With September’s announcement that Signature Flight Support parent company BBA Aviation is buying Landmark Aviation from the Carlyle Group, the FBO landscape will change somewhat this year. The $2.065 billion deal, when and if consummated, will give Signature—which already has the world’s largest FBO network—nearly 200 locations worldwide. Some observers have pointed out that the deal won’t change the number of bases controlled by service provider chains (approximately 10 percent in the U.S., mainly at top-tier airports). What will change is the name on a number of facilities, and there is no denying that for those customers who maintain brand loyalty (not a very large percentage, according to responses from our annual FBO survey) Signature has greatly enhanced its coverage and in-network referral capability, both domestically and abroad.

There is overlap between Signature and Landmark at 12 airports, and it remains to be seen how regulators will address this. Given the recent penchant for FBO chains to double-up locations at some airports, the deal will take some massaging at locations such as Westchester County Airport, where four of the five FBOs are currently operated by either Signature or Landmark, or at Teterboro Airport, where Signature already has two of the six facilities operating there. Landmark was one of two FBOs at Scottsdale when it acquired its competitor as part of its Ross Aviation purchase, a blockbuster deal at the time that involved 19 FBOs. Landmark was forced to shed that location and subsequently sold it to Signature. Now Signature will likely find itself in the exact same situation at the exact same airport.

Consolidation Trend?

For BBA Aviation, the purchase represents a hefty bet on the future of the industry, and with a resurgent U.S. business aviation industry it could prove to be a shrewd one. As the metrics for bizav flight operations in the U.S., the industry’s largest market, continue to improve, they could turn up the heat on the FBO consolidation pot. The usual factors remain at play: owners who have been looking to exit the market, for reasons such as age, lack of family succession or simply fear of another downturn, could see their asking prices met under a wave of optimism. With Landmark presumably out of the way, Signature will have lost a major rival in its bidding, but one might assume that the BBA Aviation subsidiary could pause to digest its enormous acquisition before plunging back into the consolidation fray. This could present an opportunity for Atlantic Aviation, Million Air and Jet Aviation as well as smaller regional chains such as Tac Air.

When the price of a barrel of crude oil fell by more than half in late 2014, few believed those prices would or could be sustained for more than a few months, but at the beginning of last month they were still hovering around $40 per barrel. That has lowered pump fuel prices while driving U.S. flight-department activity. Despite the rising pressure from contract fuel and more efficient aircraft, given the relatively stable profit margins in the system, many North American FBOs saw their highest fuel flowage and most profitable year (at least since the economic downturn) last year. Enthusiasm about this trend continuing is sure to be evident at NBAA’s Schedulers and Dispatchers Conference in Tampa.

Another point of curiosity will be the fate of AirFlite, a favorite of AIN’s readers for nearly a quarter century. Owned by Toyota, the FBO at Los Angeles-area Long Beach Daugherty Field houses the automaker’s North American flight operations department as its major tenant, which is in the process of relocating from Southern California to Plano, Texas, where the Nagoya, Japan-based company is establishing its new North American headquarters. While AirFlite has racked up an enviable record over the course of its existence, keeping its same name and ownership while many of its contemporaries have been sold off or rebranded, and earning top survey scores when other facilities are being replaced, it is uncertain whether the auto manufacturing giant will continue to maintain its investment in the FBO, which was once seen as the cornerstone of an aviation service provider network that Toyota intended to build.

In 2014, when the establishment of the Texas campus was announced, Toyota noted the move would not affect AirFlite at that time, but with its sterling reputation and immaculate facility, the FBO would certainly be considered a plum for any of its competitors. Given Gulfstream’s expanding West Coast service center located just across the field, many believe it would be an excellent opportunity for the airframer’s sister company Jet Aviation to add its first location on the Left Coast.