According to the Market Statsville Group (MSG), the global fixed-base operator (FBO) market size is expected to grow from USD 4.5 billion in 2022 to USD 8.3 billion by 2033, at a CAGR of 5.7% from 2023 to 2033. The major factors driving the growth of the fixed base operator market include growth in the global airport infrastructure and increased use of aircraft ground handling systems.
A fixed-base operator (FBO) is an organization that provides various services permitted by the airport authority to operate and provide aeronautical services, including aircraft maintenance, hangaring, tie-down and parking, aircraft rental, fueling, flight instruction, and others. The FBO is the primary support services provider to aviation operators at an airport.
FBO offers and operates differently; not all FBO service needs to provide the same and similar services; some offer ground transportation arrangement, restroom facilities, weather information areas, showers, aviation supplies, and concierge services for flight crews, pilots, and passengers. And others provide in-flight catering services to aircraft.
The FBO's place of business varies as per location, demand, and air traffic, as it can be a small hangar or shop with an adjoining office and perhaps a pilot's lounge. Or, it can be an elaborate series of hangars, shops, offices, classrooms, and showrooms. Also, various private jet chatters their jet at FBO and plans their trip accordingly. Thus, increasing dependency on luxurious lifestyles and rising demand for such FBO services worldwide have positively influenced the market's growth. Moreover, this advanced service has opened the door for fast-growing organizations of all sizes, making FBO available for big and small companies.
The COVID-19 pandemic has impacted virtually every aspect of everyday life, including the aviation industry. COVID-19 severely impacted the airline and FBO industry as the pandemic has weakened airline hubs in the short term, which resulted in the declining growth of the FBO market. However, traffic starts to come back with the announcement of vaccines. The airline operator companies who remain uptight in the tough era are assumed to be stronger and more profitable with some necessary short- and long-term adjustments to their model. The significance decline in the aviation industry due to the pandemic and containment measures is threatening the viability of fixed-base operators. However, various nations, including the USA, Australia, Singapore, China, France, and others are helping their airlines with supportive financial packages to keep airlines worthy and pay salaries to their staff.
The quality and timely airport infrastructure keep pace with the level of projected growth and interest of the traveling public. Also, with accommodating the demand for better airport infrastructure, aviation's economic and social benefits can contribute to the community and national economic vitality. The growing air traffic will increase the need to innovate with new concepts that are required to optimize the use of emerging technologies, processes and design for the complete ground journey. Thus, major countries are focusing on airport infrastructure, which fosters the demand of FBO market over the forecast period. For instance: as per A-ICE, India’s aviation industry is anticipated to become one of the world's fastest-growing, with a growth rate of 6.8% expected, equating to more than 50 million passengers per year. This will further increase India’s airports and aviation infrastructure, thereby paving its way toward market growth.
The huge capital investment is the major reason that hinders the growth of the market. Further, the significance decline in the aviation industry due to the pandemic and containment measures is threatening the viability of diversified industries. The countries had to make a choice between economy and health safety, where most countries have prioritized health safety and grounded their airline completely. The impact of restricted airline operations is visible on the income-expenditure table of airlines. As the grounded plane makes no money, however, they demand more in terms of extended maintenance and parking fees with fixed costs, with no revenue earnings.
In today's busy lifestyle and advanced world, consumers prefer to spend more by getting better and more luxurious services. For offering upscale amenities, FBOs are focusing in severe measure with the growing trend of partnering with major hotels and retailers. Many FBOs are being re-novate with private meeting rooms, plush lounges, and also a spa area. When private plane charters at an FBO partner with a hotel, they can walk off the aircraft and stay at the hotel. Thus, the rising demand for luxurious services, coupled with the growing need for FBO services at airports, is creating a lucrative growth opportunity for the FBO market.
The study categorizes the fixed-base operator (FBO) market based on type and application area at the regional and global levels.
Based on the application, the market is bifurcated into general and private aviation. The general aviation segment accounts for a larger revenue share in 2022. People from various countries travel to foreign countries as tourists, which has become a new trend in recent years. In response to this demand, multi-brands are changing their services in both private and general aviation, which will be another driving force in this sector. The growing demand for advanced and productive safety while traveling with all luxury services is opening up a huge opportunity for fixed-base operators to provide these services to aircraft owners. Furthermore, the global expansion of business aviation is supporting the growth of the fixed-base operator market.
Based on the regions, the global fixed-base operator (FBO) market has been segmented across North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. North America is expected to witness the highest market share in 2022. North America's aviation industry is mature, with several aircraft OEMs present. The growing emphasis on improving the infrastructure of private airports, combined with favorable regulatory changes, may support the growth of the North American general aviation market during the forecast period.
The fixed-base operator (FBO) market is extremely cutthroat, and significant competitors in the sector are using strategies including product launches, partnerships, acquisitions, agreements, and growth to enhance their market positions. Most sector businesses focus on increasing their operations worldwide and cultivating long-lasting partnerships.
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