Wise FBO Hangar Management Continued from page 29 perhaps, the hardest because busi- ness rules are just that—steadfast and unwavering. They are meant to create internal standardization and accountability. They must also be crafted carefully, as every time an FBO breaks its own business rules a new precedent is created, unpub- lished expectations are set, and tribal knowledge again begins to creep in. Moreover, the creation of business rules involves a serious deliberation— a gut check—for these rules will es- tablish the business model of the FBO as it pertains to hangar subleasing. This critical-thinking exercise goes far deeper than calling the competitor or a nearby airport to determine what they are charging for hangar space. In fact, very little of it has to do with the hangar sublease pricing model at all. One example of a business rule may be whether or not sublessees are permitted to move their own air- craft? If the answer is yes, and if the sublessee is in a common-use storage hangar, then who is responsible for ensuring a clear path of movement? Is the FBO providing wingwalkers in this situation? Or is the sublessee? To be sure, the rabbit hole of this busi- ness rule question goes much deeper, and includes insurance considerations and training, among other topics. Another business rule, one per- haps relating more to the revenue model is utilities. If certain basic utilities such as electrical and wa- ter are included by the FBO, are they built into the hangar price? Or are they a separate monthly fee? If separate, is it a flat fee, or a pro rata share? If it is a flat fee, is it adjusted annually? If it is a pro rata share, is it separately metered or simply calculated by square footage? These two examples are the tip of the iceberg, and many more questions must be asked, answered and codi- fied. To do otherwise is subleasing in a manner that is something less than intentional. While the number of business rules to be considered varies, creating the complete set has a singular purpose. Collectively, they will inform the provisions that are drafted into the eventual hangar sublease agreement. A Process Important though such delib- erations may be, these are merely the earliest steps in creating a real process for hangar subleasing. Still to come is the creation of the sublease agreement itself, or multiple ver- sions depending on the portfolio of hangar holdings an FBO may have on its leasehold. For example, a large turbine aircraft operator subleasing space in a common-use storage han- gar will likely warrant a much more thorough sublease document, than for example, a T-hangar customer. Though more professionally man- aging the hangar subleasing process surely pays financial dividends from the base of existing customers, fill- ing available hangar space with new customers is of equal importance for an FBO. Similarly, there is a proven process to effectively market to, and capture new sublease business. For most FBOs, placing an ad in a trade publication regarding available hangar space, or having lunch with a potential sublessee’s chief pilot is the extent of the efforts expended. While noble and necessary, neither action taken individually or collec- tively, truly constitutes a process. That process—capturing new sublease customers—along with an in-depth discussion on lease sub- ordination, business rules creation, hangar sublease construction and much more, will be presented in “The Essentials of Hangar Subleasing: From Risk to Revenue,” an NATA management development course taught by FBO Partners. Scheduled for May 10-11, 2016 in Augusta, GA, the course has been created for FBO owners, GMs, and leasing agents of FBOs to approach the subleas- ing process in a more intentional manner and to grow the line of business. Also included is a negotia- tion workshop designed to identify decision influencers and negotiate with the varied decision makers responsible for placing owned or managed aircraft with an FBO. Against steadily declining fuel mar- gins, FBOs are wise to monetize their real estate holdings more effectively. While perhaps not as exciting as other business lines, a hangar, managed well, has a reward all its own for the FBO—a more stable bottom line. Douglas Wilson is the president and founder of FBO Partners LLC, an avia- tion consulting firm that specializes in hangar subleasing, mergers and acquisitions, marketing, and other FBO business disciplines. He can be reached at [email protected]. Aviation Business Journal | 4th Quarter 2015 31
