2013 AIN FBO Survey - International
At face value, the current state of the global FBO sector is fairly easy to summarize: growth uncertainty, tight margins and blocked opportunities present challenges. Outside the Americas, Europe remains at best flat in terms of traffic volumes, while markets such as Asia and Africa continue to see strong growth. The Middle East is somewhere in the middle.
So market conditions amount to a mix of challenging times in which costs in some locales continue to rise, further squeezing profits, and extraordinary opportunity presents itself in other places. This background suggests that business aviation handling companies would be retrenching in mature markets such as Europe and feverishly expanding in the new territories. But the reality belies the obvious, and so we find a paradox in which no fewer than eight FBOs continue to battle it out for declining traffic at Paris Le Bourget Airport (with rumors of more market entrants to come). Similarly, up the road in London, there are now five FBOs scrapping it out at the UK capital’s Stansted Airport alone, with operators having plentiful alternatives at some half dozen airports with almost two dozen FBOs around the metropolitan area.
By contrast, in the huge and growing economies of China and India, the total number of real, dedicated FBOs can still be counted on one hand. So does the FBO industry lack imagination and business acumen, or are there valid reasons for this imbalance?
To try to make sense of the apparent contradictions, AIN quizzed a broad cross-section of FBO leaders and flight-planning and support experts. There was clear consensus that while FBO costs are rising, competitive pressures for the most part prevent increases in handling fees, leaving profit margins squeezed across the board. But everyone concluded that this is still a good business to be in.
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