Something’s not going well. Even though you’ve got your FBO (Fixed-Base Operations) contract up and running, you’re getting the itch or conviction to sell your FBO. Whatever personal or financial reason is pushing towards selling, you’ll want to make sure the timing is right before you go any farther.
Ask yourself these questions to get a better idea about if you should sell your FBO or not:
Are You Making Competitive Money?
An FBO company that’s making a decent profit will be worth more going into a sale than an FBO that’s not making a good amount of money. A lot of this boils down to competition, since you’ll have a better chance at revenue if your FBO is the exclusive provider for a certain airport or service.
Most smaller local airports work with exclusive FBO contracts, while larger airports do not. If you don’t have any competition, you’ll be more likely to make a profit, and your contract will be worth more to potential buyers. If you don’t have an exclusive contract, it can be more difficult to sell your FBO, especially if it’s not already making good profit margins.
How Much Longer Does the Contract Last?
If your contract has less than 2 years left, you might not want to bother with trying to sell. It might be a better idea to just ride it out than to go through the time and hassle of selling with such a short contract time left.
Buyers will be interested more in longer contracts. Short contracts will not be appealing; therefore, you will have to sell for a very reduced price. Remember that this is a highly competitive business, so in many cases the best deal will be the winner. Bringing a short contract to the negotiations is a good way to get yourself a series of low offers that just won’t be enough to make the sale worth it for you. Sell a longer contract, or keep it going for a little longer.
Do You Have Customer Loyalty?
Pilots sometimes choose which airport to fly solely based on the FBOs at that airport. They might like your service, your fees, or some other policy you’ve put in place that gives an advantage over other airline companies or flights. FBOs with customer loyalty may be able to fetch a better price on the market than an FBO without any loyalty.
This is especially true if you have any sort of customer loyalty programs that pilots or flight crews can use. It’s not uncommon to see FBOs employing this kind of tactic to lure in flights and keep them coming back, so if your FBO isn’t doing something like this already you may have put yourself at a disadvantage in the sale market.
The bottom line is that selling an FBO shouldn’t be a decision made quickly. You need to think about timing as well as the position that the FBO company is in before you try to put it on the market.