GAO Report Examines FBO Pricing

 - November 27, 2019, 10:57 AM

A new report from the U.S. Government Accountability Office (GAO) to the House Committee on Transportation and Infrastructure on pricing of aviation services found that FBO pricing depends on many variables. According to the results from interviews with industry stakeholders, the GAO found that an FBO's costs to build and maintain facilities such as hangars and fuel farms, as well as operating costs, seasonal demand, and competition, influence pricing.

While some aviation groups, spearheaded by AOPA, have called for greater transparency of prices, the GAO developed a statistical model to analyze variation in fuel prices across airports in the contiguous U.S. in response to a request to examine FBO pricing and the FAA’s oversight of related airport grant assurances. Since 2007, the agency has doled out more than $37 billion in grants to airports to fund capital development and is responsible for ensuring compliance with requirements, including providing airport users equal access to airport services such as fueling.

The GAO statistical model confirmed a correlation between cost and demand factors and found higher prices at airports with higher cost and demand. While on-airport competition could result in lower prices at busy airports, the agency noted not all airports can support more than one FBO. According to the report, FBO pricing has not been identified as a widespread area of concern.