FBO Survey 2010: The rest of the world
As with most segments of the business aviation industry, the FBO business has been in a state of flux for the past two years. From the economic high and subsequent crash in 2008, to the slow but steady recovery over the past year, FBOs around the world have had to adjust and respond to the changing market conditions.
The good news, however, is that the market is indeed recovering, and many FBOs are reporting an increase in business. Tag Farnborough, for example, saw an 11- percent drop in business between 2008 and last year, but the number of movements in February and March of this year increased 5 percent over last year’s levels. Chief executive Brandon O’Reilly excluded figures from January, which were “severely impacted by the adverse weather conditions.”
Similarly, Tag Geneva also saw a decrease, from 20,926 movements in 2008 to 18,589 last year. “Since May 2009 it’s been picking up, and we’re now averaging 50 to 60 movements per day,” said handling manager Erturk Yildiz. “So the numbers are improving and increasing.”
Even with the drop in numbers, however, Tag retained a 50-percent share of the Geneva market. “We didn’t lose those movements because we were bad; we lost them because the economy was bad,” Yildiz said. “If we went from 50 percent of the market share to 30 percent, then we would have a problem. Then I would worry.”
Signature Flight Support, which dominated the 2010 FBO Survey with eight facilities among the 29 that qualified for inclusion, also took a hit. According to the FBO’s parent company, BBA Aviation, the “substantial declines” in the business and GA markets in the U.S. and Europe resulted in a 7-percent loss of organic revenue among the FBOs. Signature was also forced to cut 345 jobs.
However, the effect on the European market was much less than that in the U.S.; in fact, revenue among the European FBOs remained flat throughout the downturn. And in the BBA 2009 final results, released in February, the company said it saw “preliminary indications that [it was] through the worst of the downturn.”
“The industry has come through a cyclical downturn,” said chief commercial officer David Best, who previously served as managing director for Europe, the Middle East, Africa and Asia. “But I think we’ve had a particularly resilient performance throughout this cycle. Good strong operators with high standards will always come through.”
Sean Rafferty, managing director of Universal Aviation UK, said the Stansted Airport-based FBO “saw the same dip as everyone else.” The number of movements has increased slightly over the past three or four months, however. “But it’s not a rapid recovery,” he said. “And I think it will take some time to get back to the levels of a couple of years ago.”
On the flip side, the Universal Aviation FBO at Le Bourget Airport actually saw an increase in business. “We’ve seen an increase, even though the airport saw a decrease in traffic,” said managing director Sandrine Jackson. “We closed our books in June with a 10-percent increase in traffic, and to date we are up by 12 percent this year [compared with the same period last year].”
Eccelsa General Aviation, located at Olbia Costa Smerelda Airport in Sardinia, saw only a “slight” decrease, according to the manager, Francesco Cossu. He attributed the relatively stable numbers to the fact that the FBO has no business aviation competitors. “An important consideration is the number of FBOs an airport has,” Cossu said. “If there are too many, an FBO might find it difficult to survive.”
In addition, Olbia is a luxury destination and generally sees 200 movements per day during the summer months. “Other FBOs in Italy and Europe experienced a reduction in business,” he said, “but we were lucky. During the summer, the busiest time of the year, we didn’t have any problems.”
On the other hand, ExecuJet Switzerland/Aviation Ground Services experienced a 20-percent drop in business. It was hardly the only one, however. A number of FBOs reported similar decreases in the 2009 FBO Survey.
Fortunately, the FBO has seen an increase over the past few months. “Business has been picking up since December,” said Nicole Gut, director for European FBOs. The increase is due, in part, to the World Economic Forum, held every January in Davos-Klosters, Switzerland, which provides a surge in business at the beginning of the year.
And lastly, Jet Aviation also saw a decrease and then a subsequent recovery. “We had the same experiences as everyone else,” said Frank Kusserow, director of FBO Services for Europe, the Middle East, Africa and Asia. “Europe had the largest drop in traffic figures, while the Middle East and Asia remained stable. They even had some growth.”