Building the FBO Terminal of Tomorrow Continued from page 39 experience altogether–for those that actually use the terminal building. The opening of a private terminal at LAX, called the Private Suite, for use by airline passengers willing to pay for the experience and privacy is instructive for the FBO industry. The membership fee is $7,500 per year, and carries a per-use fee on top. Non-members can use the lounge for a mere $2,000 per day, but that’s a shared area as opposed to a private suite. Think that’s expensive? Some 1,200 airline travelers have already signed up. Even airlines have various pseudo-elite areas, in which frequent travelers can pay an annual fee, or a per-use fee to use the “lounge.” Within the FBO industry today, certain aircraft operators such as NetJets, FlexJet, and others use ded- icated-use facilities at larger airport markets. Not only do these facilities create operational convenience for the operator, they substantially alter the passenger experience by creating a service differentiation. The point being, each of these examples: the Private Lounge in LAX, airline clubs, and dedicated-use facilities apply to the passengers currently using FBO terminals across the country. Here’s how to do it at the FBO level. To define such space, as a function of a remodel or through new-build, an FBO terminal must be physically bifurcated to include the lobby the industry knows of today, albeit smaller, and an exclusive area that is members only. Those mem- bers do not include limousine drivers or that DOM guarding the coffee machine in the existing lobby. Even pilots would not be provided access unless they are owner-operators, who again, pay a membership or access fee. Membership is not even a privilege to be given to a based tenant as an incentive, unless they choose to pay to use the lounge; nor is it a gift bestowed on any transient customer, regardless of how many gallons they purchase annually. To do otherwise is to compromise exclusivity and devalue the offering. While the fee structure and business model are dependent on the FBO, they should minimally include a very high annual fee– something no less than four digits to the left of the decimal place. Combinations of initiation fees, monthly fees, one-time use fees, etc. may also warrant consideration. To be sure, the members-only FBO has been attempted in the past, but this is not the same concept. This is taking the FBOs of today and tomorrow built during the arms race of FBO terminals, bifurcating and monetizing those structures. Pilots, vendors, and those unwilling to pay for a bespoke experience can continue to use the existing lobby. There is no suggestion of dialing back the current look or feel of the lobby, amenities or common areas of the FBO terminal. Moreover, it is creating exclusive space within those build- ings that’s anything but common. Visually, this members-only area is behind closed doors. Those doors likely incorporate frosted glass or another architectural feature that connotes to other passengers that whatever is behind them is very, very special indeed. The features and benefits must be so alluring, frequent passengers who reside locally–who again, pay for this mem- bership–desire to come out to the members-only FBO lounge even when they are not flying that day. Behind those doors is a destination itself. So what might a member find there? A full bar with bartender, a wine sommelier, an executive chef, an ultra-high tech conference room, a cigar-room, and more. And all of it, perhaps with the exception of meals prepared by the executive chef, is free to members. The employees who work behind these doors are not cross-utilized at the CSR desk, or anywhere else at the FBO. They’re not even FBO employees per se–they are highly-compensated hospital- ity professionals, and experts in their respective fields. In fact, these are the same experts that will help FBOs create these exclusive spaces, because–difficult though it is to admit–the individual or company that will bring the greatest change to the FBO industry, the one that will alter the current arms race, will not be from the FBO industry. Douglas Wilson is the President and founder of FBO Partners, LLC, an aviation consulting firm specializing in hangar subleasing, marketing, mergers & acquisitions, and IS-BAH, among other FBO busi- ness disciplines. He can be reached at [email protected] Aviation Business Journal | 2nd Quarter 2017 41
