steadily after a dip in 2001, and space is getting scarce in the general aviation enclave, mainly because more stringent security rules require additional space. These new requirements may also lead to landing and handling price increases.

On the other hand, ramp space is adequate and the FBO has rented additional parking space for customer cars and has also created a summer garden to complement its passenger and pilot lounges.

Based on their own experience, the Loehnert family believes that locally based FBOs provide the best service. “We have our roots here and know everybody at the airport,” noted Barbara Loehnert. Based on that philosophy, Service People’s owners have no ambitions to expand to other airports, but do believe there is more business to be had at Hamburg International, which is the only large airport of the area.

The only significant criticism Loehnert has of her base airport is that the established fuel suppliers do not face enough competition and that this does not help to exert downward pressure on the price. Generally speaking, the airport still seems to prefer airliners with plenty of fee-paying passengers to executive traffic.

TAG Aviation

Geneva, Switzerland (Survey Ranking #9)

Eturk Yildiz, handling manager at TAG Aviation Geneva, is an old hand in the business, having previously worked for Aeroleasing in the 1980s. Geneva Airport has enjoyed strong growth of business aviation traffic over the past five years, with its share of total traffic at the airport having risen over this period from around 20 to 30 percent. There are now an average of 48 bizav movements each day at the airport, shared between four licensed handlers–TAG Aviation, Jet Aviation, Ruag (formerly Transairco), and PrivatePort. Competition among them is stiff, but relations are friendly, as they also are suppliers and customers of each other for various equipment and services.

TAG and Jet Aviation rent their facilities in a dedicated executive terminal built by PrivatAir on airport land in 2003 at the southern end of Geneva’s single Runway 05/23, and all three share a common customs and border police checkpoint. Ruag is located on the West side of the runway.

Yildiz pointed out that the 40-percent share of total business aviation handling claimed by his company would quickly shrink with decreasing customer satisfaction.
“Our customers are loyal and will forgive us an occasional mistake, but we cannot hide from them that we have able competitors right next to our facilities. Our neighbors would only be too happy to take over our dissatisfied customers,” he acknowledged. He believes that the main reasons for customers to stay with his company are good service, trust and appropriate facilities.

The TAG Geneva FBO’s customer base is comprised of about one third of aircraft managed on a worldwide basis by the company and two thirds of visiting aircraft of operators not connected to TAG. Based on his personal experience from work at other airports, Yildiz considers that service levels at Geneva are among the best in Europe, both for services provided by the airport and by handlers, and relations with the airport are excellent. However, he echoed the common complaint of European FBO managers that fuel suppliers are not sufficiently responsive to their operators’ needs, preferring to focus on the airlines.

Investing in further growth, last year TAG acquired a large de-icing truck. “If we have our own equipment, we are sure to have it available when needed for our customers,” explained Yildiz. The company owns other heavy ground equipment at Geneva airport, like tractors and GPUs for large aircraft, and the TAG maintenance shop, located next to the handling facility, can provide line maintenance for operators as required. TAG subcontracts only a few of the services its offers, such as catering.

Looking to the future, Yildiz predicted that TAG will expand into new markets in Russia and Asia. He believes that despite increased consolidation among large FBO groups, there will be room for competition, including from small independent handlers.

Jet Aviation

Geneva, Switzerland (Survey Ranking #10)

Jet Aviation has been present at Geneva Airport for more than three decades. The FBO currently employs well over 100 staff in both maintenance and executive handling activities. The handling is based in modern facilities in the airport’s C3 executive terminal, but manager Bernard Ratsira pointed out that, above all, customers want streamlined service and efficient solutions for any occurring problem rather than long waits in lavish lounges.

That said, Jet Aviation offers both customer and pilot lounges with Internet connections, bathrooms with showers for passengers wishing to freshen up after a long flight and a conference room free of charge for visitors preferring a short meeting at the airport with their business partners to a longer stay in Switzerland.
The FBO’s amenities also include flight planning and dispatch, limousine service, valet parking and hotel reservations. Jet Aviation shares customs and border police services of the Terminal C3 with TAG and PrivatPort.

Jet Aviation (Booth No. 1147) operates a large worldwide fleet of managed executive aircraft, but Ratsira noted that aircraft handled by the Geneva FBO are mostly visitors not related to the company’s own flight operations. The fact that the group has a large maintenance shop at Geneva may influence the choice of the FBO in some cases.

The company also has good relations with charter brokers, many of whom reportedly recommend Jet Aviation to their customers, but Ratsira is convinced that good service, trust and personal relations with pilots are the main motives in the choice of an FBO. “Of the 21 people we employ in our FBO, 70 percent have been with Jet Aviation for more than ten years. So we know our customers, and they know us,” he concluded.

Full details of the international FBO survey can be found in the May 2008 edition of Aviation International News. This issue also features a special report on the international FBO business. The AIN survey of North American FBOs can be found in the April 2008 edition.   

Decision on Farnborough Movements Could Be a Breakthrough for UK Bizav

After several years of local and national debate and a full-blown public inquiry, the UK government has finally approved an increase in weekend movements at the London-area Farnborough Airport. On March 13, TAG Aviation, operator of the airport, won its appeal against an earlier local government decision not to allow an increase from 2,500 to 5,000 movements on weekends and on public holidays.

The ruling, made jointly by the Secretaries of State at the Department of Transport and the Department of Communities and Local Government, came almost a full year after the end of a public inquiry into the issue. Importantly, the grounds for granting TAG’s appeal draw strongly on recent central government aviation policy that favors increased business aviation traffic at airports like Farnborough.

TAG believes the ruling could strengthen its case for having the overall annual limit of 28,000 movements increased. It intends to start preparing the case for doing this with a new long-term master plan for the privately owned airport, which it wants to publish by the end of this year. This will outline how the company intends to deal with issues such as aircraft noise, pollution and road access to the site. Technically, Farnborough could handle at least 100,000 movements each year, but TAG does not expect to get approval for that number.

Crucially, the central government decision places considerable weight on recent white papers dealing with airport capacity, suggesting that national aviation policy might be brought to bear in future applications to increase traffic to counter-balance to local planning policy. The March 13 ruling said that the two Secretaries of State, “have had regard to the fact that the AWP [Future of Air Transport White Paper, December 2003] emphasizes the need to make the best use of existing capacity of the UK’s airports before supporting the provision of additional capacity.” The ruling also highlighted, “the important role of the smaller airports in the southeast [of England] in helping to relieve pressure on the main airports before a new runway in the southeast is built.”

In preparing a new master plan for Farnborough as part of a bid to increase total annual movements, TAG’s legal team is likely to seize on the key phrase “best use of existing capacity.” The British government is currently facing strong opposition to plans to build new runways at London’s Heathrow and Stansted airports. By shifting business aviation traffic to airports such as Farnborough, it would be able to demonstrate that it is using other options to increase overall capacity.

According to TAG Farnborough chief executive Brandon O’Reilly, the company has spent a lot of time engaging with local residents’ associations to try to allay concerns about traffic growth at the airport. These discussions have included TAG’s pilots and air traffic controllers from the airport.

Over the past two years, its Quiet Flying program has taken steps to alter flight patterns to reduce residents’ exposure to noise. It is now starting an experiment to cut noise over the nearby communities of Fleet and Church Crookham by having departing aircraft that are heading south, turn 20 degrees left once they reach 500 feet.

TAG is seeking approval to build three more sets of hangars to provide an additional 120,000 sq ft of covered aircraft parking space and offices for based operators. Some 50 aircraft are based at Farnborough and they often fill the existing 270,000 sq ft of hangars to capacity. By the time the new hangars are added, TAG’s investment in Farnborough will total approximately $360 million.

Plenty of A-List celebrities fly through Farnborough but the British airport is set to get a serious dusting of Hollywood glitz when it features in the new James Bond movie Quantum of Solace, which is set for release in November. During January, TAG Aviation’s Farnborough facilities were used for two days of filming that saw several chartered business jets brought in to be used in action sequences.

It is not yet clear exactly what the aviation angle will be in the new 007 film, but it is known that Ukrainian actress Olga Kurylenko–who stars alongside leading actor Daniel Craig– has been taking skydiving lessons as part of her preparation for the role as one of two “Bond girls.” Quantum of Solace is a sequel to the 2006 Bond movie Casino Royale.

Farnborough Airport is increasingly being booked as a venue for filming and also for high-profile product launches. This is part of TAG’s marketing strategy of generating new revenue streams as it contends with the prospect of hitting its movement limit this year.