AOPA Pilot Magazine - October 2019 - 28

GUEST EDITORIAL

The pilot and the FBO

BY JERRY GREGOIRE

A love/hate story

JERRY GREGOIRE

is owner of Redbird
Flight Simulations.

28 | AOPA PILOT October 2019

AN FBO IS THE VERY DEFINITION of an investment that
any sane person would intuitively know to stay away
from. It features all the things you don't want in a business: high regulation, high capital cost, very high risk
and liability, a fickle and extremely price-sensitive customer base, and the headache of having a city council
for a landlord populated by lawyers and other ne'er-dowells who couldn't find their own town's airport if you
handed them a map and a voucher for Uber.
And if that weren't enough, most of the pilots I
know-in particular those pilots operating their own aircraft-are perpetually frustrated by the price they pay
for fuel and services. And, while they may not admit it,
they harbor the belief that the FBOs they frequent are
taking advantage of them. Which, of course, they are,
but for good reason.
The price of fuel has to be everyone's second or third
consideration when planning a fuel stop, coming right
after weather and, perhaps, field length. I operate an
aircraft that takes 200 to 300 gallons at a time. When
flying from the East Coast to, say, Denver, I might stop
for a refill at Memphis International, and today I'd pay
$4.60 per gallon for Jet A. But if I stop at Millington
(NQA), five minutes north, I'll pay $2.82 per gallon and
save about $445. In spite of what most pilots think,
the FBOs at Memphis charge $4.60 per gallon because
they have to. The cost of their fancy building and the vig
they're forced pay to the airport authority and local governments demands it. Now, lest you think what you're
reading is some kind of general defense of FBOs and
the shenanigans they pull, relax. I'm a recent victim of
the latest scam, played routinely by a couple of the big
players in the market (which need not be named), where
unexplainably high handling, parking, and "security"
fees are tacked on to the fuel bill with no mention or
warning. This practice is, at best, deceptive and unethical and, at worst, the kind of fraud by omission that
would get the attention of any state's attorney general's
office if it were any other type of business.
The FBO at Millington, as it turns out, charges $2.82
per gallon because, they, too, have to, in order to draw
traffic to the airport. And once all the customers fly
away and the expenses are paid, the profit margins at
the Memphis and Millington FBOs are about the same
and generally not worth the trouble, returning significantly less on investment than a NASDAQ index fund.
So, it's off we go to Millington because for all

the extra money we'd pay in Memphis, the speed,
quality, and friendliness of service will not likely
be better, perhaps in some ways even worse as we
compete for attention with the Global Expresses and
the Cessna Citation Xs. And maybe the facilities are
nicer in Memphis, or maybe not, or maybe it doesn't
even matter.
Confession: I'm a pilot and I'm the majority shareholder in an FBO. As such, I suspect myself of being
up to no good all the time.
If you've never visited the Redbird Skyport FBO
at the San Marcos, Texas, airport (HYI), there's still a
chance that the name rings a bell. Perhaps it's the dollar avgas stunt we pulled in 2012, or the groundbreaking
FAA/Industry Training Standards Proficiency Part 141
flight school we operated as a simulator development
laboratory, or maybe even because of the dozens of
Pilots' Choice Awards the Skyport has received, including the 2018 Ace and Star awards for best FBO in the
nation at airports with less than 4,000 arrivals per year.
Since its opening in 2011, the Skyport has pumped an
estimated two and a half million gallons of fuel, hosted
dozens of major aviation events-including the very
first AOPA regional fly-in event in 2014-and helped
teach the industry the utility and value of simulation in
primary and advanced training. This fall, the Redbird
Skyport will close, and San Marcos Municipal will join
that growing list of airports with only a single FBO-one
that is free to call the shots on fuel and hangar prices.
In its eight years of operation, the Skyport has never
made a dime. Not even a profitable quarter. Had it not
been for Redbird Flight Simulator's explosive growth
and profitability over those years, the Skyport might
have found itself in deep trouble early on. The demise
of the Skyport is the result of some poorly informed
decisions and miscalculations on my part, made long
before the project ever broke ground.
The first faulty decision was that we selected the
wrong airport. The San Marcos airport was one of five
airports we considered during the analysis phase and it
had two very strong things going for it. One, it's only 35
minutes from the Redbird Flight Simulations Inc. headquarters and factory in Austin, Texas, and the other, that
San Marcos-located halfway between Austin and San
Antonio-is the fastest-growing city in Texas. If you know
anything about Texas, that's saying something. Our projections for growth at the airport combined with the

AOPA Pilot Magazine - October 2019

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