Nearly 70% of FBOs in the U.S. and Canada suffered a decrease in fuel sales during 2020, according to the Aviation Business Strategies Group‘s (ABSG) Annual FBO Fuel Sales Survey.
The survey also found that only 20% of FBOs reported an increase in fuel sales during the year of the pandemic, according to ABSGs Principals John Enticknap and Ron Jackson.
“There’s no question that 2020 will go down as one of the most economically depressed periods ever in fuel sales for the majority of the FBO industry,” Enticknap said. “This is by far the most negative results we have experienced in the eight years we have been conducting this survey.”
Enticknap said that not all the news was bad as nearly 12% of survey respondents indicated that they had increased fuel sales of at least 5%, with 9% having an increase of more than 8%.
According to Jackson, the fairly robust charter market contributed to the one bright spot in an otherwise down year.
“With the COVID-19 human distancing awareness recommendation, chartering aircraft and the personalized FBO environment became a popular choice as an alternative to airlines and crowded commercial terminals,” Jackson said. “FBOs located primarily in the South, as well as recreational and second home destinations, reported steady transient traffic that helped buoy otherwise soft Jet A fuel sales.”
According to ABSG, confidence in the economy also suffered a tremendous blow during 2020 as 42% of the survey respondents said the economy is headed in the wrong direction, with only 18% providing a positive response.
“By contrast, the results of last year’s survey showed 73% of respondents were positive about the direction of the economy, while only 7% were concerned,” Jackson said.
A follow-on question from the 2020 survey asked FBOs whether they would be offering Sustainable Alternative Fuel (SAF) to their customers during 2021. The survey results showed that 86% of respondents said they would not be offering SAF, with only 1% indicating they would, while 13% were undecided.
“This is similar to the results from last year’s survey, and frankly, this response does not surprise us,” Enticknap explained. “We find there are still a lot of questions from FBO operators regarding the availability of the fuel, as well as a higher cost factor. It will be interesting going forward to see if SAF will become mainstream as more-and-more aircraft operators adapt and adopt its use.”
Another area the ABSG survey explores with FBO operators involves feedback regarding their concerns and greatest challenges facing the industry.
Top five concerns reported were:
- Effects of the COVID-19 pandemic on the economy, transient aircraft traffic, and keeping a service team intact
- Cost of Jet A and avgas going up and economic inflationary concerns
- More government regulations, rising airport fees, and increased taxes
- Increased insurance premiums and lower cash flow
- Effect of green energy rhetoric could slow economic recovery and stymie flight department activity
2021 FBO Industry Forecast
Based on the Annual FBO Fuel Sales Survey, interviews with FBO owners and aircraft operators, analysis of the oil markets and the aviation fuel industry, Enticknap and Jackson found that FBO operators expect a slow recovery in 2021.
As part of the survey, ABSG asked FBO operators to predict fuel sales for 2021 vs. 2020:
- 39% said they expect to have at least the same fuel sales as the depressed numbers in 2020
- 18% expect fuel sales to decline
- 22% said they forecast fuel sales increases of 1% to 4%
- 11% said they forecast fuel sales increases of 5% to 8%
- 9% expect to have fuels sales exceed 8%