COVERING NORTH, SOUTH & CENTRAL AMERICA PLUS U.S. TERRITORIES AND THE CARIBBEAN Service St rs FBO chains are growing again SPECIAL REPORT INSIDE Las Vegas builds on Henderson’s role as GA reliever page 26 Good and bad FBOs page 31 FBOs lure pilots with amenities page 33 Business Jet Center by Matt Thurber t seems that not a week goes by negative to building a huge chain of FBOs. in the U.S., was also subject to the CFIUS brand name. Encore president and CEO without an FBO company an- But time will tell if these are short-term approval process, and the sale went for- Dan Bucaro is CEO of the new Landmark nouncing either the acquisition of successful businesses or another step on ward without objection. None of the politi- Aviation. Most of the current Encore/Land- more FBOs or a one-FBO com- the road to building national networks of cians who had been so vociferous about mark leadership helped form the Trajen pany buying half a dozen more aviation service businesses. DP World raised any concerns, at least in chain, which was swallowed up by Mer- IFBOs to establish its own growing chain. public, about DAE and Landmark. DAE, cury Air Centers, which in turn was pur- Witness, for example, Volo Aviation’s rapid Encore and Landmark which is partially owned by Dubai’s gov- chased by Atlantic Aviation. accumulation of five bases, when just last Dubai Aerospace Enterprise made no ernment, went forward with its plans to sell year the company had one FBO to supple- secret of its plan to sell the FBO business the Landmark FBOs and last November Signature Flight Support ment its primary charter business. See also that it acquired as part of the $1.8 billion announced that it signed a definitive agree- The Signature FBO chain owned by BBA Encore FBO’s move into the European purchase of Landmark Aviation and ment for Encore FBO to acquire DAE’s Aviation continues to grow and still has the market following the purchase of the Land- Standard Aero from private equity firm Airport Services Group, which included most non-U.S. FBOs of any of the FBO net- mark Aviation FBOs, charter and sales The Carlyle Group. What is not known is the Landmark FBOs, charter operations works and the most FBOs overall. Last year, businesses from DAE Aerospace. The lat- whether DAE’s owners really wanted to and some other businesses for $436 mil- Signature bought four Executive Beechcraft est surprise, at least as this was being writ- sell the FBOs or if they were doing so to lion. The deal closed on February 29. En- FBOs but decided to operate them under ten in late February, was Signature Flight avoid scrutiny from security-conscious core is backed by private-equity firm their original brand name instead of absorb- Support’s announcement of intent to buy politicians. GTCR Golder Rauner. ing them into the Signature network. Hawker Beechcraft’s FBOs (but not the This would not be the first time that for- The Encore name, it turned out, was Signature made a bigger move on Febru- maintenance operations). eign ownership has attracted the attention short-lived, and after completing the trans- ary 22 when Hawker Beechcraft announced Given the frothy activity in the FBO of those in Washington. When DP World action, Encore adopted the Landmark that it planned to sell its fuel and line marketplace, we thought it would be inter- announced plans to buy marine terminal esting to take a snapshot of the chain struc- operating company P&O in February 2006, ture and list all the FBO companies that a political firestorm ensued. DP World is own three or more FBOs and those FBO wholly owned by the government of Dubai, locations. We fully expect this list to and U.S. politicians were concerned about change; next year either these companies the security implications of foreign owner- will own even more FBOs or the organiza- ship of marine terminal operations in the tions that provide the money for acquisi- U.S., which in fact were already owned by tions will have decided that the business foreign-owned P&O. When the politicians isn’t as lucrative as they had thought. viewed a U.S. Coast Guard intelligence One thing is for sure, however: the rapid analysis about the proposed DP World buy recent growth of FBO chains has no prece- of P&O, they used that information to bol- dent. Earlier attempts to build chains never ster their case. DP World, however, had saw companies owning as many FBOs as already submitted to scrutiny by the U.S. some of these companies do now. Treasury Department’s Committee on For- Finally, is there some number of FBOs eign Investment in the United States that is simply too hard for a company to (CFIUS), which approved the deal. handle? So far, the overall number of The DAE purchase of Landmark Avia- FBOs owned hasn’t slowed any of these tion, which consisted of multiple FBOs companies, so there doesn’t appear to be a and maintenance facilities at major airports Atlantic Aviation 20 Aviation International News • April 2008 • www.ainonline.com Survey Methodology The annual AIN FBO survey is now in its second year with an online-only ballot form, and AIN has conducted the Survey of American FBOs 21 times thus far, soliciting readers’ opinions about FBOs that they visited during the previous year. For the 2008 FBO Survey, AIN sent a postcard inviting 14,781 subscribers to complete the online survey form and e-mailed invitations to 11,151 subscribers. As always, for statistical purposes at least 40 ratings are required for a U.S. FBO to be listed in the final results, or 25 for non-U.S. FBOs. The AIN FBO Survey asks readers to rate FBOs that they frequent in four key categories: line service, passenger amenities; pilot amenities and services; and facilities. For each of the four categories, the survey participant can assign a number from one to 10, one being worst and 10 the highest rating. To arrive at the averages for the categories, each FBO’s ratings for each of the four categories are added, and the resulting sum is divided by the number of responses received for that FBO. The overall average for that FBO is com- puted by adding the FBO’s four category scores and dividing that sum by the total number of responses received in all four categories. AIN received 1,963 properly completed survey returns, for a return rate of 13.3 percent, down from last year’s 22.6 percent and 2,634 completed sur- veys. According to Forecast International, which designed and administered the survey in collaboration with AIN, “This response is still a quite valid basis Tac Air Denver for determining subscriber opinion.” Readers provided a total of 33,725 evaluations for facilities worldwide and added 185 via write-in opinions. A total of 2,074 respondents responded to service operations (but not the as- that now is a good time to be an nesses. “The Trajen guys made sociated maintenance service cen- FBO seller, and that’s not just be- out handsomely by buying lots of the survey (some did not complete the survey) and rated an average of 16 ters) to BBA Aviation for $128.5 cause he is constantly on the look- FBOs previously,” he said, includ- FBOs each, one more than during the 2007 survey. million. Hawker Beechcraft had out for opportunities to buy more ing smaller secondary-market fa- This year, AIN expanded the number of FBOs on the ballot to a total of earlier announced plans to sell the FBOs. In early February, Ross cilities. “At the end of the day, 1,420 facilities and service providers, up from 1,404 last year. Each year, AIN FBO network to focus on building Aviation purchased a majority they were rewarded for doing so.” will add FBOs and facilities that are seeing increased traffic from AIN readers, its core service center operations, share of Miami Executive Aviation While there are many buyers based on previous years’ write-ins. More rest-of-world facilities will be added which were a better fit with the at Opa Locka Airport in Miami. seeking FBO properties and not every year because more AIN readers are traveling internationally. Hawker Beechcraft manufactur- Ross Aviation owns jetCenter- that many desirable FBOs on the The results of the 2008 survey show some interesting moves up and down ing business. The transaction branded FBOs and other facilities market, the recent economic the list of the Americas’ 40 top-rated FBOs. Wilson Air Center’s Memphis, should close next month and will that retain their original brand. tremors are causing a slowdown Tenn. base remains at the top of the list, and the FBO’s rating even climbed bring BBA’s total roster of FBOs At Miami Executive, as at the in acquisitions, according to above the 9.00 mark, to 9.03. The facility is the only Americas FBO to garner a to 115 facilities, easily the largest other FBOs that Ross purchases, Ross. “There is ongoing consoli- rating above 9.00. FBO holdings of any company. the existing management stays in dation but the question is, how Pentastar Aviation/Million Air Pontiac moved into second place from last Signature did sell one FBO place, so Fabio Alexander and his small of an FBO will be qualified year’s third-place position, displacing perennial favorite AirFlite, which slid to last year, its facility in Oxnard, team will continue running the for that consolidation program?” third place.