Myths of Consolidation Continued from page 65 to one FBO through an FBO transaction. In the early 2000s, OAK expanded to two FBOs and then in the early 2010s to three FBOs. Today, there are two FBOs at OAK as a result of an FBO transaction that took place in the mid 2010s. At SJC in the late 1980s, there were three FBOs. In the mid 1990s, this contracted to two as a result of one of the three FBOs going out of business. In the early 2000s, this further consolidated to one as a result of an FBO transaction. Today, there are two FBOs at SJC. So why all this “talk” about FBO consolidation? What has occurred over the last 30 years has been the consoli- dation of the number of FBO companies, not the number of FBO locations. This type of consolidation has occurred when national and regional FBO network companies acquire independent FBO companies with a single-location at an airport. Consolidation of FBO companies also occurs when a national and regional FBO network of companies either acquire the assets (FBOs) of one and/or merge together. These transactions have received plenty of press due to their high profile. Some of the more prominent U.S. FBO company consolidations of national and regional FBO network companies over the last 30 years are as follows: 1992: Page Avjet Airport Services merges with Butler Aviation to form Signature Flight Support (40 FBOs, all combined) 1996: Mercury Air Centers purchases the assets of five Raytheon Aircraft Services’ FBOs (11 FBOs, all combined) 1998: Signature Flight Support purchases 11 AMR Combs’ FBOs, with a requirement by the U.S. Justice Department to divest of three FBOs to maintain com- petition at those airports (48 FBOs, all combined) 2005: Atlantic Aviation purchases AvCenters five FBOs (19 FBOs, all combined) 2006: Atlantic Aviation purchases Trajen Holdings, with 21 owned FBOs operated as Trajen Flight Support and two under contract (43 FBOs, all combined) 2007: Signature Flight Support purchases Executive Beechcraft’s four FBOs (95 FBOs, all combined) 2007: Atlantic Aviation purchases Allied Capital’s FBO holdings, with 24 FBOs operated as Mercury Air Centers, Corporate Wings, First Air, and IX Jet Center (68 FBOs, all combined) 2008: Signature Flight Support purchases Hawker Beechcraft’s 7 FBOs, with a requirement by the U.S. Justice Department to divest of one FBO to maintain competition at that airport (101 FBOs, all combined) 2008: GTCR and Encore FBO purchase Landmark Aviation’s 33 FBOs (41 FBOs, all combined) 2014: Atlantic Aviation purchases Galaxy Aviation’s six FBOs (68 FBOs, all combined) 2014: Landmark Aviation purchases Ross Aviation’s 21 FBOs, with a requirement by the U.S. Justice Department to divest of one FBO to maintain com- petition at that airport (75 FBOs, all combined) 2016: Signature Flight Support purchases Landmark Aviation’s 68 FBOs, with a requirement by the U.S. Justice Department to divest of six FBOs to maintain competition at those airports (195 FBOs, all combined) What’s important to note about these FBO company consolidations is that none of these resulted in consolidation of FBO locations. To further demonstrate that the consolida- tion of FBO locations at U.S. airports is not as exacerbated as once thought, in 1985, approximately 8.0% of all public-use airports had two or more FBOs, while today, approximately 5.4% of public-use airports are served by two or more FBOs. These statistics reveal that while there has been some level of consolidation of FBO locations over the last 30 years (at approximately 2.6% of public-use airports), over 90% of public-use airports have always had either one or zero FBOs. Further, it is important to recognize how consumer impacts, that are believed to be associated with FBO location consolidation, are minimized by the competi- tive environment that today’s technology has created for FBOs not located on the same airport (e.g., fuel efficient aircraft, contract fuel programs, FBO network loyalty programs, internet information, smart phones, etc.), but this is a complex issue best suited for another article. Jeff A. Kohlman Managing Principal Aviation Management Consulting Group Helping your GAME (General Aviation Management Excellence) 66 Aviation Business Journal | 2nd Quarter 2018
