The Myths of FBO Consolidation D on’t let the title of this article fool you. It is undeni- able that there has been consolidation within the FBO industry over the last 30 years. While FBO consolidation has occurred, it has not been nearly as dras- tic as some articles and reports convey. Consolidation has come in different forms rather than simply the reduction of the number of FBO locations at U.S. public-use airports. In addition, there have been periods over the last 30 years where expansion has occurred within the FBO industry. To start, it’s best to define how the term FBO is being used in this article (and, most likely, in the arti- cles and reports mentioned above). FBO has primarily become known to represent an aviation service busi- ness located at an airport and, at a minimum, that sells Avgas and/or Jet fuel to general aviation aircraft. The number of FBOs at U.S. airports and associ- ated trends have been a topic of interest for Aviation Management Consulting Group (AMCG) and myself for the last 20 years. The very first internal research proj- ect I personally undertook upon the founding of AMCG was the validation (or invalidation) of the widely-used statistic of “10,000 FBOs in the 1980s that consoli- dated to the mid-3,000 FBOs.” Frankly, the statistic just didn’t make sense. While many airports in the 1980s had multiple FBOs, there were also many airports that didn’t have any FBOs. If the statistic of 10,000 FBOs was true, it would have meant that every public-use air- port (of which there were 5,576 in 1985) had on average 1.8 FBOs, or every paved, public-use airport (of which there were 3,813 in 1985) had on average 2.6 FBOs. Let the facts speak for themselves! To start, AMCG col- lected (and continues to collect) the annual AC-U-KWIK Airport/FBO Directories (dating back into the 1980s) and the annual AOPA Airport Directories (dating back into the 1960s). For the last 20 years, AMCG has utilized these research materials to annually count the number and type of FBOs at public-use airports in the United States. The findings on the number of FBOs in 1985 were drasti- cally different than claimed in the articles and reports Aviation Business Journal | 2nd Quarter 2018 BY JEFF A. KOHLMAN previously mentioned. In 1985, there were approximately 3,200 FBOs at public-use airports with a 3,000-foot paved runway or greater (an average of 0.8 FBOs). Fast-forward to 2017 where there are now approxi- mately 3,350 FBOs at public-use airports with a 3,000- foot paved runway or greater. Does this mean that there has not been any consolidation in the FBO industry? Absolutely not! The FBO industry has experienced many cycles of contraction and expansion over the last 30 years. This has resulted in some airports to only experi- ence FBO consolidation (e.g., three to two, two to one, and one to zero), some airports to only experience FBO expansion (e.g., zero to one, one to two, etc.), and some airports to experience both contraction and expansion. Good examples of the expansion and contraction cycles in the FBO industry are two airports in the San Francisco Bay Area—Oakland International Airport (OAK) and San Jose International Airport (SJC). In the mid 1980s at OAK, where I started my FBO management career, there were only two FBOs. These were struggling times for our industry. In fact, my FBO competitor went through three different owners and approximately 15 different general managers over a 10-year period. In the mid-1990s, OAK consolidated Continued on page 66 65
