Independent op Partners with Signature as manager

 - October 27, 2010, 7:33 AM

With the addition of its newest facility at California’s Fresno Yosemite International Airport, Signature Flight Support is embarking on a new way to operate FBOs–a management contract with the owner of the facility. Given that many major hotel chains are operated this way, it’s perhaps a little surprising that large FBO chains haven’t already tried this method. For Signature parent BBA Aviation, the Fresno FBO is the first to be operated in this way, but the company is open to the ­opportunity to do more deals like this, according to president Michael Scheeringa.

The idea of managing FBOs owned by other entities isn’t new; Wilson Air Center already does this at its Charlotte, N.C. location, but that facility is owned by the airport, not a private company. In Fresno, what became Signature’s newest FBO began as an FBO called Scott Aircraft, but that facility was taken over by a bank ­during the downturn. David McDonald, former CEO of Pelco, owns a Gulfstream G550, which is operated under McDonald Aviation and available for charter through Executive Jet Management. McDonald’s G550 was hangared at Scott Aviation, and he bought the facility in April.

“We went top to bottom through the whole property,” said McDonald, “to make it just like a Signature.” McDonald had seen plenty of FBOs during his travels and always appreciated Signature facilities. Instead of launching an independent FBO and trying to build market share and making the facility pay for itself, he decided to contact Signature to see if the FBO company might be interested in managing his facility.

When he first called Signature and spoke to chief commercial officer David Best and Patrick Sniffen, vice president of marketing, McDonald outlined his situation and was happy that they didn’t hang up the phone but took him seriously. “I said, ‘This ­story’s going to sound a little odd, but I’ve got an FBO that’s not operating in Fresno. We’re refurbishing it. I’ve got a G550 that’s kept there, and it would be an ideal mid-market location for Signature because of the competitive situation in Fresno.’”

Typical Signature Amenities
The FBO opened under the Signature brand name on September 15, and a grand-opening ceremony was held on September 29. Fresno mayor Ashley Swearingen welcomed the celebrants and said, “We’re so honored to have Signature Fresno Yosemite International as its 103rd location.”

Signature Fresno is managed by Justin Zaklan. The facility consists of a 40,800-sq-ft hangar, the largest hangar between Stockton and Southern California, with 28-foot-high doors to accommodate G550-size airplanes. Hangar space is available, with offices in the 6,100-sq-ft FBO terminal building next door. The crew lounge features new touch-screen computers and two sleep rooms with fully reclining sleeper chairs.

A neat feature of the FBO is the welcoming covered patio on the ramp side, with outdoor tables well protected from the warm Fresno sun and with a view of the Sierra Nevada Mountains. The passenger lounge offers comfortable chairs and tables as well as Signature’s standard fresh popcorn, Starbucks coffee and Otis Spunkmeyer cookies. Because Fresno is in the heart of California’s agricultural San Joaquin Valley, the Fresno Signature has a fridge full of crunchy ripe green and red grapes for customers.

At the time of the Fresno grand opening, Signature had enjoyed its 25th consecutive month of outperforming the FBO industry, according to Scheeringa. While he is happy with that performance, he added, “I share the concern of the entire industry on the rate of recovery.” Over the summer, the relative improvement that was under way began subsiding. “And now,” he said, “people are waiting for the fall to say, ‘Is business really coming back or are they still sitting on the sidelines?’”

“What corporate America needs to do with their aviation [assets] is to ignore some of the political correctness that’s flying around,” said McDonald. “The time that it saves is incredibly valuable.”

Makes a Lot of Sense
There are pockets of activity in the U.S., where Signature is seeing plenty of business, according to Scheeringa. “We have almost one in ten business jets in our hangars. At certain locations there’s actually pretty robust travel. If you’ve been to Teterboro recently, [you’ve seen] the ramps are full. There were days in September where we said there’s no more room. That’s a good sign.”

As for the opportunity that managing a facility like Fresno brings, Scheeringa said, “We have an open mind as to what the future of FBOs looks like. There are a lot of people putting a lot of capital into the business, and that includes Signature. We see an opportunity to maximize the return of not only our own capital but also the capital of other partners for the economic benefit of a community, with an FBO at an airport. In this case, when you have a five-star facility that used to be a corporate hangar reoriented to be a commercial FBO, [this arrangement] made a lot more sense than constructing a brand-new facility.”