Wings Magazine

Features Operations
Creating Client-Focused FBOs

Customers and clients are two very different things in business. Turning a customer into a client is a fine art.


October 1, 2007
By Rob Seaman

Topics

It’s tough to run an FBO in Canada. Customers can be fickle, market
influences can change at a moment’s notice, seasonality may influence
demand, and sometimes folks just aren’t travelling like they used to.
Merely getting a customer to try your operation is one big challenge;
turning that customer into a client is another. But despite the
challenges, some 300 facilities in this country offer some form of FBO
service and vie for a share of the market.

The
general and business aviation market is enjoying growth and development
almost akin to the levels last seen in the mid-90s. But the market is
different now than it was then, and the methods of getting and building
business have changed too. Ask operators how they are attracting
business today and what is different from a few years ago, and you will
get many different answers. Some will relate to regional influences,
and these become highly personal and unique to the site. That aside,
there are some basic issues that affect just about all FBOs and that
almost all operators agree on.

The business of running an FBO
has matured and evolved even from three years ago. The ways to make
money, the things that are or are not charged for, and the overall
operational considerations are more complex than before. These changes
influence how the businesses are operated how successful they can be
financially.

The biggest challenge to running a Canadian FBO
comes from the sheer size of this country and the relatively small
client base. We depend to a great extent on non-resident users of our
services. In some cases geography makes it a bit easier to be
successful – being the first point of entry or last on the way out for
transocean or transborder traffic provides something of captive client
base, like that old highway sign saying “Last service station for 50
miles.” So when international business travel is up, FBO locations
adjacent to the border or near the coast tend to see more business.
FBOs in these areas tend to have higher-volume fuel sales but also face
a more fluid and less predictable sales base. They must staff to handle
the potential traffic – whether it materializes or not. Full service at
these FBOs must be available as and when needed, and clients are seldom
willing to wait for a call-out.

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The weather in this country also
drives the need for FBOs to provide hangar space for both resident and
transient operators, unlike those blessed to operate in warmer
climates. So the service demand goes much further than ramp and FBO
lounge and pilot facilities. Today it means not only building and
maintaining hangars, but also finding and managing the financial
resources to ensure that their operations meet the needs and codes of
many taskmasters. Time was when simply building the hangar, putting on
a reasonable door, running a bit of heat, having a good roof and
renting the space was enough. But since Skyservice in Toronto rolled
out the first white hangar (floors, ceilings and walls all fresh and
smart in white) in the early ’90s, the bar for support amenities has
been rising. Clients have come to expect white-glove service, even in
the hangar, and this can be the difference between getting or not
getting long-term business.

Keeping these facilities clean and
neat takes people and financial resources. And environmental concerns
can be very daunting today – not to mention liabilities and long-term
assurances for total compliance at local, regional, provincial and even
federal levels. Recent changes in fire codes at some airports have
resulted in the demand for sophisticated, deluge fire suppression
systems – again a cost to be borne by the FBO.

With the vast
number and variety of aircraft in use today, even a modest FBO hangar
must offer multiple tow-bars, multiple tugs capable of providing
correct draw-bar ratios for everything from a BBJ to 172, O2 and
various power carts, lav carts and customer support vehicles – again
all at a cost and all requiring maintenance and upkeep. And
increasingly now, FBOs will face new and evolving security procedures
and protocols – along with the need to manage and maintain these for
tenants, transients, staff and, of course, the various authority levels
from local airport to national government bodies. The FBO will have to
front the cost, and downstream the users and clients will pay
somewhere, somehow.

Not so many years ago, the big make-or-break
issue in FBO success was fuel cost. In the late ’80s and early ’90s, it
was not uncommon to see line crew openly trying to steal business from
a competitor – and a few cents a litre could make all the difference
between getting a sale or not. Tricks of the time included getting
there first with a refueler, tracing tail numbers and sending an
invitation, following an aircraft as it taxied in and numerous other
direct and indirect methods. Some FBOs refused to play the price war
and compensated by developing nice facilities with amenities that
mirrored their larger, more successful US counterparts. The shift to
emphasize service proved itself over time as international business
travellers enjoyed a new level of support, focused more on them and
their needs and less on simply being a basic fuel and tech stop. Even
small sites found that offering a few amenities could make all the
difference. At some airports, the operator with the nicest building,
some amenities and a staff stressing customer service found that even
with a higher price for fuel, it was getting the lion’s share of the
local market and soundly beating its competitors…