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FBO Purchase worth it ?



 
 
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  #1  
Old April 3rd 05, 03:50 AM
Toņo
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Default FBO Purchase worth it ?

Hi all,

I have a friend that is about to purchase a small FBO. Now we all know
that owning a small FBO is a labor of love at the very least. However,
he is wondering if it is really financial suicide given the trends of
today's laws, governmental regs, legislation, TSA, etc.

His (my) question is: Do any of you have any general or specific
thoughts that you might offer him before he signs on the dotted line?

Thanks,

Toņo
  #2  
Old April 3rd 05, 03:56 AM
Bob Noel
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In article ,
Toņo wrote:

Hi all,

I have a friend that is about to purchase a small FBO. Now we all know
that owning a small FBO is a labor of love at the very least. However,
he is wondering if it is really financial suicide given the trends of
today's laws, governmental regs, legislation, TSA, etc.

His (my) question is: Do any of you have any general or specific
thoughts that you might offer him before he signs on the dotted line?


It depends on where the FBO is and why it's for sale. For example,
it could easily be financial suicide to buy a failed FBO where at the
same airport with a very good one (or two). Or buying an FBO near
DCA/IAD/BWI, BOS, JFK, LAX, etc would be crazy.

--
Bob Noel
looking for a sig the lawyers will like
  #3  
Old April 3rd 05, 04:49 AM
Earl Grieda
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Default


"Bob Noel" wrote in message
...
In article ,
Toņo wrote:

Hi all,

I have a friend that is about to purchase a small FBO. Now we all know
that owning a small FBO is a labor of love at the very least. However,
he is wondering if it is really financial suicide given the trends of
today's laws, governmental regs, legislation, TSA, etc.

His (my) question is: Do any of you have any general or specific
thoughts that you might offer him before he signs on the dotted line?


It depends on where the FBO is and why it's for sale. For example,
it could easily be financial suicide to buy a failed FBO where at the
same airport with a very good one (or two). Or buying an FBO near
DCA/IAD/BWI, BOS, JFK, LAX, etc would be crazy.


Or buying an FBO at an airport that is constantly under threat of closure.


  #4  
Old April 3rd 05, 06:49 AM
Toņo
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Earl Grieda wrote:
"Bob Noel" wrote in message



It depends on where the FBO is and why it's for sale. For example,
it could easily be financial suicide to buy a failed FBO where at the
same airport with a very good one (or two). Or buying an FBO near
DCA/IAD/BWI, BOS, JFK, LAX, etc would be crazy.



Or buying an FBO at an airport that is constantly under threat of closure.



Bob and Earl...

The FBO is under sale because the owner is no longer physically capable
due to health problems. It has been in continuous operation for 20 years
or so and operates slightly in the black under poor management.

The nearest class B is 50 miles away and the airport in general seems to
not be in threat of closure. There are two other FBO's on field that
seem to be doing OK. They have been in operation for a number of years.
The area is modest in population (maybe 100,000)with a viable economy
that seems to be booming at the moment.

I believe that the local infrastructure will support the business but it
is my concern (as well as his) that the general trends in aviation will
adversely affect the small FBO in the near future.

Take for example the cost of insurance, or even the ever-increasing
governmental programs supposedly designed to increase security at
airports. I was told today that an FBO was fined heavily when and FBI
agent was able to walk freely onto the tarmac and take a picture of an
aircraft in the class D airspace.

Another example was a small FBO that was co-located with a part 135
operation that was required to install two $10,000-- metal detection
gates at their entrances.

Anyway, I was just testing the water to see if anyone had any strong
feelings about taking on the purchase of an FBO in today's climate.

Thanks to both of you for your responses,

Toņo

  #5  
Old April 3rd 05, 02:45 PM
Nathan Young
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On Sat, 02 Apr 2005 18:50:44 -0800, Toņo
wrote:

Hi all,

I have a friend that is about to purchase a small FBO. Now we all know
that owning a small FBO is a labor of love at the very least. However,
he is wondering if it is really financial suicide given the trends of
today's laws, governmental regs, legislation, TSA, etc.

His (my) question is: Do any of you have any general or specific
thoughts that you might offer him before he signs on the dotted line?



It is probably more difficult than ever to make it as a small GA FBO.
Rising costs will continue to deter flying and flight training.
Increased government regulation could hamper GA significantly (just
look at the DC area for examples).

However, if the FBO is a bit larger, and caters to biz jet types,
business is probably up and to the right... I know the local area
charter ops are doing great business. A lot of execs won't tolerate
the airlines any longer.

-Nathan

  #6  
Old April 3rd 05, 04:42 PM
William W. Plummer
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Default

Toņo wrote:

Hi all,

I have a friend that is about to purchase a small FBO. Now we all know
that owning a small FBO is a labor of love at the very least. However,
he is wondering if it is really financial suicide given the trends of
today's laws, governmental regs, legislation, TSA, etc.

His (my) question is: Do any of you have any general or specific
thoughts that you might offer him before he signs on the dotted line?


Read all the regs carefully. About 10 years ago I thought about
becoming a partner in a 135 operation. Then I read about the staff you
were required to have, etc. The fantasy lasted about 10 minutes.
  #7  
Old April 3rd 05, 11:39 PM
Chixfly2
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Default

A great old timer who we lost a few years ago used to tell me that:

"If you want to make a small fortune in Aviation - start with a large
fortune and know when to stop!"

(Thanks, Uncle Vern!)

  #8  
Old April 3rd 05, 11:51 PM
C J Campbell
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"Toņo" wrote in message
...

His (my) question is: Do any of you have any general or specific
thoughts that you might offer him before he signs on the dotted line?


What are the assets of the FBO? Does it have the fuel concession? What are
the terms of the lease? What is the projected revenue -- realistically? What
are the real costs? Are there any environmental concerns (underground fuel
tanks, etc.)? What is the internal rate of return? Does your friend have a
business plan? Are there any hazardous materials, such as asbestos and lead,
in the building materials? Is the building up to code? Is there room for
expansion? What is the competition like?

A lot of guys are trying to sell an FBO, but in fact they don't own
anything -- everything is leased. If all they have to sell is an empty box,
why buy it?


  #9  
Old April 4th 05, 12:07 AM
Martin Hotze
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On Sun, 3 Apr 2005 15:51:18 -0700, C J Campbell wrote:

What are the assets of the FBO? Does it have the fuel concession? What are
the terms of the lease? What is the projected revenue -- realistically? What
are the real costs? Are there any environmental concerns (underground fuel
tanks, etc.)? What is the internal rate of return? Does your friend have a
business plan? Are there any hazardous materials, such as asbestos and lead,
in the building materials? Is the building up to code? Is there room for
expansion? What is the competition like?


all good points.

and: does he have the money and the dedication for running an FBO? will his
family join in?

#m

--
http://www.hotze.priv.at/album/aviation/caution.jpg
  #10  
Old April 4th 05, 12:59 AM
Toņo
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Default

C J Campbell wrote:

What are the assets of the FBO? Does it have the fuel concession? What are
the terms of the lease? What is the projected revenue -- realistically? What
are the real costs? Are there any environmental concerns (underground fuel
tanks, etc.)? What is the internal rate of return? Does your friend have a
business plan? Are there any hazardous materials, such as asbestos and lead,
in the building materials? Is the building up to code? Is there room for
expansion? What is the competition like?

A lot of guys are trying to sell an FBO, but in fact they don't own
anything -- everything is leased. If all they have to sell is an empty box,
why buy it?


Great points and questions, CJ. I will pass all of this onto my friend.
I especially like the last question!!

Thanks!

Toņo
 




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