Airport_Business_December2019-January2020 - 35

FBO MATTERS
consumers, and a highly regulated
At a mere 679 pages, it's a lovely weekend
both at lease commencement. It is
environment define an airport.
often in the FBO's interest to do so, read. While most enjoy the brochure
Instead, it is the attendant features
particularly when inheriting a leasehold
version of it, the FAA Grant Assurances
of the local economy such as a city's
with outdated improvements. However, themselves, FAA Order 5190.6B is
business-friendly or unfriendly policies, while reasonable to require a minimum
virtually a religious document to an
the growth or stagnation of living
investment, it's unreasonable to then also
airport, complete with interpretations of
dictate how that FBO should invest in
said Grant Assurances. By understanding
wage jobs and other attendant features
its facilities. FBOs know exactly which
these documents as an FBO, not only will
determine how many itinerant aircraft
improvements provide sufficient ROI to
you be prepared to enter a negotiation on
visit or call that airport home. These
make their rent payment to the airport- a level playing field, you'll likely earn the
aircraft and the total gallons produced
let them build what they know pays
respect of the airport administrator seated
by their activity is what determines
those bills, which by extension serves an
across the table from you.
the appropriate number of FBOs. For
airport's customers. That said, to ensure
Next, with the recent yet slowly
airports, the takeaway is this: Before
your airport provides essential services
fading push by AOPA regarding
entering into a lease for yet another
FBO operator, consider if there is enough
that are more SASO-centric, require "egregious FBO pr icing," FBOs
business to justify it. If your airport has
remain under a microscope by airports
the FBO to make space available for
two healthy, competitive FBOs, adding
concerning their pricing policies. In fact,
interested - and qualified - SASO
a third may make all of them marginal, sublessees.
those Grant Assurances, the ones on
while adding a fourth might put them
Finally, consider what land you're
pricing, are likely incorporated word-forall out of business. And just because an
offering. For example, a severely height
word as boilerplate into your FBO's lease
airport has one FBO, doesn't means
or your airport's minimum standards.
restricted parcel does not have the same
utility as an unrestricted parcel. To
Because of this, recognize it is the most
it needs two. In fact, a 2017 survey of
price sensitive of consumers - pilots of
AirNav.com found that of the 2,191 demand an FBO pay the same ground
rent as a like or similar FBO tenant who
piston-powered light general aviation
airports in the US in which an FBO
offers Jet A, some 88.8 percent of them, has no such restriction is patently unequal
aircraft - who are also the most vocal
treatment and an attorney might argue
to your airport administrators. If you're
or 1,946, have only one FBO.
Next, Minimum Standards should
it violates certain Grant Assurances. If
one of those 1,946 sole source FBOs, the
level an airport's playing field, not create
an FBO can't build say, hangars with 28' need to manage perception is that much
onerous requirements that jeopardize the
doors because the imaginary surfaces of
greater on pricing. As the expression
vibrancy of an airport's tenant base. In
FAR Part 77 preclude such size, that alone
goes: pigs get fat, hogs get slaughtered.
recent decades, the aviation industry has
severely affects an FBO's profitability and
To that end, consider dropping the Ace
become more specialized and airport
ability to pay the rent. The ground rent
of Spades into your next negotiation for
businesses have organized along two
charged should be discounted to reflect
that new FBO lease: Propose adding an
distinct paths as recognized by airports:
Avgas Self-Serve Island. While no, they're
that fact.
FBOs and SASOs. Few FBOs remain
Next, let's turn to the FBO's
not money makers for a traditional FBO,
that are truly "full service," which was
perspective. First, keep in mind public- neither is Avgas more generally. However,
once defined as offering fuel, hangar
use airports operate within a complex
it's less than leasing an extra Avgas truck
in the long run, counts as part of your
and tie down, plus f light training, web of federal, state and local regulations
aircraft maintenance, sales and charter- - each of which limits an airport's ability
FBO's required capital commitment,
all in-house. Today, FBOs are mainly
to make arbitrary or capricious decisions. provides your Avgas customers service
"gas and grass," meaning they offer fuel
Further, airport administrators tend
options and all-but-neuters any argument
and related line services, plus aircraft
for price gouging.
to report to a political body of some
hangar and tie down. A SASO business
Finally, and returning to the start, the
form or another - be it an Airport
by contrast may be a f light school, an Authority, a Board of Supervisors or
key to any negotiation is understanding
other elected officials. The point being, and being able to articulate the opposing
MRO or otherwise. And yet, I read
well-meaning-yet-completely-outdated
if an airport can't accept a certain request
party's position- not to exploit it, but to
Minimum Standards every month that
of a prospective lessee during a lease
find common ground. While respectful
somehow think FBOs still provide "... negotiation, it's not because they don't
debate should always be the norm, FBOs
must always keep in mind when the
avionics repair and installation, propeller
like the FBO across the table. It's the
and accessory overhaul, and parts sales." No
negotiation with the airport is all done
regulatory framework that constrains
longer. At a minimum, allow FBOs to
and the ink dries on the new lease, they're
decisions by the public sector that the
outsource aspects of your Minimum
private sector would by contrast find easy
still your landlord and you still have to
Standards that are no longer relevant to
to accommodate.
live together for the next 35 years. So, if
On that subject - the regulatory
your FBO's social media profile shows it
the FBO business model.
Related, it is completely reasonable
framework - get to know a publication
as "in a relationship" with your airport,
for airports to expect FBOs to deploy
your airport manager holds near and dear:
you might want to update it to the "it's
The FAA Airport Compliance Manual, complicated" tag. 
a reasonable level of investment for
otherwise known as FAA Order 5190.6B.
a given leasehold size, lease term, or

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