Tip of the Week: Watch Your Discounts—Do the Math!

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

There’s a syndrome that is unique to the FBO industry. We call it the false-positive fuel pricing syndrome where the posted price is not really the selling price.

Show us another industry that establishes a pricing structure for its main product, publishes it online, feeds it to informational websites, posts it on a board in the store, and then completely ignores it when making the sale. Although this practice appears to be contrary, divergent thinking, it’s standard operating procedure for most FBOs.

When discounts are freely given to fuel brokers, base customers and transient customers, who’s left? At the end of the day, heavy discounts have eaten into the margins that were built into the posted price.

Pricing studies indicate that discounting posted prices may gain more customers but in the long-run the business is less profitable. “Making it up on volume” is a phrase we’ve all heard but this seldom works, especially in a very niche market like the FBO industry where the number of daily transactions is counted in tens instead of hundreds or even thousands.

Threaded below is an example of what a business needs in terms of additional customers to breakeven when a discount is given.

Before the Price Discount with 1,000 customers:
- Price per unit: $200
- Cost per unit: $150
- No. of customers: 1,000
- Gross income: $200,000
- Direct Costs: $150,000
- Gross Profit: $50,000

After the Price Discount with an additional 250 customers:
- Price per unit: $190
- Cost per unit: $150
- No. of customers: 1,250
- Gross income: $237,500
- Direct Costs: $187,500
- Gross Profit: $50,000

That’s an extra 250 customers you’ll somehow need to woo with your new low prices, just to stay even!!!

In the FBO industry, we’ve encountered many FBOs who have lost price-sensitive customers but have become more profitable by selling higher margin fuel on fewer transactions. 

If the math does not convince you to be very cautious with discounting, consider these facts concerning price buyers:

• They are the least loyal customers.         
• They complain more than premium price buyers.         
• They expect more than premium buyers.     
• They take up more of your time and distract from the time you need to spend with premium price buyers.         

FBO operators should keep these concepts in mind as part of the planning and management of the enterprise. Remember, a 5 percent discount will require the FBO to pump at least 20 percent more gallons just to maintain anticipated profit. The question is, where will you get these customers?

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Give Customers Your Best Cheese!

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

At the recent NATA FBO Success Seminar, we had a roundtable discussion where attendees shared their best practices in delivering a good customer service experience.

We called the session “What’s Your Cheese?”

If you are a regular reader of our AC-U-KWIK FBO Connection blog, you know we’ve developed a customer service training program called Don’t Forget the Cheese!©. It’s a fun, memorable program developed specifically for aviation service companies who want to improve their service experience.  (Click here for the link to a past blog which explains the origins of the program and provides further background.)

As part of the training, we challenge FBOs to compete on customer service, not on price. One of the best ways to compete on customer service is to make your customer service experience uniquely unique. In other words, no one else can duplicate exactly what you do in the way that you do it. It’s unique to your style, your very own way in which your FBO delivers your customer service experience.

In a way, it’s your exclamation point! And it’s the answer to the question, “What’s Your Cheese?”

Threaded below is a sampling of what the NATA FBO Success Seminar attendees shared when asked, “What’s Your Cheese?”  Here’s what they said:

• Our crew cars are unique. We even have an old police cruiser that’s very popular. A lot of get up and go!
• Our cheese is developing a home atmosphere, relaxed and comfortable.
• We send hand-written thank you notes and remember our customer’s birthdays.
• Customers, as well as employees, look forward to our quarterly barbecues.
• Our flying Santa is our cheese. It’s unique to us. Each Christmas we tow it around.
• We have a GPS in every crew car, preloaded with eating and entertainment destinations.
• The piano in our lobby is a good example of our cheese and providing something extra. We invite musicians to play for the entertainment of our customers during a busy ski season.
• Repeat customers are greeted with a big hello and we make it a practice to remember their names. That’s adding some good cheese.

To further this discussion, we’d like challenge you to share "what’s your cheese." Simply give us your best cheese at the end of this blog and check back often to see what others have written.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Keep Your Fuel Margins Closer

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

Last week, our blog post discussed how keeping your customers close by diffusing disputes at the point of transaction made for good business. For this post, we’ll discuss how keeping your fuel margins closer makes good business sense. It’s really kind of a parody of the famous line from the film, “The Godfather: Part II,” “Keep your friends close and your enemies closer.”

At first blush, keeping your customers close and your margins closer are two axioms that don’t seem to go together. What does one have to do with the other? The answer is simply that each day FBO operators must keep their fingers on the pulse of their operations. Keeping customers happy is just as important to the bottom line as keeping track of fuel margins and managing closely what’s in the tank.

As we all know, a healthy fuel margin is hard to come by these days. On one hand you have savvy aircraft operators who fly more fuel-efficient aircraft, tanker fuel from their own fuel farms and ask for aggressive fuel discounts when purchasing fuel.

On the other, you have the fuel brokers with their own sets of customers, negotiating significant  fuel discounts off the posted price and taking a piece of the action while cutting deep into your margin.

And then there’s the airport authority wanting to increase into-plane fees while planning to add another competing FBO at the airport, even though fuel sales have been relatively flat for the past seven years.

Sound familiar? It’s enough to make most FBO operators say, “Enough is enough!”

FBO operators should know and manage the cost of each fuel load that is in the tank farm and be able to adjust their posted price accordingly while remembering to keep their target margin consistent.

Therefore, this should be your daily mantra, “Today, I will keep my customers close while remembering to keep my fuel margins closer.” It’s just good business sense.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Tip of the Week: Keep Your Customers Close

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

In today’s competitive FBO working environment, there is perhaps no greater challenge than keeping your customers close and your fuel margins closer. For this blog post we’ll discuss the former with a follow-up blog next week regarding fuel margins.

At the NATA FBO Success Seminar in March, attended by more than 30 FBOs and sponsors from throughout the U.S. and Canada, we discussed how to attract customers and what you can do to keep them coming back.

One disturbing statistic we reviewed was that consumer research indicates that only one in 25 dissatisfied customers will actually tell you there is a problem. The rest leave without saying a word, perhaps never to be seen again.

That’s why it’s important to train your employees to develop a sixth sense in order to recognize when a customer has a bad service experience. You don’t want a customer leaving your FBO without resolving a dispute. 

One of the keys to a successful customer service experience is to empower FBO employees to resolve all disputes at the point of transaction before a disagreement can blossom into something quite ugly. This is an important element we stress in our Don’t Forget the Cheese customer service training program.

We believe that taking care of customer disputes on the spot will turn an unfortunate transaction into a successful transformation, where both the customer and the employee have a chance to resolve an issue, find a solution and bond in the process. It can be a very cathartic experience.

Keeping your customers close is good business. Next week, we’ll discuss how keeping your fuel margins closer is good business sense.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. For more background, visit the biography page or www.absggroup.com.

FBO Success Seminar Provides Strategy and Networking

John Enticknap discusses lease agreements at the 2015 NATA FBO Success Seminar in Las Vegas.Ron Jackson and John Enticknap presented the NATA FBO Success Seminar in Las Vegas on March 9-10.

NATA posted additional photos on its Safety 1st Program blog.

Tip of the Week: Make Your FBO Data Driven

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

Just as pilots rely on the instrument panel to keep up and stay ahead of potential problems, FBOs should rely on data-driven dashboards to do the same thing.

Operational and financial data fed on a regular basis to the FBO operator is an essential element of running a successful business. They’re a quick snapshot you scan to make sure the engine of your company is running smoothly.

Setting up a dashboard is similar to a pilot setting up waypoints. You preselect the data you want to see and have it delivered to your desktop on a daily basis.

Here are some suggested data points to set up on your dashboard:

Line Service Business

• Review your previous day’s retail fuel sales.
• Contract Fuel Sales.
• Airline Fuel Uplift.
• Month-to-Date retail fuel sales.
• MTD Contract Fuel Sales.
• MTD Airline Fuel Uplift.
• Budget retail fuel sales, contract and airline fuel sales.
• Number of Customer Contacts Yesterday.

Maintenance Business

• Mechanic Hours Billed yesterday.
• Mechanic hours of vacation, paid leave.
• Mechanic hours paid.
• Yesterday Mechanic Productivity.
• Month-to-Date Productivity.
• Budget Productivity.
• Parts Sales Dollars.
• Budget Parts Sales.
• Support Staff hours paid.
• Number of Customer Contacts.
•  Number of annuals/100 hr./inspections bid.

Flight Operations

• Flight Instructor hours billed yesterday.
• Flight Instructors hours paid.
• Flight Instructor Productivity.
• Charter hours billed.
• Charter hours available.
• Charter Productivity.
• Customer Contact - Flight Instruction.
• Sale Contacts for Charter.

You’ll notice we are getting sales data, labor data and marketing data. After cost of sales, labor is your biggest expense. Labor hours must be reviewed and managed to assure you maximize productivity.

Also, you must keep track of your marketing activity. This is something you should touch on daily, focusing on both retention of existing customers and obtaining new customers. We know this is stating the obvious, but if you don’t grow, you go out of business. Every year there can be as much as a 30 percent churn in turnover of base customers and regular transient customers.

In setting up your dashboard data requirements, make the adjustments with your accounting personnel as well as department managers to collect this data.

If you are uncertain as to how to set up a dashboard properly as well as the interpretation of the data, we suggest you attend an NATA FBO Success Seminar. The next seminar is scheduled for March 9-10 in Las Vegas. At these seminars we suggest a number of simple strategies and tactics to assist you with data management.

FBO Success Seminar: Take Time to Sharpen Your Axe

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

“Give me six hours to chop down a tree, and I will spend the first four sharpening the axe.”

          -Abraham Lincoln

FBO operators, managers and supervisors often find themselves dealing on a daily basis with situations that need immediate attention. These are the bugs and gnats that creep into our schedule unannounced and take away from quality time needed for planning, preparation and, quite frankly, sharpening the axe.

As Abraham Lincoln so wisely put it, work goes a lot easier if you take time to hone your tools. In the case of the FBO manager and supervisor, that’s time spent in keeping abreast of the FBO industry by learning new strategies and tactics that will move your business forward and help you focus on the things that matter most. 

That’s why we’ve dedicated this blog to providing tips that help in three key areas of FBO operations:

• Maximizing Profits.
• Reducing Expenses.
• Improving FBO Productivity & Bottom-Line Performance.

In 2008, we teamed with the National Air Transportation Association (NATA) to develop a comprehensive two-day FBO success seminar. The original training syllabus was based on our proprietary 10 Steps to Building a More Profitable FBO.

Now we are starting our eighth year in conducting this seminar, which has evolved over time and provides an opportunity to sharpen the axe.

A key session is titled Don’t Give it Away! In a nutshell, this means that FBO operations need to take a close look at all the things they are giving away on top of demands from customers and third-party fuel providers to discount fuel prices.  

An important takeaway is that every aircraft operator that arrives on your ramp must contribute to your revenue stream, even if they don’t buy fuel. That’s why we are seeing an emergence of facility fees and other fees to help FBO operations become and stay profitable.

Please take time to sharpen your axe and join us at our next NATA FBO Success Seminar, March 9-10 in Las Vegas, as we discuss these types of key issues in detail.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. For more background, visit the biography page or www.absggroup.com.

Great Customer Service. The Universal Language Spoken Everywhere.

John Enticknap, Charlie Bodnar and Ron Jackson with Euro Jet agents in Prague

By John L. Enticknap and Ron R. Jackson
Aviation Business Strategies Group

Recently we were approached by Charlie Bodnar, the CEO of Euro Jet, to see if we might be interested in teaching our Don’t Forget the Cheese!© FBO customer service training program at their Global Network Forum scheduled for January in Prague. Euro Jet is a leading international provider of both flight and ground support services.

At first, we were a little concerned our Americanized content would possibly lose some meaning half way around the world in a very different culture. However, our fears were quickly erased as Charlie explained that more than 60 percent of Euro Jet’s customers were U.S. based flight crews.

“It may sound crazy teaching our people American service standards,” Charlie asserted when we met in October at the Annual NBAA meeting in Orlando. “But this market is very important to us and we want to make sure we meet our customer’s expectations.” 

So on Jan. 12 we packed our bags and headed to Prague. We were still a little unsure if we would be able to adequately communicate the principles of our program that’s been popular in various parts of the good old U.S. of A. but had never stood the international test on the other side of the pond.

Upon arrival, we met with Zaneta Balochova who handles marketing at Euro Jet. She was quick to put us at ease as we were given a preview of the room in which we would be teaching at the historic Boscolo Hotel near Prague’s Old Town.  As the agents began to filter into the room, we started to chit chat a little and practiced pronouncing their names.

There was Ulrika from Estonia, Marian from Bulgaria, Eugenijus from Lithuania and Robert from Macedonia, among many others. We were immediately impressed by their command of the English language, although not altogether surprising since English is spoken throughout the international aviation community. Still, the little nuances that started to creep into our mini conversations gave us encouragement that we would be understood well beyond the basics.

What was most interesting is how these agents, some 70 of them from 20 countries in Europe and Asia, learned to speak English. Several we talked to said they watched and studied subtitled American movies, repeatedly, practicing the English dialogue over and over again. Now that’s dedication!

However, the universal language that brought us all together was customer service. Here we found middle ground, striking a common chord that resonated throughout the entire room.

The agents quickly understood that the objective of providing excellent customer service was to gain a long-term, profitable customer relationship. Just as we teach in our NATA FBO Success Seminar, they promptly recognized that the surest way to differentiate their brand from the competition was by offering a great customer service experience.

They also embraced enthusiastically the true test of whether a great customer service experience was achieved by asking one simple question of the customer upon departure: “Would you recommend us?”

We can tell you, unequivocally, that we would recommend the good folks at Euro Jet … in a heartbeat. Not because we were their guests and taught them the American way. Rather, and most importantly, it’s because they got it. They intuitively understood that providing great customer service is a universal language, appreciated and understood by loyal customers anywhere in the world.

For a compelling Euro Jet perspective of our training experience in Prague, we invite to read a companion blog written by Gareth Danker, Director of Global Sales and Marketing. Please click here for content.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. For more background, visit the biography page or www.absggroup.com.

Flight Training Programs Benefit from Out-of-the-Box Thinking

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

This article from the archives analyzes how FBOs with flight training programs can make the most of their flight schools as aviation services become more specialized and while the pilot population is declining. It was originally published on March 24, 2011.—Ed.

“He who would learn to fly one day must first learn to stand and walk and run and dance; one cannot fly into flying.” – Friedrich Nietzsche, 1844-1900

Friedrich Nietzsche, a controversial philosopher for his time, made this statement before the Wright Brothers even flew, so we may assume he was not referring to the business of training people to fly. However, this quote has much relevance to our FBO flight training activities today.

It wasn’t that many years ago that the majority of FBOs were defined as “full-service companies” offering flight school training, new and used aircraft sales, charter, maintenance, hangars, and terminal facilities.

The business model was to market to potential pilots, both professional and recreational, train them, sell them an airplane, hope they would trade up, maintain the airplane, hangar it and, of course, sell them fuel and various services. As the pilot grew in experience and need, the FBO could make a good living by selling the next biggest aircraft.

It was a cradle-to-the-grave concept, and it seemed to work just fine.

The Changing FBO Business Model

However, in the last 30 years, the business of running an FBO has become much more specialized. It has evolved to the point that a full-service FBO is almost nonexistent. We now have businesses that have become SASOs (specialized aviation service organizations) that specialize in primarily fuel, line services and real estate management.

On one hand, I believe this has been a healthy trend for the industry because it allows the owners to specialize in a narrow facet of the FBO business based on their particular talents and knowledge.

On the other hand, this trend has taken the emphasis away from developing a growing pilot population. The growth of aviation is directly tied to maintaining a high interest in training new pilots. The pilot population topped out a number of years ago and has been declining ever since.

We hear all the usual arguments: high cost (by the way, it has always been costly to learn to fly), poor flight instructors, old slow aircraft, etc.

Because many FBOs have chosen not to provide flight school training for whatever reason, an important resource is vanishing in many communities.

That leaves primarily the specialized schools to fill the void. We have a few national chain flight schools, those schools specializing in instrument training and individual schools that target specific market segments. These segments may include foreign students, those interested in recreational flying, Type A business executives with the means and motivation, and colleges, as well as others.

Pilot Retention

Besides attracting new pilots to enter a flight training program, one of the major problems flight schools have is retaining the interest of the pilots throughout the process. Historically, there is a drop-off after soloing and again after finishing training.

When a new pilot, be it a private pilot, recreational pilot or even those who are starting a piloting career, passes the final flight check, the big challenge for the flight school is to keep this new pilot coming back for more advanced training. This is when the flight school owner, instructors, staff — the whole team — needs to think outside the box and get creative in the area of retention.

In other words, they need a dynamic marketing plan to develop pilot-specific programs to grow the new pilot, keep the interest level up, improve skills and generally have fun. Remember, for the most part, you are competing for discretionary dollars, which can go for flying, boating, golf, sport cars, etc. Here are some ideas for keeping pilots at your flight school:

• Have pilots join the Wings Program, a pilot proficiency program that can be taken online as well as flying. Sign up at www.FAASafety.gov to create your own account, and educate your flight instructors. See the new Advisory Circular AC 61-91-J.
• Tail Wheel endorsement: This will make your new pilot a better pilot.
• Trip to ATC Facilities: Great for IFR and instrument rating trainees.
• Trip to Altitude Chamber: This is good for all pilots.
• Flight Reviews: Both VFR and Instrument Proficiently Check. Find the Instrument Proficiency Check (IPC) Guidance publication at  www.FAASafety.gov.
• Weekend Ground Schools.

What’s most important is how you market these programs. You need to have a customer base from your existing pilots, a database of the existing pilot population from a radius of 200-300 hundred miles, advertising in the local/regional aviation publications, an e-newsletter campaign, social media presence and a sustained community outreach to the interested pilot population. All this should be part of your original business and marketing plan.

So what can Friedrich Nietzsche teach us? For all successful business enterprises, we “must first learn to stand and walk and run and dance” before we can fly. And how do we fly? We develop and use a well-matured business plan, spend some time thinking creatively with the team and remember to add a little fun along the way.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

Originally Published on March 24, 2011.

Results of Our Annual FBO Industry Survey Predict 2.5% Average Fuel Sales Increase for 2015

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

This week at the NBAA Schedulers and Dispatchers (S&D) Convention in San Jose, CA, we will release the results of our Annual FBO Industry Survey and Forecast for 2015.

We are happy to report that for the first time in several years, we’re seeing a glimmer of optimism amongst the majority of FBO owners and operators we encounter and are included in the survey. In a nutshell, the results indicate a current market that has yet to catch any real traction but also one that is being approached with guarded optimism with more than 60 percent predicting an average increase in fuel sales of at least 2.5 percent. (See related chart.)

This projection follows another year when fuel sales were depressed with the majority reporting an actual decrease in sales in 2014.

Overall, the outlook for 2015 shows a perceptible increase in optimism compared to the results from the 2014 survey where the majority of respondents predicted at least a breakeven marketplace with only about 40 percent projecting an increase in fuel sales volume.

Conversely, in our 2015 survey, more than 60 percent predicted an increase in fuel sales, which represents a positive upswing of 20 percent.

As far as forecasting confidence in the economy, the majority of survey respondents moved from having little or no confidence in 2014 to a comfortable middle ground position in 2015. Last year, the majority said the economy was not moving in the right direction. For 2015, most said they are undecided. Again, we see this is an indication of guarded optimism.

In what we call our high-water benchmark, 18 percent of those surveyed this year said they predicted an increase in fuel sales of 5 to 8 percent. This compares to 10 percent responding to the same question in 2014. And for the really strong performers, 8 percent of respondents said they expect an increase in fuel sales of more than 8 percent, which is the same result for last year’s survey.

An added question to this year’s survey queried respondents on whether the recent decrease in oil prices has affected the number of aircraft flying into their FBO. An overwhelming majority said the amount of traffic has remained about the same.

What we saw in the comment section of our survey is a general observation that piston aircraft owners and, in particular, the weekend enthusiasts are starting to fly more with lower posted avgas prices. Also, many who responded indicated that aviation fuel prices will not come down as quickly as auto gas because there is still a lot of higher priced fuel in inventory at airport storage facilities.

In looking at flight hours flown by general aviation and business aircraft, which we know is a key statistic linked to potential FBO fuel sales, the numbers continued to be flat in 2014. As a result, we really don’t see flight hours increasing in the short term, even though fuel prices are coming down.

Based on our survey findings, we forecast aviation fuel prices continuing to drop throughout 2015 with no appreciable increase in flight activity until the third quarter.

If you are attending the S&D Conference, we would like to see you so please stop by the ACUWKIK Booth #1723. Also, please attend our special Exhibitor Session at 5:15 pm in the Exhibit Hall.

In addition, there will be a drawing at the National Air Transportation Association (NATA) booth #1511 for a free registration for our next NATA FBO Success Seminar scheduled for March 9-10 in Las Vegas. Registrants will receive a free copy of our new book, FBO Survival! 10 Tips to Keep Your Operation Lean, Mean and Profitable. The free registration and book are valued at more than $700.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

Visit FBO Connection Bloggers at 2015 Schedulers & Dispatchers Conference

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

The team at Aviation Business Strategies Group and FBO Connection bloggers, John Enticknap and Ron Jackson, will be attending the 2015 NBAA Schedulers & Dispatchers Conference next week in San Jose, Calif., and would love to touch base.

We’ll be conducting the Preconference Exhibitor Session on Tuesday, Feb. 3, at 5:15 p.m. in the Convention Center Exhibit Hall that will include a brief overview of our Annual FBO Industry Survey for 2015. Many of you have participated in this survey, and we thank you very much. We think you will be a little surprised at the results, so we encourage you to attend.

During the S&D Conference, please visit the AC-U-KWIK booth — 1723, 1725 and 1727 — and take a peek at our new ebook that is coming out: FBO Survival! 10 Tips to Keep Your Operation Lean, Mean and Profitable.

Also, please save the dates of March 9-10 for our acclaimed NATA FBO Success Seminar at the Sands Convention Center in Las Vegas. We hope to see you there as well.

Lastly, we’d like to thank the good folks at Euro Jet for having us as guest speakers at their training event in Prague on January 14 and 15. They are a great group of people, and we enjoyed bringing our Don’t Forget the Cheese! customer service training program to this part of the world.

See you at SDC2015.

John and Ron

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

FBO Operations Tip of the Week: Differentiate Your FBO on Customer Service, Not on Price

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

Note: Join John and Ron at NBAA Schedulers & Dispatchers Conference. Full details.

Many FBOs have gone out of business by lowering their prices during prolonged periods of time. Yes, FBOs need to be price-competitive, but they must maintain healthy margins and find other ways to compete through differentiation.

One of the best ways we find to differentiate one FBO from another is to offer an outstanding and memorable customer service experience. This is a fundamental shift in the FBO industry away from a price-sensitive business model to one based on providing exceptional customer service.

More and more FBOs are taking customer service training very seriously. Just as FBOs don’t tolerate mishaps on the ramp, they are becoming more conscious of eliminating miscues with the way they deliver customer service.

Research indicates that loyal customers don’t stop doing business with a company solely because of price, but rather because of a poor customer service experience. However, most will return if you recognize and fix the problem.

One of the ways to improve the customer service experience is to standardize training and look for ways to motivate employees in a way where they take ownership of problems when they arise. An example of a standardized training system is the Don't Forget the Cheese! customer service training program written specifically for the FBO industry.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Operations Tip of the Week: Cross Train and Involve all Employees in the Customer Experience

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

For most FBOs, employees must learn to multitask. In evaluating FBOs that are consistently successful, we find employees do many different job functions that result in not only a more efficient operation but it actually helps employee morale and adds to the customer service experience. As we like to say, a happy employee, a happy customer.

The result can be a very contagious working environment that gets noticed by the customer. Plus, cross training makes all employees more valuable and better motivated.

Here are some ideas:

• Train your CSRs to meet and greet arriving aircraft. You’re probably already paying the workers’ compensation rate for ‘ramp’ on the CSRs. 

• Train your CSRs and building maintenance staff to be wing walkers. Tip: Having two wing walkers, especially in hangar movements, can decrease your accident incident rate and could help lower your insurance premium. 

• Get your accounting staff outside to learn about fueling and tank farm quality control. They might even learn about fuel quality control and inventory procedures. 

• When was the last time the executive staff worked the ramp or talked to arriving pilots and passengers? 

• Encourage ramp staff and the executive staff to walk the ramp for FOD and look at the FBO facility from the arriving pilot’s point of view. 

• Consider having your A&P technicians meet, greet and take part in the customer’s maintenance project experience. Once the inspection is completed, the A&P should be part of the discussion with the owner on what is to be fixed. This seems obvious but is rarely done. 

• In your flight school, when was that last time your chief instructor called and talked to the students before a check ride? Find out how the student likes flying and the overall learning experience.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Operations Tip of the Week: Maximize Your Profit Position

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

As FBO operators and managers, one of the most important tasks to keep in mind is maximizing your profit position.

In order to accomplish this, we rely on a standardized fuel pricing method. We think it is fair to say most FBOs use either cost-plus pricing or mark-up pricing. Cost-plus means you want to make a certain “plus” above your cost. For example, your cost today is approximately $2.25 per gallon and you want to make $1.50 per gallon. Therefore, simple math puts the selling price at $3.75 resulting in a profit of 40 percent  on sales. 

For a mark-up pricing example where you want to make $1.35 per gallon, your selling price would be $3.60 per gallon, or just short of a 60 percent mark-up on cost.

Both of these methods are common in the manufacturing business arena. The variance in these two methods lies in the difference between margin and mark-up. This can be a lengthy discussion, but suffice it to say, a thorough understanding of your costs of operation to include labor, facilities, other income, overhead, etc., affects what margin you use to show a profit. This, in turn, allows you to calculate what mark-up percentage you must use to get to the intended profit level.

We discuss these fuel pricing methods in greater detail at our NATA FBO Success Seminar, which is scheduled for March 9-10 at the Sands Expo and Convention Center in Las Vegas. 

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Operations Tip of the Week: With Fuel Prices Falling, Guard Your Optimism

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

 
As the price of auto gas falls almost daily, we wonder how the corresponding drop in Jet A fuel might affect the FBO business.

Just four weeks ago, OPEC indicated they would stabilize a barrel of oil at $60. Currently, a barrel of oil is hovering around $54. Comparatively, at the beginning of 2014, index pricing for Jet A was around $3 per gallon. In December we saw roughly $1.60 per gallon resulting in a $1.40 swing. 

This begs the question: Will aircraft operators take advantage of lower fuel prices and start flying more resulting in more gallons being pumped at FBO locations?  

Based on our research and other industry discovery work, the answer is no, at least not in the short term. 

For the most part, flight departments, with FBOs following suit, have adapted over the past few years to what we call the new normal. While operators have right-sized their aircraft fleet and supporting flight crew personnel, FBOs have resized and streamlined their operations to meet the corresponding demand.

That’s not to say the industry will not benefit in the long term by lower fuel prices. Certainly, if lower fuel prices persist and the result is a more robust economy, aircraft operators will make the necessary adjustments by adding capacity and flight scheduling flexibility.  

But let’s not get ahead of ourselves. Just as it took months, even years, to get where we are now, the effects of an economic recovery on businesses operating aircraft will be slow to take place.

In the next few weeks, we will conduct our Annual FBO Industry Survey, which examines both past years’ performance as well as a look at current trends and predictions for 2015. In addition, we will probe FBO owners and operators to get a feel for their confidence in the economy going forward. 

In the meantime, lower fuel prices will give us at least a temporary reason to be optimistic. However, we can expect a continued sluggish market into the first quarter of 2015 with perpetual swings in fuel pricing and no appreciable increase in flight hours.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Connection Featured in B&CA Digest

By John L. Enticknap and Ron R. Jackson, Principals of Aviation Business Strategies Group

- Facilitators of NATA’s FBO Success Seminar and Authors of the forthcoming book: FBO Survival: 10 Tips to Keep Your Operations Lean, Mean & Profitable

 
We would like to welcome B&CA Digest readers to our blog, FBO Connection. Since our first blog post in 2011, the FBO Connection has been a source for discussion, ideas and general conversation on the FBO industry where you’ll find regular contributions from seasoned FBO professionals sprinkled with bits of wisdom and peppered occasionally with some hot topics. We like to call it “Sage Advice for the FBO Community.”

The content of the FBO Connection varies with each post and is written as a source of information for not only owners, operators, managers and supervisors but also for practically any FBO employee. In fact, we’ve received feedback from FBO operators who say they print our blogs and post them in the FBO for all employees to read. “It’s like taking a course in how to run a more successful FBO operation,” one regular reader commented.

With each blog post, we’ll peel back the onion to reveal what we consider to be seasoned FBO insider knowledge. Many topics fall out of our proprietary 10 Steps to Building a Profitable FBO, which forms the basis for our NATA FBO Success Seminar.

Included will be winning strategies and tactics you can put to use immediately and, over time, in the operation of your FBO. Subjects range from leases, minimum standards, reducing your cost of business and operating more efficiently to managing your fuel pricing/margins, finding “free money” hidden in your operation and competing on customer service, not price.

As we prepare for 2015, we’ll be busy blogging about upcoming events that affect the FBO industry. Here is a rundown on some of our forthcoming activities and educational opportunities:

• Jan. 15: Our Annual FBO Industry Survey and Forecast. Each January we conduct a survey of more than 500 U.S.-based FBOs to determine the overall health and direction of the FBO industry. With this information, we write a report and issue a news release stating our findings while providing a forecast for the coming year.
• Feb. 3: NBAA Schedulers & Dispatchers Conference, San Jose, Calif. Join us at 5:15 p.m. in the Conference Hall as we conduct the Pre-Conference Exhibitor Meeting. Here we’ll discuss how to get the most out of your booth presence at the S&D conference and why “adding a little cheese” can enhance your exhibit investment.
• March 9-10: NATA FBO Success Seminar, Las Vegas. Each year this seminar gets bigger and better as we cover in detail the essential elements in building a more successful FBO operation. For a complete overview of the topics we discuss, click here.

We look forward to reaching out to you through this blog and connecting on everyday issues that affect the bottom line of your FBO operation. If we happen to hit on a subject you’d like to comment on, or if you want us to address a certain issue, please let us know by sending an email to John Enticknap at jenticknap@bellsouth.net or Ron Jackson at rjacksongroup@earthlink.net.

One thing is for certain, we’ll add a little spice to your FBO life and maybe some sage advice along the way.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s B&CA Digest. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518, www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s B&CA Digest titled: The FBO Connection.  Ron@thejacksongroup.biz,  Ph: 972-979-6566, www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Best Practices Series #9: Charge for the Free Stuff

By John L. Enticknap and Ron R. Jackson, Aviation Business Strategies Group - ABSGgroup.com 

- Authors of the forthcoming book: FBO Survival. 10 Tips to Keep Your Operations Lean, Mean & Profitable.

Welcome to our blog series on FBO Best Practices. With each blog post in this series, we’ll discuss “Best Practices” in running an efficient and effective FBO operation.

Best Practice #9: Charge for the free stuff. This is a simple reminder that every customer must contribute to your revenue stream, even the reluctant customer who doesn’t buy fuel.

The FBO business model that we’ve enjoyed for the past 50 plus years is dying a slow but inevitable death. If your FBO is still trying to exist on the margin charged on fuel sales, this is your wake up call.

In the “salad days” of our business, a healthy fuel gross margin of $2 per gallon or more would cover an FBO’s monthly expenses including the airport lease, insurance, facility upkeep and renovations, expansion, utilities, employee wages/compensation, fees and taxes, not to mention all the free stuff flight crews have come to expect.

But a $2 margin, normally factored into a posted price, is no longer realistic. No customer buys fuel at the posted price. It has been eroded over time by:

• Change in fuel buying habits by aircraft operators.
  - Pre-negotiated fuel purchasing.
  - Calling ahead for best discounts available.
  - Changing plans to get the best overall fuel purchase cost.
• No fuel required by operators.
• - Purchase of more fuel efficient aircraft.
  - Utilizing fuel tankering models.
  - Pre-established fuel points.
  - Better ATC routing for weather & flight planning to minimize costs.

• Fuel brokers negotiating lower fuel prices.
• Rising regulatory costs.
• Higher flowage fees charged by the airport.
• Increases in operating and insurance costs including liability, workman’s comp, health insurance, war risk, etc.

Note: An average sized FBO can have insurance costs as high as a $1,000 a day.

A Morphing Business Model

At the recent NBAA Conference held in Orlando, Florida on October 21-23, our company, Aviation Business Strategies Group (ABSG), was asked to facilitate one of our NATA FBO Success Seminar educational sessions titled: Get Ready for a New FBO Business Model.

A standing-room only crowd of aircraft operators and FBOs packed the session and took part in a lively follow-on discussion on how FBOs need to change the way they charge for services in order to continue providing first class facilities and great customer service.

The premise we presented is simple. As in the European FBO business model where services are unbundled, every aircraft operator that taxis onto your ramp must contribute to your revenue stream whether or not they purchase fuel.

Many FBOs have taken initial steps in this direction by imposing a ramp fee and/or a facilities fee. In general, these fees are normally waived if operators purchase a qualifying load of fuel.

However, many ancillary services are still being given away regardless of the selling price of a gallon of fuel. Aircraft operators expect baggage to be loaded and unloaded by the FBO. They expect trash service and galley service with ice and coffee. They may even expect free GPU and lavatory services as well as free towing, parking, tie downs and aircraft placement for departure. They also expect concierge services including taxi, limo and rental car logistics.

Then there are the clean restrooms, free coffee, popcorn and snack bar. Many FBO facilities offer a variety of crew lounges, rest areas, quiet rooms, computers, printers, Wi-Fi, copy, fax, flight planning, crew cars, and the list goes on.

As mentioned, gone are the $2 gross fuel margin days and selling fuel at the posted price. With all the customer and fuel broker pressures to discount fuel, gross fuel margins can get as low as $1.25 to $1.40 per gallon with some FBOs dropping to less than a $1 per gallon discount on contract fueling.

What aircraft operators don’t realize is when margins get this low, something has to give. Facilities fall into disrepair, customer service declines, dissatisfaction and disputes follow. No one wins in this scenario.

The New FBO Business Model

Since no FBO wants to be the first to start charging for unbundled services, what we at ABSG propose is a three-tier system.

Tier One: Full Service Pricing
Pay the full service posted price and get all the services thrown in.

Tier Two: Basic Fuel Service with À La Carte Pricing
Pay a discount off posted or a contract fuel price. Then pay for all the ancillary services requested. If no ancillary services, then also pay a facilities fee.

Tier Three: No Fuel Purchase
Pay a ramp fee, facilities fee and à la carte pricing for ancillary services requested.

At our NATA FBO Success Seminar, we discuss these issues in depth as well as a comprehensive examination of FBO operations, marketing, training and best practices. The next NATA FBO Success Seminar is schedule for March 9-10, at the Sands Expo Center in Las Vegas.

Tell us what you think—we appreciate your comments and thoughts. Also Like us by clicking the link below.

Send us an email to Ron@thejacksongroup.biz or jenticknap@bellsouth.net and visit us online at www.ABSGgroup.com.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s AC-U-KWIK Alerts. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518 www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s AC-U-KWIK Alerts titled: The FBO Connection.  Ron@thejacksongroup.biz  Ph: 972-979-6566 www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Best Practices Series #8: Take Time to Develop Your Business Plan

By John L. Enticknap and Ron R. Jackson, Aviation Business Strategies Group - ABSGgroup.com 

- Authors of the forthcoming book: FBO Survival. 10 Tips to Keep Your Operations Lean, Mean & Profitable.

Welcome to our blog series on FBO Best Practices. With each blog post in this series, we’ll discuss “Best Practices” in running an efficient and effective FBO operation.

Best Practice #8: Planning, budgeting and sales forecasting. It’s not exciting; it’s not fun; but it’s essential to running a successful FBO operation.

Peter Drucker wrote, “The manager’s job is to keep his nose to the grindstone while lifting his eyes to the hills.”

We’re all guilty of focusing on the day-to-day grind and forget to look ahead and think, “what if?” Especially when the current business climate seems to be sucking us dry. Sometimes we need a little reality check.

Too often we seem to be obsessed with short-term results in our pursuit of business profit and management goals. If you have bankers, they want to see your monthly and quarterly results to make sure you can support your loan document covenants. 

If you’re a public company, you have one eye on the stock market and the other on short-term forecasts. Then you have to listen to critical analysts. “Got to have positive monthly results,” they say.

Now is the time of the year most FBO operators are thinking about what’s going to happen next year. They dream of a 50 percent increase in retail fuel sales, a full maintenance shop, and the end to contract fueling. Now that’s a good dream! Right?

Reality Check

Not so fast. The order of the day is to do a realistic sales forecast that forms the basis for a rational budget. Too many businesses start the planning process based on how much money they are going to spend on budgeted line items. They basically warm over last year’s costs, adjusting here and there.

However, a solid sales forecast drives a solid budget. Base the sales forecast on company history, at least the past two years. Factor in the national and local economy, projected business aircraft flight hours, projected fuel costs, aviation and health insurance. 

The fiscal budget is the short-term plan. Now, look to the hills and update the long-term plan. You might start with an examination of your airport lease agreement: Years left, rent increases, lease extension options, terms of extensions, requirement for major capital improvements. It just might be time to negotiate a lease extension.

Other items to review:  Business expansion plans, new hangar funding, add to charter fleet, new tug and fuel truck, renovating the terminate building.

Problem is, all of these items compete for cash and capital resources. The trick is to provide a balance between producing current positive results and investing in the future.

This can lead to a confusing management exercise where FBOs find themselves switching between visionary goals, intense investment, “performance-oriented” goal setting and/or retrenchment. The larger firms can even find themselves changing management teams.  Instead of keeping their nose to the grindstone, there is too much looking up.

Also, FBO owners must keep in mind that short-term strategies involving cost cuts may be short sighted and will not achieve short-term results or even meet long-term goals. Such as a 10 percent reduction in experienced labor, which can be self-defeating. We’ve even seen FBOs cut hangar rents below costs to attract new customers on the premise and promise of more fuel sales, which never come. 

Our Recommendation

Here is a list of action items we recommend:

• Complete a realistic budget for the coming 12-month period.
• Do reviews of the actual financial results and compare against your budget.
• Develop and use metrics that can be used to measure your business.
• Use dashboard reports to look at your business on a daily basis.

For longer-term planning, ask yourself these questions:

• How do we add value to our services and existing customers?
• Who are our target customers and what is our value proposition to them?
• What additional capabilities can we add to our business that adds value for our target customers?

These are fundamental initiatives for current performance and future investment that should serve as a guide for the near future planning. The results should be more sustainable and the company should not have to sacrifice the future for short-term gain.

At our NATA FBO Success Seminar, we discuss these issues in depth as well as a comprehensive examination of FBO operations, marketing, training and best practices.

Tell us what you think—we appreciate your comments and thoughts. Also Like us by clicking the link below.

Send us an email to Ron@thejacksongroup.biz or jenticknap@bellsouth.net and visit us online at www.ABSGgroup.com.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s AC-U-KWIK Alerts. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518 www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s AC-U-KWIK Alerts titled: The FBO Connection.  Ron@thejacksongroup.biz  Ph: 972-979-6566 www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Best Practices Series #7: Find the Free Money

By John L. Enticknap and Ron R. Jackson, Aviation Business Strategies Group - ABSGgroup.com

Welcome to our blog series on FBO Best Practices. With each blog post in this series, we’ll discuss “Best Practices” in running an efficient and effective FBO operation.

Best Practice #7: Find the free money! From fuel hedging to lowering your credit card interest rates, there’s free money in any FBO operation just waiting to be found.

Wouldn’t it be nice if you could turn over the couch in the customer lounge and find thousands of dollars dropping to the floor instead of nickels?

With more than 35 years of experience in managing and operating FBOs, we’ve learned where to look to find literally thousands of dollars of hidden money that can add significantly to your bottom line.

In fact, we’ve found so much money for our FBO clients that this has become a very popular session we teach at the acclaimed NATA FBO Success Seminar.

Here are the top four places we tell our clients to look:

1. Fuel Purchasing.
2. Credit Card Interest Rates.
3. Insurance Premiums.
4. Fuel Agreements.

Let’s break each of these down.

Fuel Purchasing

Stockbrokers will tell you to never try to time the market. However, when purchasing Jet A fuel, timing and pricing information is critical.

One of the techniques we teach at our NATA seminars is fuel hedging. Without going into a lot of detail, this is basically a process of knowing how aviation fuel is priced in your region and when to make the fuel purchase.

You should start with your last fuel contract negotiation in which you established your index pricing formula. Moving forward, it is important to keep track of the weekly changes in the Platts pricing indexes. This information should be available from your fuel provider upon request. However, obtaining the Platts data on your own requires a subscription, which can be rather expensive.

In lieu of a Platts subscription, you may also keep track of the price of a barrel of oil through USA Today’s Money/Business section or go to IATA-Jet Fuel Price Monitor, which is a free website.

With this type of information, you can purchase your fuel when the pricing changes to your advantage.

Credit Card Interest Rates

We’re sure you’re aware that transactional interest rates for branded credit cards can range all over the place. However, if you are a savvy FBO operator, you’ve done your homework and have trained your CSR staff to ask the customer to pay for their fuel with the card that favors your FBO by offering the lowest rate for your particular fuel transaction.

In some cases, it could be the card issued by your branded fuel provider. The processing interest rate for these cards can be as low as zero percent. With numerous purchases of 100 gallons or more during a 12 month period, this practice alone could save the FBO a significant amount.

However, if the customer does not have the card issued by your banded fuel provider, have the CSR ask for the next most favorable card in terms of the processing rate charged to your FBO.

For cards that have high processing rates, call the card issuing company and ask that the rate be lowered when processing a transaction at your FBO. As a backup, be sure to have some metrics in hand regarding the amount of fuel volume/transactional volume that flows through your credit card system. This information can be used as leverage.

Insurance Premiums

We find that many FBO operators don’t realize they can take steps to help decrease monthly insurance premiums. With numerous FBOs paying as much as $1,000 a day in premiums, any savings on this line item can be significant.

For starters, we coach our clients to write a good insurance story, especially if the FBO is using an insurance company that doesn’t quite understand the FBO industry. A good insurance story should include some of these items:

1. Discussing your training programs.
2. Your lack of accidents and incidents.
3. Establishing and discussing your Safety Policy and Objectives.

It’s also a good idea to establish and maintain a strong working relationship with your aviation insurance broker.

Fuel Agreements

One of our most popular services we offer is helping FBOs negotiate a favorable fuel agreement. Whether it’s with their current fuel supplier or going out for bids, there are many provisions in every fuel agreement that are negotiable and can save the operator both in the short term as well as over the life of the agreement.

Here is just one example. Review and discuss with your potential supplier where your primary and secondary fuel supply terminals will be located geographically in relation to your FBO. The location will affect your transportation cost, which is a negotiable cost. Also, don’t just accept one transportation firm’s fee. There is competition with various carriers for fees, surcharges and timing of deliveries.

Free money may not be easy to find, but it’s there if you are willing to look. Be the savvy FBO operator and know your options.

Tell us what you think—we appreciate your comments and thoughts. Also Like us by clicking the link below.

Send us an email to Ron@thejacksongroup.biz or jenticknap@bellsouth.net and visit us online at www.ABSGgroup.com.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s AC-U-KWIK Alerts. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518 www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s AC-U-KWIK Alerts titled: The FBO Connection.  Ron@thejacksongroup.biz  Ph: 972-979-6566 www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

FBO Best Practices Series #6: Make the Customer Your Fan

By John L. Enticknap and Ron R. Jackson, Aviation Business Strategies Group - ABSGgroup.com

Welcome to our blog series on FBO Best Practices. With each blog post in this series, we’ll discuss “Best Practices” in running an efficient and effective FBO operation.

Best Practice #6: Make the customer your fan by building a team environment designed to differentiate your service from the competition.

We all know what it’s like to be a fan. We have certain things we like and we support our choices by voting with our enthusiasm and our dollars. Maybe it’s the brand of car we drive, a favorite restaurant we frequent or a new movie we went to see.  It also could be a favorite sports team we back.

But the true test of being a fan is if we recommend something to someone else. It’s like putting our reputation on the line.

And so it is with providing excellent FBO services. Loyal customers are very much like a fan. If they like your service, they’ll  keep flying back and vote with their wallet.

So what’s the secret sauce? How can FBOs make customers their fans?

We can sum up the answer this way: Provide a noticeably high-level of service that beats the pants off the competition.

Although consistency is important, the key is to differentiate your brand of service from the FBO next door, across the field or at the nearest competing airport.

The Wow Factor

In past blog posts, we’ve talked about competing on customer service and not on price. That’s just common business sense. We also know FBOs can’t compete or differentiate based on a brand of fuel because fuel is fuel, Jet A is Jet A and Avgas is Avgas. It’s all the same!

The differentiating factor is your secret sauce, the way you deliver the fuel, the maintenance, the parts, the catering, the charter, the flight instruction and even the bill.

And the secret to the sauce are the ingredients: the individual employees coming together, working as a team and providing a noticeably higher level of service. It’s what we call the wow factor.

Customers notice how the entire FBO operation works collectively. They’re either impressed or they’re not. They’re either put into a comfort zone or they’re watching you like a hawk.

Your FBO can have the best, most personable CSR in the country, but if the line service technician and wing walker don’t tow the customer’s $50 million baby just right, all is for naught.

Building a cohesive FBO team can take the human relations skills of being a good coach. The really successful athletic teams all point to a common denominator of having a good environment in which to excel. A good coach will create this environment. A good FBO manager will do the same.

Vince Lombardi, arguably the most respected and revered NFL coach of all time, created a successful environment where his players thrived as a team.

Here is one of his quotes: "Teamwork is what the Green Bay Packers were all about. They didn't do it for individual glory. They did it because they loved one another.”

Good Customer Service Principles

In developing our acclaimed aviation-specific customer service training program, Don’t Forget the Cheese!, we recognized that it’s impossible to separate the requirement for customer service training from the need to build a good employee teamwork environment. One can’t exist without the other.

That’s why we based our integrated teamwork training on discovering the power of ”we.” It’s an interdependent approach to a realization that working together is a lot easier, and a lot more fun, than working individually.

When you combine these two important elements together, memorable customer service training in a dynamic teamwork environment, you truly can create the wow factor.

Here are some basic customer service/team building principles we teach. We hope they inspire you to create your own secret sauce:

1. Add something extra … make someone’s day.
2. Choose your own attitude; be an empathetic listener.
3. Adopt a ‘we’ attitude; play team ball.
4. Be consistent; set high standards.
5. Be flexible; own your mistakes. Be the person who delivers great customer service.

Tell us what you think—we appreciate your comments and thoughts. Also Like us by clicking the link below.

Send us an email to Ron@thejacksongroup.biz or jenticknap@bellsouth.net and visit us online at www.ABSGgroup.com.

About the bloggers:

John Enticknap
John Enticknap has more than 35 years of aviation fueling and FBO services industry experience and has served as president/CEO of Mercury Air Centers, a network of FBOs he grew from four facilities to 21 locations. He has international FBO experience including opening the Royal Aviation Terminal in Kuwait. John has held executive management positions with DynAir Fueling and CSX Becket Aviation and holds a Bachelor of Science in industrial management from Northeastern University. He teaches the acclaimed FBO Success Seminar for the National Aviation Transportation Association (NATA) and is an NATA certified safety auditor. John is the co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He also writes an industry blog titled FBO Connection for Penton‘s AC-U-KWIK Alerts. He is an active ATP and CFI rated pilot with more than 8,100 flight hours; certified in both fixed and rotary wing aircraft. jenticknap@bellsouth.net, Ph: 404-867-5518 www.absggroup.com

Ron Jackson
Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. He has held management positions with Cessna Aircraft, Fairchild Aircraft and Bozell Advertising. Ron developed the strategic marketing communication plan and programs for Mercury Air Centers and consults with numerous FBOs in areas of marketing, promotions and customer service training. He is the author of Don’t Forget the Cheese! The Ultimate FBO Customer Service Experience. and co-author of the forthcoming book FBO Survival! Keeping Your Operation Lean, Mean & Profitable. He is a certified journalist and co-developed NATA’s acclaimed FBO Success Seminar Series. Ron writes an industry blog for Penton’s AC-U-KWIK Alerts titled: The FBO Connection.  Ron@thejacksongroup.biz  Ph: 972-979-6566 www.absggroup.com

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things