Owning an FBO?

[777-2H4]

What's it like to own an FBO? Can you really make money with it as a business, if you have rentals, instruction, fuel, maybe some hangars? Are small local FBO's decent profit makers?

Also....on a related note, is the high price of fuel having a negative impact on general aviation & fixed base operators, since it is getting so expensive to fly?

 

[propsarebest]

Trust me kiddo, it's a total moneypit. Don't even ponder the thought.

 

[mhaleem12]

Owning an FBO

Most folks that you question about starting an FBO don't have any business background whatsoever. You have to find a niche that is different from what other FBO's offer. Example: accelerated training versus traditional route, etc.

 

[777-2H4]

Most FBO's that I see are all doing the same thing. I don't see how one stands out from another.

 

[FN FAL]

What's it like to own an FBO? Can you really make money with it as a business, if you have rentals, instruction, fuel, maybe some hangars? Are small local FBO's decent profit makers?

Also....on a related note, is the high price of fuel having a negative impact on general aviation & fixed base operators, since it is getting so expensive to fly?

I know two brothers whose dad owned a pepsi bottling plant in town who thought they could run an FBO. They are done after a few years. Why don't you ask what their trials and tribulations were, certainly it wasn't the lack of operating capital.

 

[MFRskyknight]

I have a line job at one of the nicest FBOs you'll find anywhere. Red carpet, leather this, marble that, a few bizjets and the occasional airtanker or heavy as customers, people love coming to it. It definitely fills a niche that no one else -- at least not on our field -- can, that is being a really nice "golden age" FBO. Still, I can't conceive of how it makes any profit. It's been open quite a few years and if it hasn't broken even yet, it wouldn't surprise me.

An FBO is the kind of business that works great for someone who already has money. LOTS of it. If you can afford to lose a few hundred G's, go have yourself a ball selling as much fuel as you can to offset the loss and delay your capsizing.

On the other hand, I'm stepping into the business realm myself soon with a restaurant franchise. It's definitely not a "pet business" that I can afford to watch sink, shrug, and walk away from. I'm working to get my plan for it airtight as possible, and I'm still shaking in my boots.

Unfortunately, 99% of startup FBOs will do poorly since most anybody with a) a passion for aviation, b) an insane amount of money, and c) a shred of business sense would wisely put their time and money into more profitable endeavors.

MFR

 

[big_al]

probably the only thing more difficult than making a profit in aviation is making a profit in restaurants. good luck, MFR

 

[MFRskyknight]

Well the way I figure it, people don't have an inherent need to aviate, but they do have to get silly drunk...and hence stumble into my restaurant at 3am to eat.
:beer:

 

[777-2H4]

Ok, maybe I should clarify: Not opening a new FBO, but buying one that is on the market that has an estabilished position at the airport with all the physical assets already in place.

so...why can't people make money in it? Every airport has to have a place that caters to the local GA crowd, right? Certainly general aviation is not a dying sector...is it?

 

[CrimsonEclipse]

If I recall correctly, Cross City, Fla has an FBO/Restaurant/Bar.
There is a combination that seems to work. They even had a
beer drinking pig there. Have a drink, fuel a plane.

What could possibly go wrong?

CE

Then again, in North Perry, Fla (HWO) there is another bar,
MayDay's....same story. Just can't call the bar on the radio :nuts:

 

[smellthejeta]

One thing you have to consider is your profit margins.

I don't think there's a whole lot of $ in flight instruction/aircraft rental. My airport has FIVE FBO's on the field, and none of them do inhouse rentals. And, FWIW, 3 of the 5 FBO's are mom and pop operations, although one guy operates at more than one airport. Of the other two, one is a franchise, and the other is a service center for a well-known manufacturing line.

I'd say the insurance you have to carry (not talking about flight instruction) is humongous. If the FBO typically deals in in piston aircraft, just how much profit do you think you can make selling avgas for $2/gal profit? Realize that on the really dinky pistons, you're uplifting 10-20 gallons at a time. You can do 100 on a baron, but frankly, if you can't do volume, forget it. At the same time, competition for large jet traffic (G4/G5 and the like) drives fuel prices so low that you have to pump A LOT of Jet A to make up for it. If you compare my company's take after wholesale costs are paid, we have to pump 800 gallons of Jet A to our base customers to match what we take on ONE gallon of 100LL at retail price. It's a somewhat apples and oranges comparison because base customers receive a heavily discounted fuel price, but the point remains the same.

 

[Snakum]

Open an FBO?

Just give your money to me instead, and I'll send you a card every year on your birthday and I'll tell everyone I know what a nice guy you are. Your money'd be better spent this way, and I can quit my job and fly fulltime.

 

[gsrcrsx68]

And one more thought. How as a private business are you going to compete with various local government that subsidize airport operations?

In certain areas gov't ensures continueing and consistent operations. If you are one of these businesses, kudus, ride the gravy train. If not and you have any operations like that close to your fbo...uuhhmm...u r screwed, imho.

 

[propsarebest]

Someone hit the nail right on the head, it's the other stuff that really sinks you, I.E. insurance, OUTRAGOUS lease payments for the office/hangar/ramp sapce, credit card fees, fuel franchise fees, etc etc.

Unless you are on a popular G.A. field, you can't possibly make enough money.

There are so many fixed costs involved in just getting the place up and open that makes it not worth it.

 

[CalifDan]

If you compare my company's take after wholesale costs are paid, we have to pump 800 gallons of Jet A to our base customers to match what we take on ONE gallon of 100LL at retail price.

If that were true, why don't I get premium service at all jet centers when I taxi up in my Duchess? They should be making way more money on me than on any Gulfstream, unless he can take on 64,000 gallons of fuel.

 

[Espalda Mojado]

PacoPollo has the right idea. Why not find students and other time builders to work for free in exchange for a little flight time. You can even give them the airplane dry and have them pay for the gas they use.

Cheap labor = Big profits, this country runs on it!

 

[NuGuy]

Then again, in North Perry, Fla (HWO) there is another bar,MayDay's....same story. Just can't call the bar on the radio :nuts:

There's a reason for that...they went out of business a few years ago....

Nu

 

[81Horse]

My grandparents owned FBOs from the late 30s all the way into the 70s. Maintenance, hangars, tie-downs, sales, charters, rentals, instruction -- everything. They retired comfortably well off (but not rich).

Was it the Golden Age of General Aviation? No. It was the Golden Age of California Airport Real Estate. Real estate investments aside, as the old man used to say, "Aviation's a great way to make a small fortune; but you have to start with a big fortune first."

 

[CrimsonEclipse]

There's a reason for that...they went out of business a few years ago....

Nu

ACK!!

Now what will the Pines Police do on Friday nights?

CE

 

[smellthejeta]

If that were true, why don't I get premium service at all jet centers when I taxi up in my Duchess? They should be making way more money on me than on any Gulfstream, unless he can take on 64,000 gallons of fuel.

Ooops. I was smoking something when I wrote that post. Somehow I snuck in some extra zeros. Should have written 8 gallons of Jet A for a base customer per 1 gallon of retail 100LL.

 

[McNugget]

ACK!!

Now what will the Pines Police do on Friday nights?

CE

Call the COPS t.v. film crew and head on out to the Trailer Park on US27.

 

[CrimsonEclipse]

Call the COPS t.v. film crew and head on out to the Trailer Park on US27.

Good point.

CE

 

[Slice121]

Well the way I figure it, people don't have an inherent need to aviate, but they do have to get silly drunk...and hence stumble into my restaurant at 3am to eat.
:beer:

Are you opening a Waffle House?

 

[AC560]

It is fairly easy to make money running an FBO, lots of people post about about good money making FBO's on this board. Those would be the posts about asshole FBO owners and their shoddy maintainence, poor customer service, and the horrible way in which they treat their employees.

If you want to be loved running an FBO you probably won't make any money at it, but I know a couple people who I wouldn't piss on if they were on fire who have made plenty of money doing it.

 

[JediNein]

What's it like to own an FBO?

Hours of pure paperwork boredom punctuated by occasional moments of stark raving terror accented by the knowledge that one single mistake by someone else can cause the loss of the business, your ability to earn a living, and anything you might own.

Can you really make money with it as a business, if you have rentals, instruction, fuel, maybe some hangars? Are small local FBO's decent profit makers?

Having the only fuel service on the field is a good way to do it. Flight instruction and rentals give about two choices - either the dirtiest, sleaziest, and cheapest operation out there OR the absolute top end pristine highest price operation. The middle tends to not break even.

Also....on a related note, is the high price of fuel having a negative impact on general aviation & fixed base operators, since it is getting so expensive to fly?

For the middle folks, yes. For the cheap operations, a little. For the top end operations, no.

Fly SAFE!
Jedi Nein

 

[MFRskyknight]

Are you opening a Waffle House?

I would... but I can't find any 94-year-old cooks with open sores and pendulum boogers, so I guess I'm going to have to settle for hot chicks and falafel.

MFR