Europe’s FBOs are feeling the financial pinch as business aviation traffic dips in response to the continuing economic crisis. Most have seen a relatively steep downturn in traffic beginning last September/October. The smallest decline in traffic over the past six months reported to EBACE Convention News has been around 3 percent, but quite a few bases have seen month-on-month declines of just above 20 percent.
Opinion among FBO managers is divided between optimists who believe this is just a temporary blip and pessimists who are convinced that things will get worse before they get better, and believe it could take at least until the middle of this year to be able to ascertain where the bottom of the downturn lies.
At the same time, many FBO managers feel commercial aircraft operators and charter brokers have become more sensitive to the cost of handling services and are shopping among FBOs to get reduced prices. Several also reported significant problems with slow paying customers and indicated that the creditworthiness of some clients has become a much bigger consideration against the backdrop of several bankruptcies among operators.
Interestingly, there was a lot of consensus among FBO managers as to the priorities for riding out the recession. Most felt that it is misguided to try to cut staffing costs and look for ways to cut corners on service standards. Many FBOs are still eager to retain experienced specialist staff in a bid to compete on service quality and value, rather than getting involved in price wars.
In Europe, FBOs are having to contend with demanding new requirements such as security screening and sometimes maddening restrictions on issues like aircraft parking. These mean that managers are having to invest in training to ensure that staff can deal with these obstacles in a way that does not inconvenience business aircraft operators and their passengers.
Each year, Aviation International News (sister publication to EBACE Convention News) conducts an extensive survey of how operators rate FBOs around the world. In the 2009 survey, once again, half a dozen large, well-funded companies have completely dominated the rankings. But there is still some room for a few feisty independents who have caught the eye of the only people whose opinions matter: the customers.
And once again, European FBOs have dominated the international rankings. Only five of the Top 40 FBOs and one of the Top 10 came from outside Europe (the Middle East, Asia and Africa).
TAG Aviation (Booth No. 651) has only three FBOs, but two of them have made their way into the top five in the AIN rankings. TAG Farnborough is the number-one ranked FBO for the third year running and TAG Geneva is number five. At Farnborough, the company has just started a campaign to increase the number of movements permitted each year from 28,000 to 50,000.
The global Jet Aviation group (Booth No. 1163) accounts for one in five of the AIN Top 40 and two of its eight FBOs have made the Top 10: Dusseldorf, number seven and London Biggin Hill just behind it at number eight. The other six bases are Geneva, Dubai, Basel, Zurich, Beijing and Jeddah.
Signature Flight Support (Booth No. 7040) has seven of its bases in the Top 40. They include the Hong Kong Business Aviation Center (in which it is a partner), which once again ran TAG Farnborough a close second, as well as its new base in Munich, Germany. The other five facilities from the Signature chain are London Luton, Paris Le Bourget, Toulon, London Heathrow and Athens.
Universal Weather & Aviation (Booth No. 643) has four spots among the Top 40 FBOs in the AIN survey, including its Paris Le Bourget operation, sharing the number-nine position, as well as London Stansted, Milan Linate and Rome Ciampino.
ExecuJet Aviation (Booth No. 354) accounts for three of the Top 40. Of these, its FBO at Switzerland’s Zurich Airport is ranked number three, followed by its bases at Johannesburg and Dubai.
Both of Harrods Aviation’s London FBOs have made the Top 40. Its Stansted operation holds the number-nine slot jointly, and the London Luton facility is also featured.
The other Top 10 FBOs in the AIN rankings are Grafair Jet Center in the Swedish capital Stockholm, and South Air in Keflavik, Iceland.
So, almost 60 percent of AIN’s Top 40 international FBOs are now owned and run by six companies–a fact that seems to lend weight to the view that recent years have seen significant market consolidation.
The rankings also reveal a distinct geographical concentration in terms of where the better-regarded FBOs can be found. Eight of the Top 40 for 2008 are in the UK, with five each being in Switzerland, Germany and France.
The special report on international FBOs can be found in the May edition of AIN. The April edition featured a special report and survey covering FBOs throughout the Americas, with the full base rankings listed online at www.ainonline.com.