Overview
A Fixed Base Operator (FBO) is a facility that provides services related to industrial operations on commercial terms. Providers of such services are usually located at the airport, serving a small group of people with specific requests for business air transportation, rather than catering to the general public. They may be adjacent to the airport or distant, but they may not exist separately.
FBOs vary from airport to airport, but there are invariably several rules that apply to providers of such services. The rules allow private air transportation to be integrated into the airport system while maintaining the comfort of all passengers. There is an agreement between the airport and the FBO based on a lease agreement and a list of services that the FBO can provide at a particular airport.
Fixed Base Operator and Federal Aviation Administration
The Federal Aviation Administration (FAA) is the primary agency responsible for overseeing many FBO activities. In addition, the Department of Transportation provides the link between FBOs and commercial services, but it is the FAA that sets the trends in certification and licensing of private service (Federal Aviation Administration, 2022). The Air Commerce Act in the last century established standards for air traffic regulations and licensing (Federal Aviation Administration, 2021). They allowed the FAA to create an understandable process for certifying and specifying requirements for private aviation.
The FAA has clear delineations of an FBO’s activities and defines it as a service provider. According to the FAA, FBOs are commercial businesses granted the right by the airport sponsor to operate on an airport and provide aeronautical services such as fueling, hangaring, tie-down and parking, aircraft rental, aircraft maintenance, flight instruction, etc. (U.S. Department of Transportation & Federal Aviation Administration, 2006). In addition, the Advisory circular requires FBOs to meet minimum standardization and to comply with a set of documentation published by the U.S. Department of Transportation (U.S. Department of Transportation & Federal Aviation Administration, 2006). It should also be understood that the requirements imposed on airports themselves must also be met by the FBO, as otherwise the airport bears high organizational and operational risks (Federal Aviation Administration, 2022). Consequently, although the Federal Aviation Administration (FAA) only controls a portion of FBO operations, it is the one that can regulate how they operate.
Fixed Base Operator Market
Currently, there is a growing demand for FBO services due to the increase in the number of small and medium-sized aircraft, mostly of a private nature. With the increasing demand for FBO services, policies are required to improve operator and production services in this area. Frequently, FBOs are looking for new solutions in the area of storage and training, as well as refueling, as this is the costliest process (The Insight Partners, 2022). Since aviation hangars have a number of requirements, FBOs are required to ensure that their equipment and facilities are accurately matched to the regulations.
Due to the growing labor market and fierce competitive environment, there is a severe shortage of personnel to perform many services at FBOs. Given the restrictions imposed in response to the COVID-19 pandemic, the FBO situation becomes even more challenging as providers are unable to support production processes fully. FBO consolidation and territorial expansion of the business have alleviated this situation (The Insight Partners, 2022).
Nevertheless, concerns remain sufficient in the FBO labor market, and their existence as fuel and gasoline becomes less and less available, including environmentally. According to Sadowski and Mohr (2023), there are fuel spillage and environmental pollution problems that are frequent precedents in the history of FBOs. Difficulties in controlling operations and the presence of large operational volumes due to increasing demand lead various FBOs to the problem of controlling their position in the market.
Impact of FBOs
There is the problem that the public may not be aware of the purpose of the parts of the airport of special designation that include the FBO. However, its impact on the overall structure of the U.S. aviation economy is quite significant. In particular, it can be established that they generate an additional US$2.5-3.7 million in revenue (Economic impact, n.d.). General aviation requires maintenance, and FBOs that provide these services make it much easier for the government to maintain a high level of assistance. For example, the provision of fuel, regular aircraft maintenance, and parking services is required for general aviation and can be provided by FBOs.
The Future of FBOs
FBOs undoubtedly occupy an important position in airports and perform functions that affect airport economics and passenger traffic. The availability of advantages such as high-end service, customized business offerings, availability of separate hangars, and service packages makes FBOs a convenient facility for airports. However, taking into account the aspects identified earlier, such as the impact of COVID-19, market demand, legal aspects, and agreements with the FAA, FBOs should make efforts to strengthen organizational culture and structure. Moreover, in the context of the Air Commerce Act, FBOs should strengthen the training and licensing sector for personnel and the use of hangars and maintenance tools. Otherwise, FBOs will continue to struggle in the marketplace and will not be able to return to their former prestige and focus on private customers.
References
Economic impact. (n.d.). Aviation across America.
The Insight Partners. (2022). Fixed-base operator market forecast to 2028 – COVID-19 Impact and global analysis by services offered and application. Research and Markets.
U.S. Department of Transportation & Federal Aviation Administration. (2006). Advisory circular.№150/5190_7.
Federal Aviation Administration. (2021). A brief history of the FAA.
Federal Aviation Administration. (2022). Order 5190.6B – FAA Airport Compliance Manual – Change 2 (consolidated).
Sadowski, J., & Mohr, B. (2023). Pollution coverage for Fixed-Based Operators. Henderson Brothers.