Situational Analysis

a. The Company Overview
i. Describe your products, experience, know-how, financial, human and capital resources. What is the company’s long-term vision and strategic goals? What is the company’s progress towards these goals? Identify key performance gaps?

A Fixed Base Operator (FBO) is a business that provides services at the 20,000 airports in the USA. They operate flight training schools, provide aircraft repairs and maintenance, provide fuel and provide pilot support with weather and flight planning facilities. As such they are the backbone of general aviation.

Airport Tenant – An airport tenant is a person, firm, or corporation leasing or using airport property solely for the purpose of storing an aircraft and is not engaged in or providing any aviation related commercial activity or service at the airport. An airport tenant is not authorized to function as or provide the services of an FBO
Current Products and Services

With committed capital and deep industry experience in general aviation services transactions (having closed over thirty transactions in the last fifteen years), we can move quickly and discreetly with minimum disruption of day to day operations.
Ideal FBO acquisition candidates will have:
• Annual general aviation fuel uplift in excess of one million gallons
• Long term lease rights at its airport operating location
• Ancillary business segments such as maintenance and charter will be considered but should be anchored by a strong core line service segment
• Both single operations and multi-location chains will be considered

. The financial backing of Moelis Capital Partners affords us the wherewithal to quickly consumate transactions. For more information please contact Steven Levesque or any of our other firm professionals.

Source of Revenue:
• Sale of aviation fuel – piston aircraft fuel (Avgas) and/or turbine aircraft fuel (Jet-A or Jet A-1)
• Aircraft storage (tie-down or hangar)
• Repair and maintenance of aircraft.
• Air taxi and air charter operations

Goals

 Increase market share from 15% to 30% by the end of 2015

 Growing the economic value of the base guided by reasonable, detailed plans.

 Constructing infrastructure that will support business aviation activity as well as scheduled personal air service.

 Marketing the FBO to companies that use business aircraft and/or provide aeronautical services.

 Recruiting and accepting only the highest quality fuel and service providers.

 Continuing to enhance Base Access Control and Security.

What are your strengths and weaknesses? Be sure to conduct a SWOT analysis
SWOT
Strengths
• Full complement of line/ramp services
• Aviation business community
• On-site AP/IA maintenance service
• Existing tenant base
• Reputation as a tourist destination
• All industry contract fuel programs
• Enhances the economy (tourism,
• industry)
• More than 50,000 square feet of hangar space capable of accommodating GV and Global sized aircraft
• High-speed wireless flight planning room Opportunities

• Potential market for serviced lots
•
• Partnerships with community groups

• Off-season development

• Lack of much development space at airports

• Cooperative marketing

• Community hangar space for rent

Weaknesses

• Un-serviced land

• Seasonal traffic activity

• Competition from competitor’s primarily fuel price
• Transportation service to and from site
(e.g. Car rental and taxi)
• No scheduled service
• Aging and small terminal facility
• Signage
• Maintenance costs due to hurricane prone danger Threats

• Lack of government support

• Over regulation in the aviation industry

• Security in the industry

• Economic issues

• 9/11 like situation
• Rising fuel prices

• Security issues
• Increasing costs of operation

b. The Context
i. Demand: What is the forecasted demand for the product? Is it growing or declining? Who is the decision maker? The purchase agent? How, when, where, what, and why do customers buy?
Over the past 20 years the, FBO industry has been undergoing a transition due to the attrition of many of the key players from the World War II era who initially built the nationwide foundation for the services sector. Through consolidation and buyouts by outside investors - exemplified by Signature Flight Support and Mercury Air Centers - the FBO industry today looks significantly different. And it appears more change is forthcoming.

According to Aviation Resource Group International (ARGI), a Denver-based worldwide FBO marketing and consulting firm, any business calling itself an FBO must operate under a lease with an airport-owning authority and it must dispense aviation fuel--Jet A and/or Avgas. In addition, an FBO must perform at least one of four other basic services: line service, which may include tie-down and hangar services; technical services, such as airframe and engine maintenance; aircraft rentals, charters, aircraft management and/or aircraft sales; and flight instruction.
The design aircraft represents the most demanding aircraft type or family of aircraft that uses an airport on a regular basis (a minimum of 500 annual takeoffs & landings). The existing and future design aircraft are used to define the airport reference codes (ARC) to be used in airfield planning. FAA airport design standards are organized into several different ARC groupings, each reflecting the physical requirements of that aircraft type. The activity forecasts also provide consistency in evaluating future demand based facility requirements such as runway and taxiway capacity, aircraft parking and hangar capacity, and other planning evaluations such as airport noise.

Socioeconomic Trends and Forecasts

AIRPORT SERVICE AREA

ECONOMY

Historically, downturns in general aviation activity often occur during periods of weak economic conditions and growth typically coincides with favorable economic conditions. It is evident that recent economic recession and the slow recovery that followed, has constrained general aviation activity locally, statewide and throughout national airport system. However, as indicated in the FAA’s national long term aviation forecasts, the overall strength of the U.S. economy is expected to sustain economic growth over the long term, which will translate into modest to moderate growth in aviation activity.

In broad terms, the population within an airport’s service area affects the type and scale of aviation facilities and services that can be supported.
Although a large number of airport specific factors can affect activities at an airport, changes in population often reflect other broader economic conditions which may also affect airport activity. Since it is difficult to identify specific connections between airport activity and individual economic indicators such as growth in personal income, unemployment rates, or business spending, population trends generally provide a broad measure of an area’s economic health. Regions with flat or declining populations often have weak underlying economic conditions. In contrast, higher rates of population growth often characterize a growing economy that can stimulate individual and business use of general aviation.
EVENT FACTORS

Several aspects must be taken into consideration when planning for a special event. Its impact is related to the duration of the event, the type and number of attendees, the level of media exposure, the planning partners, and the number of facilities. The event’s duration refers to the length of time attendees will be in the area. The aviation system is impacted differently if the event is for a day, over a weekend, or for more than a week.

One-day events see peaking of the traffic immediately before and after the event, potentially causing severe congestion. In these cases, the organizing group needs to establish air and ground procedures for the aircraft in advance to reduce congestion. Weekend events still have peaks at the beginning and end of the event, but it is less severe than a one-day event. Planners must be cautious with weekend events when the main event is held on one day as this causes severe peaking on that day. Events held over more than a week may see peaking during the beginning and end of the event, on a daily basis during the morning and evening, as well as Monday mornings and Friday evenings depending on the event’s timeline. Air traffic control (ATC) may need to assist in developing pre-established arrival and departure procedures and routes to reduce peak traffic congestion.

The type and number of attendees refers to the socio-demographic profile of typical attendees and the number that will be in attendance. An event that hosts more attendees will generally need additional aviation facilities in order to reduce congestion at any given facility as well as more amenities and services to support the level of attendees. In addition, the larger the event, the greater the probability that some attendees will arrive by air from other regions. Several factors affect who attends, including the type of event, the location, the popularity of the sports teams/entertainers, etc. The type of attendee can affect the amount of jet traffic to be expected and the services and facilities expected by the attendees. Fixed Based Operators (FBO) should be engaged early to ensure that they understand the anticipated need for fuel, rental cars, food service, and other amenities based on the number and type of attendees.

The number of attendees also affects the level of security necessary to ensure public safety. For many special events, the Federal Aviation Association (FAA) issues Temporary Flight Restrictions (TFR) to protect the airspace over and around the event location, typically for two hours prior to and for two hours after the event. A TFR is mandated for most sporting events including Super bowl, NFL, MLB, NCAA, and motor speedways. The airport must also consider the additional security measures necessary for the aircraft parked across the airfield, especially if there is commercial service at the airport.

THE IMPORTANCE OF VERTICAL FLIGHT AIRCRAFT FOR PUBLIC SERVICE

Vertical flight is a critical aspect of successful event management because of the need for broad security provisions and well-organized Emergency Medical Services (EMS). Given the 12 increased traffic congestion that accompanies special events, helicopters are utilized in conjunction with ground security operations as well as on-site trauma centers and ambulance capabilities.

As the cost of aviation fuel continues to rise, owners and operators of general aviation and business aircraft are faced with the unrelenting task of revamping their aviation fuel cost management initiatives - over and over again.
For aircraft owners, the rising prices are nothing new. On the contrary, it’s surely getting old. The ever-increasing operating costs associated with owning or renting an airplane affects businessmen and aviation enthusiasts alike. It affects owners, flight schools and FBOs. And it’s a problem that doesn’t seem to want to go away.

Problems faced by FBO’s:

• Fuel Tankering: Some operators have experimented with fuel tinkering, which means buying fuel for cheap (such as at a home airport) and bringing it with them on board the aircraft to avoid high-cost fuel elsewhere.

• Technology (Advanced High efficiency Aircraft’s) - Aircraft Owner’s nowadays invest in the most efficient aircraft for their operations.
• Downsizing of the fleet by many organizations/individuals/companies

ii. Social and cultural factors: Trends affecting the product, organization, and/or industry iii. Demographic variables/shifts iv. Economic and business conditions: Financial factors affecting this product at this time and in the geographical area selected.
v. State of technology for this class of product: Is it high-tech or state-of-the-art? Are newer products succeeding older ones frequently (short life-cycle)? In short, how is technology affecting this product or service?

vi. Politics/Government: Are politics (current or otherwise) in any way affecting the situation for marketing this product? Is current legislative action in state, federal, or local government likely to affect marketing of this product or service vii. Laws and regulations: What laws or regulations are applicable?

d. The Company’s Network (Collaborators)
i. Describe the relationship the company has with supply chain providers. Do good relationships exist with downstream channel members? What adjustments might be important in the future? Are there any strategic alliances that might be formed for the purposes of product development, pricing, distribution and promotion? The Customer

i. Describe the current and potential customers. How might they be described in terms of demographics and psychographics? What are their buying motivations and behaviors? How much do they buy and when do they buy? What is their level of satisfaction? Why are non-buyers not buying?

The current customers are the base tenants and the frequent flyer.

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