Characteristics of the FBO Industry 2018-2019 (2020)

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30 This chapter examines the 3,718 FBOs operating in the United States that have listings in the AirNav database as of December 2018. The FBOs of interest are those operating at public use airports, a total of 3,661 FBOs. A few FBOs (57) operate at private-use landing facilities and are listed in the AirNav database; however, these FBOs are excluded from this analysis because the public does not have access to their services and facilities. Furthermore, there is reason to believe that FBOs at private-use airports are more numerous than 57 but have not been listed with AirNav. Figure 15 shows how FBOs at public-use airports are described in this chapter, first by type of FBO and then by location. Types of FBOs FBO Ownership Patterns As shown in Figure 16 and Table 8, the majority of FBOs (57%) operating at public-use airports are privately owned. Airport sponsors, including municipalities, counties, and airport authorities, own 42% of FBOs, and a small number of FBOs (19) are owned and operated by colleges or universities. Types of Public-Use Facilities by FBO Ownership As shown in Table 9, the vast majority of FBOs exist at conventional airport facilities. There are a few FBOs at heliports and seaplane bases. As noted previously, most heliports are owned privately, many by hospitals, and are not open to the public. FBO Business Models There is great diversity among the 3,661 FBOs at public-use airports that reflect scale of operations, capital investment, services offered, number of locations, ownership, and marketing strategies. This publication divides FBOs into four groups, each of which will be examined in greater detail in subsequent chapters. • Publicly Owned FBOs. These FBOs include municipalities, counties, authorities, schools, branches of the military, or other governmental groups and represent an estimated 43% of all FBO locations at public-use airports. Most FBOs in this group are individual operators. • Independents. Privately owned, independent FBOs, known historically as “mom and pop” FBOs, operate at one or two locations and at one time were owned by individuals or families. This group remains the largest group numerically in the industry, composed of 1,666 locations, or 46% of all locations in the United States. C H A P T E R 3 FBOs Operating in the United States

FBOs Operating in the United States 31 Privately Owned FBOs, 2,099, 57% Authorities, Counties, & Municipalities, 1,543, 42% University- Owned, 19, 1% Source: Compiled from AirNav Database, December 2018, and Quadrex Aviation, LLC. Figure 16. FBO ownership patterns. U.S. FBOs (3,718) At Private-Use Airports (57) At Public-Use Airports (3,661) Types of FBOs Ownership Patterns By Landing Facility By Business Model Location of FBOs By FAA Region By NPIAS Category Airports with Multiple FBOs Figure 15. Analysis of FBOs operating in the United States. Owner Number Percent (%) Privately Owned FBOs 2,099 57 Authorities, Counties, and Municipalities 1,543 42 University Owned 19 1 Total FBO Locations 3,661 100 Source: Compiled from AirNav Database, December 2018, and Quadrex Aviation, LLC. Table 8. FBO ownership patterns.

32 Characteristics of the FBO Industry 2018–2019 • Small Networks. These consist of privately owned FBOs with three to five locations. Small networks often concentrate in one or two regions and can take advantage of economies of scale for fuel purchases and of cross-utilizing aviation specialists among locations (e.g., main- tenance, flight training, aircraft rentals, and avionics). • Large Networks, Franchises, and Affiliates. This group of FBOs has more than five loca- tions. Each location within a network or franchise shares the same brand identity and service standards. Discounts for fuel and other services are available at all locations. Some large net- works are diversifying the services they offer and increasing their network reach by including non-owned affiliates. To competitively address the market power of the large networks and franchises, some independent and small-network FBOs are affiliating to offer similar service levels and discounts. Table 10 and Figure 17 present the number of companies or airport sponsors in each group, the number of actual and average locations, and the percent share of all FBO locations. Location of FBOs FAA Regions The FAA divides the United States into nine geographic regions to carry out its responsibili- ties, which include the following: • Aircraft safety inspections • Aircraft and engine certification FBO Ownership Number of Individual Companies or Airport Sponsors Number of Locations Average Number of Locations Percent of Total Locations (%) Publicly Owned FBO 1,562 1,562 1.0 43 Independents (1-2 locations) 1,556 1,666 1.1 46 Small Networks (3-5 locations) 28 94 3.4 3 Large Networks and Franchises (> 5 locations) 14 339 24.2 9 Total 3,160 3,661 1.2 100 Source: Compiled from AirNav Database, December 2018. Table 10. Types of FBOs operating in the United States. Type of Landing Facility Public and University-Owned FBOs Privately Owned FBOs Total Airports 1,559 2,063 3,622 Heliport 2 9 11 Seaplane Base 1 26 27 Balloonports 0 0 0 Gliderports 0 1 1 Ultralight 0 0 0 Total 1,562 2,099 3,661 Source: Compiled from AirNav Database, December 2018. Table 9. FBO locations by type of landing facility.

FBOs Operating in the United States 33 • Engine and propeller rulemaking • Airport planning and design assistance • Air traffic control operations • Incident/accident response and airmen certification • Regional counsel • Human resources • Civil rights • Logistical support Figure 18 shows the FAA regions and the number of FBO locations in each region. Table 11 displays each region’s GDP, share of FBO locations, public-use airports, and based aircraft. For example, the Great Lakes Region has 20% of listed FBO locations, 21% of public-use airports, and 17% of based aircraft. The Southern Region has the same share of FBO locations and based aircraft (18%), but only 14% of public-use airports. GA activity is somewhat concentrated in this region. California, Nevada, and Arizona, also a region of intense activity, have 8% of public-use airports, 9% of FBO locations, and 15% of based aircraft. Table 12 describes FAA classifications for GA airports. These are of interest, as they provide a comprehensive way to consider FBO size and services performed at individual airports. FBOs at Airports in the National Plan of Integrated Airport Systems (NPIAS) The NPIAS report is prepared by the FAA, U.S. Department of Transportation (DOT), and submitted to Congress every 2 years. The 2019–2023 NPIAS contains data for about 3,321 exist- ing public-use airports and proposed airports. Of utility to this report is the NPIAS grouping of airports. Airports that have scheduled air service with 10,000 or more enplaned passengers are considered primary commercial service airports. These are grouped as large, medium, small, and nonhub airports. Nonprimary airports include commercial service airports (with between 2,500 and 9,999 enplaned passengers per year), relievers, and GA airports. A reliever airport Publicly Owned FBO, 1,562, 43% Independents (1-2 locations), 1,666, 46% Small Networks (3-5 locations), 94, 3% Large Networks & Franchises (> 5 locations), 339, 9% Source: Compiled from AirNav Database, December 2018. Figure 17. Relative shares of different FBO owners.

34 Characteristics of the FBO Industry 2018–2019 78 736 578 389 148 366 661 358 347 Figure 18. FBOs at public-use airports by FAA region. FAA Region Regional Code Annual Regional GDP (millions $) 4Q 2018 ($) FBO Locations Total Public- Use Airports Based Aircraft Percent of Regional GDP (%) Percent of Public- Use Airports (%) Percent of FBO Locations (%) Percent of Based Aircraft (%) Alaska AAL 54,851 78 394 5,400 0.3 8 2 3 Central ACE 810,195 358 467 11,587 4 9 10 6 Eastern AEA 4,399,758 366 455 18,768 21 9 10 10 Great Lakes AGL 3,303,393 736 1,051 32,388 16 21 20 17 New England ANE 1,545,739 148 180 6,450 7 4 4 3 Northwest Mountain ANM 1,545,739 389 645 25,593 7 13 11 13 Southern ASO 3,396,306 661 734 33,936 16 14 18 18 Southwest ASW 2,508,591 578 767 28,847 12 15 16 15 Western Pacific AWP 3,635,819 347 399 29,291 17 8 9 15 Totals 21,200,391 3,661 5,092 192,260 100 100 100 100 Source: Compiled from FAA Form 5010-1, Airport Master Records, as of December 5, 2018, AirNav Database, December 2018, and U.S. Bureau of Economic Analysis. Note: This table omits Puerto Rico and the Virgin Islands. Table 11. Regional GDP, FBO locations, public-use airports, and based aircraft by FAA region.

National Regional Local Basic Support the national airport system by providing communities access to national and international markets in multiple states and throughout the United States. National airports have very high levels of aviation activity, with many jets and multiengine propeller aircraft. Supports regional economies by connecting communities to regional and national markets. Generally located in metropolitan areas and serve relatively large populations. Regional airports have high levels of activity, with some jets and multiengine propeller aircraft. The metropolitan areas where regional airports are located can have an urban core population of between 10,000 and 50,000. Supplements local communities by providing access to markets within a state or immediate region. Local airports are most often located near larger population centers, but not necessarily in metropolitan or micropolitan areas. Most of the flying at local airports is by piston aircraft in support of business and personal needs. These airports typically accommodate flight training, emergency services, and charter passenger service. Provide a means for GA flying and link the community to the national airport system. These airports support GA activities (e.g., emergency services, charter or critical passenger service, cargo operations, flight training, and personal flying). Most of the flying at basic airports is self-piloted for business and personal reasons using propeller-driven aircraft. They often fulfill their role with a single runway or helipad, and minimal infrastructure. Airports meet one of the bulleted minimum criteria for annual activity as follows: • 5,000 or more instrument operations, • 11 or more based jets, • 20 or more international flights or 500 or more interstate departures, • 10,000 or more enplanements and at least one enplanement by a large certificated air carrier • 500 million pounds of landed cargo weight. • In an MSA, 10 or more domestic flights over 500 miles, 1,000 or more instrument operations, and one or more based jets or 100 or more based aircraft; • Reliever with 90 or more based aircraft; or • Nonprimary commercial service airport (requiring scheduled service) with an MSA. • Publicly owned and 10 or more Instrument operations and 15 or more based aircraft; or • Publicly owned and 2,500 or more enplanements. • Publicly owned with 10 or more based aircraft or four based helicopters if a heliport; • Publicly owned located 30 or more miles from the nearest NPIAS airport; • Owned or serving a Native American community; • Identified and used by the U.S. Forest Service, U.S. Marshals, U.S. Customs and Border Protection (designated, international, or landing rights), U.S. Postal Service (air stops), or has Essential Air Service; • A new airport or replacement (publicly owned) airport that has opened within the last 10 years; or • Unique circumstances related to special aeronautical use. Unclassified Currently in the NPIAS but with limited activity. If the next review of an unclassified airport’s activity shows levels that meet the criteria for one or more of the classifications, that airport will be reclassified in the next published NPIAS. Source: National Plan of Integrated Airport Systems (2019–2023), Appendix C: Statutory and Policy Airport Categories Used in the NPIAS Report. Table 12. Description of FAA asset classifications for GA airports.

36 Characteristics of the FBO Industry 2018–2019 refers to an airport designated to relieve congestion at a nearby commercial service airport and to provide more GA access to the overall community. These categories of airports became the standard units for analysis. Beginning in 2012, the FAA further refined GA airports into five categories: national, regional, local, basic, and unclassified. Table 13 summarizes the number of FBO locations by categories of airports originally defined by statute for the NPIAS. Some NPIAS airports have no FBO; others have more than one. Reliever airports have the largest number of airports with multiple FBOs. Table 14 shows the number of FBO locations by both the original statutory categories and the new asset classifications for GA airports and creates an index of FBOs to airports to get a sense of which categories of airports have more than one FBO on the premises. Since each airport category has a different number of airports, the index smooths these differences. Medium- and small-hub airports and national GA airports have the highest concentration of multiple FBOs. Conversely, at local airports there is virtually a one-to-one ratio between FBO locations and NPIAS airports, except in the category of local commercial. The local asset category implies a small airport that primarily serves a population center that is smaller than a metropolitan or micropolitan area. Those local airports that have commercial service are likely to be remote airports with regular charter or Essential Air Service, but otherwise limited in aircraft activity that might support an FBO. Airports with Multiple FBOs The number of FBO locations should not be equated with the number of airports. There are 727 FBO locations at 299 airports. Some FBOs operate multiple locations on a single airport. For example, Signature Flight Support operates three locations at Teterboro Airport (TEB) and two locations at Van Nuys Airport (VNY). Figure 19 displays airports with multiple FBOs. Two FBO locations on an airfield is the most prevalent number. Table 15 groups the airports according to NPIAS roles. Airports with the greatest intensity of GA activity also have more FBO providers. It is noteworthy that the largest commercial service airports attempt to redirect private aircraft activity to nearby GA reliever airports, and consequently demand for FBO services may be more limited at these airports. Airport Category Number of FBO Locations (1) NPIAS Airports (2) Index of Multiple FBOs (3) = (1)/ (2)*100 Total Primary Airports 544 380 143 Nonprimary Commercial Service 79 126 63 Reliever 406 261 156 General Aviation 2,180 2,554 85 Total NPIAS Airports 3,209 3,321 97 Source: Compiled from FAA, National Plan of Integrated Airport Systems (2019–2023) and AirNav Database, December 2018. Table 13. FBO locations by public use airports, original statutory categories.

FBOs Operating in the United States 37 Airport Category Number of FBO Locations (1) Public-Use Airports (2) Index of Multiple FBOs (3) = (1)/ (2)*100 Large Hub 46 30 153 Medium Hub 65 31 210 Small Hub 123 72 171 Nonhub 311 247 126 Total Primary Airports 545 380 143 National - GA 38 22 173 National - Reliever 153 66 232 National Subtotal 191 88 217 Regional - GA 331 296 112 Regional - Reliever 202 143 141 Regional - Commercial Service 57 53 108 Regional Subtotal 590 492 120 Local - GA 1,181 1,176 100 Local - Reliever 31 29 107 Local - Commercial Service 22 73 30 Local Subtotal 1,234 1,278 97 Basic - GA 544 840 65 Basic Subtotal 544 840 65 Unclassified - GA 86 220 39 Unclassified - Reliever 20 23 87 Unclassified Subtotal 106 243 44 Total Nonprimary Airports 2,665 2,941 91 Non-NPIAS Airports with FBOs 451 450 100 Totals 3,661 3,771 97 Source: Compiled from FAA, National Plan of Integrated Airport Systems (2019–2023) and AirNav Database, December 2018. Table 14. FBO locations at public-use airports by airport category. 215 51 17 9 7 Two Three Four Five Six or Seven Source: Compiled from AirNav Database, December 2018. Figure 19. Number of airports with multiple FBO locations.

38 Characteristics of the FBO Industry 2018–2019 Airport Category Airports Listing Multiple FBO Locations Total NPIAS Airports Percentage Primary Airports Large Hubs Medium Hubs Small Hubs Nonhub Total Primary Airports Nonprimary Airports National Regional Local Basic Unclassified Total Nonprimary Airports Total 12 22 38 62 134 58 71 31 4 1 165 299 30 31 72 247 380 88 492 1,278 840 243 2,941 3,321 40 71 53 25 35 66 14 2 0 0 6 9 Source: Compiled from FAA, National Plan of Integrated Airport Systems (2019–2023) and AirNav Database, December 2018. Table 15. Number of airports with multiple FBOs by NPIAS roles/categories.