Forecast Remains Optimistic For Increases In 2016

More than half the FBOs in the U.S. reported increased fuel sales in 2015 compared to 2014 according to Aviation Business Strategies Group (ABSG) Principals John Enticknap and Ron Jackson.

Citing their Annual FBO Industry Fuel Sales Survey completed earlier this month, Enticknap and Jackson said 54 percent of those responding reported an increase of at least 1 to 4 percent. Of these, 15 percent indicated an increase of 5 to 8 percent while 16 percent said they had more than an 8 percent increase.
 
Benchmarking past survey results, Enticknap and Jackson said that FBO fuel sales results have steadily improved over the past three years with 43 percent of FBOs reporting an increase in 2013 and 49 percent stating an increase for 2014.

“This is the first time since we started the survey that more than 50 percent of the respondents experienced an increase in fuel sales over the previous year," Enticknap said. “Although the benchmark numbers show a positive trend, nearly 30 percent of the FBOs participating in our recent survey had a decrease in sales. This is still a fractured marketplace that is showing some positive signs of recovery.”
 
According to Jackson, the outlook for 2016 remains optimistic with 58 percent of FBOs surveyed predicting an increase in fuel sales over the 2015 results. Of those, Jackson noted that 40 percent expect an increase of 1 to 4 percent with the remaining 18 percent forecasting an increase of at least 5 to 8 percent.
 
“Looking ahead, more than 90 percent of surveyed respondents said they expect to have the same or increased fuel sales this year compared to their 2015 results,” Jackson said. “If this forecast holds up, 2016 could prove to be a watershed year for the industry.”
 
 
In forecasting confidence in the economy, the survey respondents were divided on the question with 41 percent indicating the economy was not moving in the right direction, 27 percent saying it is and 32 percent undecided.
 
An added question to this year’s survey queried respondents regarding the growing trend of  transient aircraft customers not purchasing any fuel.
 
“Nearly half the respondents indicated that up to 40 percent of aircraft customers coming onto their ramp did not buy fuel,” Enticknap said. “With the current U.S. FBO business model relying on fuel sales to fund their operation, this is an alarming development.”
 
Enticknap said this trend is due in part to the practice of more flight departments tankering fuel from their home base through to their destination and then back. “Add to that the fact that newer turbine aircraft are more fuel efficient and don’t need to take on as much fuel as they used to. Therefore, it’s becoming more imperative that FBO operators charge customers a ramp fee as well as a fee for the use of their facility. As we teach in our NATA FBO Success Seminar, every customer must contribute to the revenue base in order to keep the operation viable.”

(Source: ABS Group news release)

FMI: www.ABSGgroup.com