How Fixed Base Operators Are Valued

Abstract

1. Introduction

An FBO sells fuel, rents hangar space, handles aircraft, and frequently performs maintenance, flight training, or charter. Those activities have different economics, different risk, and different durability. They also sit on land the operator does not own, under an agreement with an airport sponsor that has a fixed remaining term and conditions on transfer.

A single enterprise multiple applied to consolidated earnings treats all of that as one thing. It is the most common approach in the market and it is the reason valuations diverge. A buyer who prices durable hangar income at a fuel multiple underpays for it. A seller who folds a nine-year operating agreement into a perpetuity multiple overprices the whole business. Both errors survive because the comparables that would expose them are not published.

This paper sets out a component approach and, equally important, is explicit about what evidence supports it and what does not. Section 2 addresses the guidance problem, which is more serious than practitioners generally recognize. Section 3 separates the revenue streams and supplies filed data on their relative contribution. Section 4 addresses the operating agreement, which is frequently the largest asset in the transaction and the one analyzed last. Section 5 sets out the market evidence that actually exists, which is thinner than the trade discussion implies. Section 6 prices the remaining term directly, using only figures the transacting parties disclosed themselves. Section 7 addresses purchase price allocation and its tax consequences. Section 8 covers diligence. Section 9 states limitations.

2. The Guidance Problem

A practitioner separating a business from its real estate at an airport is working without literature and without a current guide note. Both statements are verifiable and both are worth stating before any method is proposed.

2.1 No Literature

There is no peer-reviewed article on FBO valuation. Searches of The Appraisal Journal, the air transport management and airport management journals, the transportation research literature, and the Airport Cooperative Research Program return nothing addressing the valuation of a fixed base operator. The Appraisal Institute catalogue contains no publication on FBOs, airports or aviation leaseholds, and the standard American Society of Appraisers taxonomy of real property going concerns, which lists seventeen simple and seven complex types, includes neither FBOs nor airport businesses. The only academic work located is a doctoral dissertation identifying critical success factors for FBOs, which concerns operational performance rather than value (Wang 2016).

This is a genuine gap rather than a failure of searching, and it means that everything circulating in the market on FBO valuation is practitioner commentary, broker material, or transaction gossip. None of it has been reviewed, and most of it is written by parties with an interest in the number.

2.2 No Current Guide Note

The Appraisal Institute's Guide Note 5, "Appraisals of Real Estate with Related Personal Property, Business Property or Intangible Assets," was retired on 7 August 2020. It has not been replaced. The Guide Notes currently in force do not address intangibles or going concern value.

The Institute's principal dedicated text on the subject, the Business Enterprise Value Anthology, is in its second edition from 2011 and has not been superseded. The Institute offers a two-day course on separating real property, personal property, and intangible business assets, and states in its own course description that it advocates no particular theory or method. That disclaimer is itself worth citing, because it is an accurate description of the state of the field rather than an evasion.

2.3 What the Standards Require

The Uniform Standards of Professional Appraisal Practice require identification, analysis, and disclosure. They do not prescribe a method.

Standards Rule 1-2(e) requires the appraiser to identify any personal property, trade fixtures, or intangible assets that are not real property but are included in the appraisal. Standards Rule 1-4(g) is the operative provision: when personal property, trade fixtures, or intangible assets are included, the appraiser must analyze the effect on value of such non-real property assets. Standards Rule 2-2(a)(iii) carries the parallel reporting requirement. Standards 9 and 10 govern the development and reporting of business and intangible asset appraisal.

Nothing in those rules tells the appraiser how to divide the value. The obligation is to identify the components, analyze their effect, and disclose what was done.

2.4 The International Position

Outside the United States the property type has a name and a standard. The Royal Institution of Chartered Surveyors Valuation: Global Standards, effective 31 January 2025, contain a practice guidance application on the valuation of individual trade related properties, defined as any type of real property designed or adapted for a specific type of business where the property value reflects the trading potential for that business. An FBO fits that definition precisely.

The International Valuation Standards, also effective 31 January 2025, contain no trade related property standard, and the term does not appear in them. An FBO valuation under those standards draws on the asset standards for businesses and business interests, for intangible assets, and for real property interests, applied together.

2.5 The Methods, and Their Status

The literature converges on three approaches to allocating a going-concern value among real property, tangible personal property, and intangible assets: a cost approach, a market or market survey approach, and an income approach commonly implemented as a management fee method. No standards body has promulgated that framing, and a practitioner should present it as the literature's convention rather than as a rule.

The residual identity is stated plainly in the golf literature, where the same problem has been litigated extensively in property tax proceedings. Hirsh (2021) states it as real property value equals going concern value less tangible personal property less intangible personal property, values the going concern first, and deducts the tangible and intangible components. He also warns against using comparable rents from dissimilar property types as a proxy for real property value, which is directly applicable to a practitioner tempted to price FBO hangar space off industrial comparables.

The hotel literature carries the deepest treatment and an unresolved disagreement, between a management fee approach and a business enterprise value approach that deducts an excess-profits estimate. The disagreement has not been resolved, and the assessment community's own review of intangibles notes that the business enterprise approach has not been broadly accepted by appraisers or by courts. A practitioner choosing between them should expect to defend the choice rather than assume it.

Marina valuation is the closest structural analogue in the aviation context: leased submerged land or waterfront, fuel sales, slip rental that behaves like hangar rental, and a mix of annual and transient customers. Simpson (1998) on marina valuation includes a treatment of business elements and provides a methodological template, though the specific factors differ.

3. Separating the Revenue Streams

The streams behave differently, carry different risk, and do not deserve the same multiple.

Table 1. FBO revenue streams and their characteristics.

3.1 What the Filings Show

The relative contribution of these streams is not a matter of opinion. It was disclosed for a national FBO network in securities filings during the period the network was owned by a listed company.

Macquarie Infrastructure Corporation reported Atlantic Aviation as a segment through 2020. Its annual report for that year states that fuel sales historically have been approximately 60 percent of gross margin, that hangar rentals constituted approximately 15 to 20 percent of gross margin, and that other services including de-icing, aircraft parking, cleaning, and catering provided the balance. The 2017 report gives fuel at 63 percent of gross margin for that year. The 2020 report also discloses that the earnings-weighted average remaining lease length across the portfolio, including leases extendable at the operator's sole discretion, was 22.0 years; the 2017 report gives 20.3 years, and 19.6 years for 2016. The 2020 figure carries a caveat from the filer that is usually dropped when the number is quoted, and Section 3.5 gives it.

Two conclusions follow. Fuel is the dominant contributor to gross margin, which validates the emphasis it receives. And hangar rental at 15 to 20 percent of gross margin is a material stream in its own right, large enough that mispricing it moves the valuation materially. The stream that behaves like property is not a rounding error.

The same disclosure supports the point Section 4 develops. A sophisticated owner reported remaining lease term as a headline portfolio metric alongside revenue and earnings, which is what an owner does when it understands that the lease term is the constraint on the earnings stream rather than a lease administration detail.

3.2 Fuel Is a Margin Business

Gallons and gross fuel revenue are the numbers quoted most often and they carry the least information. What matters is margin per gallon and how much of it is durable. A location with high volume and thin contract margin can generate less profit than a smaller operation with strong retail share. Self-serve installations shift both volume and margin. Fuel is also the stream most exposed to a second operator on the field or to a sponsor decision on fuel flowage.

The purchase arrangements are worth distinguishing because they determine who captures the margin. Retail is the posted price at the FBO. Contract fuel is a pre-negotiated per-gallon price arranged through a reseller and invoiced through the program, which compresses the FBO's margin in exchange for volume. Branded and loyalty card programs sit between the two. An into-plane fee is charged for delivering fuel the customer purchased elsewhere. And a fuel flowage fee is paid by the fueling entity to the airport sponsor off the top.

No authoritative source publishes FBO fuel margins or the retail-to-contract volume split. This is not an oversight in the search. The Government Accountability Office examined prices for aviation services at FBOs in GAO-20-16, published November 2019, and reported no margin figures. Its price finding is regularly quoted in one direction only and should be cited in both. Raw averages ran the other way: 100LL averaged $5.01 a gallon at airports without on-airport competition against $5.74 at multi-FBO airports, and Jet A $4.80 against $5.37. GAO cautioned that “examining average differences in price fails to control for other factors,” since airports with more than one FBO “are likely to be those that have higher traffic volumes,” and concluded that “on-airport competition is associated with lower prices at the country’s busiest airports.” Neither the principal trade associations nor the federal energy and transportation statistical agencies publish FBO-level margin data.

What exists is adjacent rather than substitutive. An Airport Cooperative Research Program report on airport fueling services includes case studies in which airport sponsors operating their own fuel programs report target margins over wholesale delivered cost. Those figures come from small and mid-size fields running self-operated programs and should not be generalized to commercial FBO chains. The segment disclosure above, that fuel is 60 to 63 percent of gross margin, is a composition figure rather than a per-gallon margin and should not be used as one either.

The practical consequence is that a fuel margin assumption in an FBO valuation has to come from the subject's own historical data, tested for durability, with contract and retail separated. There is no industry benchmark to fall back on, and an analysis that cites one is citing something that does not exist.

3.3 Hangar Revenue Is Real Estate

This is the part buyers most often underprice and sellers most often fold into an enterprise multiple where it does not belong. Hangar rent is contracted, occupancy at most fields is high because supply is constrained, and the stream behaves like property income. It should be analyzed as property income on the underlying leasehold, and then reconciled with the enterprise analysis rather than blended into it.

Underwriting hangar revenue at an FBO requires a view on where market rent sits and where it has been trending. The GA hangar rent index exists in part for this reason. Most FBO models simply carry forward the seller's current schedule, which assumes both that the schedule is at market and that it will hold, and tests neither.

3.4 Fuel Flowage

The flowage fee is the sponsor's share and it is negotiated, not fixed. It is addressed in Chapter 18 of FAA Order 5190.6C, the Airport Compliance Manual issued 20 February 2026 and falls within the federal policy on airport rates and charges, which applies its principles to all aeronautical uses while noting that the agency will not ordinarily investigate the reasonableness of a general aviation airport's fees absent evidence of a progressive accumulation of surplus aeronautical revenue.

No national survey of flowage rates has been published. The one published dataset located is a state survey now more than a decade old: Wisconsin surveyed its system plan airports in 2013 and received responses from 91 of 98. Of the 80 airports reporting 100LL sales, 51 levied a flowage fee, ranging from under five cents to over seventy-five cents per gallon with most between six and ten cents. Of the 54 reporting Jet A sales, 40 charged a fee, ranging from under five cents to over a dollar per gallon.

That survey is useful for establishing the shape of the distribution and useless for establishing a current rate at a specific field. The rate at the subject airport is in the subject airport's published schedule, and that is where it should come from.

3.5 How Much Term the Sector Actually Has

Remaining lease term is the one FBO metric that two independent operators have both disclosed on a recurring basis, and the two series agree.

Macquarie Infrastructure Corporation reported an earnings-weighted average remaining lease length for the Atlantic Aviation portfolio in every annual report from 2015 through 2020, measured on EBITDA weightings and including extensions exercisable at the operator’s sole discretion. BBA Aviation reported the equivalent figure for the Signature network in its 2015 annual report as an average unexpired lease term of 19 years.

Table 2. Disclosed earnings-weighted average remaining lease term, Atlantic Aviation portfolio.

Source: Macquarie Infrastructure Corporation, Forms 10-K for fiscal years 2015 through 2020.

The 2020 figure needs the caveat the filer supplied with it. Macquarie stated that part of the increase “reflects potentially temporary changes in the contribution to EBITDA excluding non-cash items from a number of FBOs due to COVID-19,” and that on 2019 contribution weightings the figure “would have been 20.1 years.” A practitioner citing 22.0 years without that sentence overstates the sector’s tenure by roughly two years.

What survives is a defensible benchmark. Two networks, roughly 265 locations between them, both sitting at nineteen to twenty years of weighted remaining term across six reporting periods. That is better evidence on FBO tenure than anything in the trade literature, and it is the number against which a single-location subject should be compared.

4. The Operating Agreement

An FBO does not own its position on the field. It holds it under an agreement with the airport sponsor, and that agreement determines almost everything about the durability of the earnings a buyer is purchasing.

4.1 What to Read For

Remaining term. The same wasting asset problem that governs hangars governs the FBO position. Earnings that run out in nine years are not worth a perpetuity multiple. FAA Order 5190.6C, the Airport Compliance Manual issued 20 February 2026, states in Chapter 12 that “most tenant ground leases of 30 to 35 years are sufficient to retire a tenant’s initial financing and provide a reasonable return for the tenant’s development of major facilities,” treating ground leases of thirty to thirty-five years as typically sufficient to amortize a tenant's investment, and directing that the agency “should not consent to proposed lease terms that exceed 50 years,” since a longer term “may be considered a disposal of the property because it likely exceeds the useful life of the structures erected on the property.” ACRP Report 47, published fifteen years earlier, reaches the same place independently, giving a typical airport land lease term of twenty to thirty years and treating any term longer than fifty years as potentially a fee simple transaction.

Renewal mechanics. Whether extension is at the sponsor's discretion, and on what rent. The compliance manual directs that rental of airport land and facilities be assessed on a reasonable basis, for example by appraisal, with periodic adjustment for leases longer than five years. A renewal at appraised market rent is a different asset from a renewal at a fixed escalation.

Exclusivity, or its absence. Federal law prohibits granting an exclusive right to provide aeronautical services to the public, both as a general statutory prohibition and as a grant condition, and Grant Assurance 23 carries the same obligation. The current compliance manual revised the definition of an exclusive right to clarify that the prohibition extends to all aeronautical activities, and provides that the grant of options or preferences on future airport lease sites to a single service provider may be construed as intent to grant an exclusive right.

There is a proprietary exception. An airport owner may itself provide aeronautical services exclusively with its own equipment and employees, as the FAA held in a 2005 Part 16 decision, though the same decision found a nondiscrimination violation where the sponsor charged one tenant a lower fuel flowage fee than others holding identical permits. A buyer acquiring the only FBO on a field is acquiring a position that federal law will not protect from a second entrant, and may not protect from the sponsor entering itself.

Minimum standards. Required hours, staffing, equipment, and capital investment obligations that a buyer inherits. These are the subject of FAA Advisory Circular 150/5190-8, issued 7 December 2023, which cancelled AC 150/5190-7 and directs sponsors to “reasonably protect the investment of providers of aeronautical services to meet minimum standards from competition not making a similar investment,” and the compliance manual's chapter on reasonable commercial minimum standards adds guidance on availability of automotive gasoline and on standards for specialized aviation service operators.

Minimum standards cut two ways, and a valuation should treat both. They impose cost on the incumbent. They also function as a barrier to entry that protects the incumbent's position, which is how the Department of Justice characterized them in an antitrust complaint against an FBO acquisition, noting that the airport authority's minimum standards required twenty thousand square feet of hangar storage and a five-acre lease. A buyer is purchasing both the obligation and the protection.

Transferability and consent. This is the provision most often skimmed and the one most likely to affect a transaction. The compliance manual's lease review chapter asks directly whether the sponsor has maintained the right to approve in advance an assignment or sublease by the tenant, with the stated rationale of protecting against an operator acquiring a competitor or a sublease shifting to non-aeronautical use. The federal expectation is that sponsors retain assignment consent rights. A buyer assuming a lease assigns freely is assuming against the grain of federal guidance.

Fuel flowage and revenue sharing. What the sponsor takes off the top, and whether it can be adjusted.

On a federally obligated airport the sponsor operates under grant assurances covering economic nondiscrimination and a fee and rental structure making the airport as self-sustaining as possible. Those obligations constrain what a sponsor can agree to, which cuts both ways for a buyer: they limit some sponsor behavior, and they also limit the concessions a buyer can negotiate.

4.2 What the Agency Does and Does Not Regulate

The FAA stated its position on FBO consolidation and pricing directly in its December 2017 questions and answers on FBO industry consolidation and pricing practices: it does not directly regulate the FBO industry at federally obligated airports, the federal government does not regulate FBO pricing, and while acquisitions or mergers may raise anticompetitive concerns the agency has no role absent a conflict with federal obligations. Sponsors must nonetheless enforce lease provisions requiring reasonable and not unjustly discriminatory prices.

The practical implication for a valuation is that FBO transfer and consolidation is a matter of the sponsor's lease, not of federal aviation regulation, and the diligence question is therefore what the sponsor's lease says and how that sponsor has behaved, not what the agency permits.

4.3 The Administrative Record

Disputes between FBOs and sponsors are litigated administratively, and the decisions are the closest thing to case law in this area.

Differing rates among FBOs are not automatically discriminatory. In a 2000 determination affirmed the following year, the agency found no violation where differing FBO lease rates resulted from agreements made at different times on different terms; that determination, Wilson Air Center, LLC v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10 (22 August 2000), was upheld by the Sixth Circuit in 2004 on the holding that “the statute prohibits only unjust discrimination, not all discrimination in rates.” But identical treatment under identical instruments is required, which is why the 2005 decision noted above found a violation on flowage fees charged under identical permits.

Minimum standards must be applied consistently to all providers. A 2007 determination found a partial violation where a sponsor allowed non-tenant aeronautical service providers to compete with the FBO without meeting the same minimum standards, while finding no violation on concession and fueling fees because the complainant had not paid more than other tenants. A 2021 determination found no violation on claims of inconsistent application of minimum standards between two FBOs, uncollected fees, and exclusive fuel tank rights, and reiterated that the administrative process addresses current compliance rather than retrospective remedies between tenant and sponsor.

For a buyer, the useful reading of that record is that the sponsor's discretion is real but bounded, that the boundaries are enforced through a process that takes years and produces prospective relief, and that an earnings stream dependent on winning such a proceeding should be valued accordingly.

4.4 A Development Worth Pricing

FAA Order 5190.6C, issued 20 February 2026, clarified in Chapter 11 that the self-service right extends to aviation gasoline, jet fuel, electric charging, and other fueling sources. Electric charging being within the self-service right means that a future FBO revenue stream from electric aircraft charging carries the same exclusivity limits as fuel. An acquirer underwriting electrification as a growth line should not underwrite it as a protected one.

4.5 The Agency Treats Remaining Term as Economically Material

The central claim of this paper, that remaining term differentiates one FBO position from another, is not an inference from valuation theory. The agency states it.

Chapter 9 of the compliance manual issued 20 February 2026 governs unjust discrimination between aeronautical users. Section 9.6.c sets the baseline: “If FBOs at the airport are making the same or similar uses of the airport facilities under the same circumstances, then, absent some other distinguishing characteristic, the same rates, fees, and rental structure should apply.” Section 9.5.d then lists the distinguishing characteristics that lawfully justify charging two FBOs differently: “minimum investment requirements, demand, location, capital investment risk, ownership of facilities, time remaining on contract terms, and condition of facilities.”

Time remaining on contract terms sits in a federal list of permissible grounds for economic differentiation between competitors on the same field. An appraiser who adjusts for remaining term is applying a distinction the regulator has already recognised, and one an airport sponsor may lawfully price.

A determination issued 8 October 2025 applied it. In Joliet Avionics, Inc. v. City of Aurora, the Director dismissed a discrimination complaint on the ground that the two FBOs were not similarly situated, citing the “timing of the leases (15 years apart),” their differing duration, and differing investment structures. Lease vintage and remaining duration were the reasons two competitors could lawfully pay different rent at the same airport.

No published valuation source quantifies the adjustment. Section 6 sets out what the disclosed transaction and discount rate evidence implies about its size.

4.6 The Rent the Sponsor Is Not Required to Charge

Grant Assurance 24 requires a sponsor to maintain a fee and rental structure making the airport as self-sustaining as possible under the circumstances at that airport. It is widely read as a market rent requirement. It is not one.

Chapter 17 of the 2026 compliance manual states that “the FAA does not consider the self-sustaining requirement to require the sponsor to charge fair market value rates to aeronautical users.” Charges that reflect the cost of the services or facilities satisfy the assurance.

The valuation consequence runs in two directions and both belong in the analysis. An FBO’s ground rent may sit persistently below market with federal sanction, and the spread between contract rent and market rent is a bargain leasehold advantage that contributes real value to the position. But it is an advantage the sponsor is permitted rather than required to continue, it is not protected on renewal, and the compliance manual contemplates rent reset by appraisal for leases longer than five years. A buyer capitalising a below-market ground rent into the purchase price is capitalising a concession with a reset date.

Chapter 18 adds that federal law prescribes no single rate-setting method. A sponsor may use residual, compensatory, hybrid or any other methodology, subject only to the requirement that charges on aeronautical users be fair and reasonable. There is no federal formula to appeal to, which is why the subject airport’s own published schedule and its history of adjustment are the evidence that matters.

4.7 Controlling the Field Is a Risk, Not a Moat

The position most often described as an FBO’s competitive advantage, sole control of the available FBO space at an airport, is the position the agency found unlawful in March 2025.

In Robert V. Smith v. Okaloosa County, Florida, concerning Destin Executive Airport where one operator held both FBO locations, the Director found violations on all three issues raised. The County had violated Grant Assurance 23 by “allowing lease assumptions, consolidations, assignments, and ratifications from 2015, 2016, 2023, and 2024 that prevented other interested applicants from seeking space on the Airport”; Grant Assurance 22 by “allowing lease consolidations and assumptions of all available space for fixed based operators to be controlled by one entity”; and Grant Assurance 5 by accepting those consolidations and approving the resulting long-term instruments. The Director ordered a corrective action plan within thirty days with a recommendation to withhold future airport funding pending approval. The determination is under appeal.

An acquirer underwriting a single-operator field is therefore underwriting two things that point in opposite directions. The position generates pricing power, which is why it commands a premium. It also attracts the complaint that the exclusive rights prohibition exists to support, and Grant Assurance 23 carries no time limit: it runs so long as the airport is used as an airport, unlike most assurances, which for a public agency sponsor expire with the useful life of the facilities and in no case beyond twenty years.

The defensible treatment is to model positional advantage as a scenario with a probability attached rather than to capitalise it as a durable moat. The operator that filed segment data with the securities regulator told its own investors as much: “Atlantic Aviation’s FBOs do not have the right to be the sole provider of FBO services at any airport. The authority responsible for each airport may grant leases to additional operators and new competitors could be established at those airports.”

5. What the Market Evidence Supports

5.1 The Multiple Problem

FBO transactions are commonly discussed in terms of an EBITDA multiple, and comparables circulate. The practice is not wrong. It is applied carelessly more often than not, and the evidentiary basis for it is far weaker than the confidence with which multiples are quoted.

Two arm’s-length FBO multiples appear in primary public documents, four months apart, both struck on 2019 earnings, and in both cases the seller published the arithmetic itself because it was a public reporting entity obliged to.

The Rule 2.7 announcement of 5 February 2021 for the Signature Aviation takeover states that “the enterprise value multiple implied by the Acquisition is approximately 16.0 times Signature’s pre-IFRS 16 continuing group adjusted EBITDA for the year ended 31 December 2019 of $348.7 million.” In June 2021 Macquarie Infrastructure Corporation disclosed that the purchase price for Atlantic Aviation “implies a multiple of Atlantic Aviation’s 2019 Earnings Before Interest Taxes and Depreciation (EBITDA) of 16.2 times.” The Atlantic figure reconciles independently: $4,475 million against EBITDA excluding non-cash items of $276 million for 2019, as reported in the seller’s own Form 10-K, gives 16.21 times.

Three qualifications belong with those two numbers.

They are not strictly like for like. Signature’s denominator is pre-IFRS 16 continuing group adjusted EBITDA, stated that way because IFRS 16 capitalises leases and would otherwise inflate the measure by the rent add-back. Macquarie’s is EBITDA excluding non-cash items, its own non-GAAP measure reconciled in the filing. Both definitions are disclosed; neither is the other.

They are both platform prices. One conveyed roughly 195 locations, the other 69. Neither is evidence of what a single location trades for, and the structural features that support a platform price, geographic diversification across airport sponsors and negotiating scale with fuel suppliers, are precisely what a single site lacks.

They are sensitive to the denominator year. The same $4,475 million against Atlantic’s 2020 EBITDA of $195 million is 23.0 times. Both transactions were struck in 2021 on 2019 earnings, which is itself a disclosure about how the parties treated the pandemic year.

5.2 What Is Disclosed and What Is Asserted

Outside those two transactions, the published FBO multiple literature is assertion. This is a stronger statement than the usual complaint about data scarcity, and it is testable, so Table 3 sets out every published multiple statement located in a search of the trade press, adviser material and valuation guides, with a column for whether any supporting earnings figure accompanies it.

Table 3. Published FBO multiple statements and their evidentiary basis.

Source: Author’s compilation from the cited announcements, filings and trade publications. See references.

Two rows carry an earnings figure. Six do not. The two that do are the two where a securities regulator compelled the arithmetic.

The pattern is worth naming because it changes how the rest should be used. The most frequently quoted practitioner ranges, the 4.5 to 6.5 band and the 5 to 15 band, come from authors who in both cases declined to defend them as benchmarks. The June 2000 article most often cited for FBO multiples states plainly that “the key point to understand here is that there is not an appropriate answer to the question, ‘What kind of multiples are being paid?’” The band survives in circulation; the disclaimer attached to it does not.

Two further absences are worth recording, because they bound what a practitioner can rely on. Searches of the principal appraisal journal and the professional body’s catalogue return no article or publication on FBOs, airports or aviation leaseholds. The standard American Society of Appraisers taxonomy of real property going concerns lists seventeen simple and seven complex types; FBOs and airport businesses appear on neither list. And no published source located applies EBITDAR, the lease-adjusted measure used across hotels and aircraft leasing, to an FBO. The property type sits outside the going-concern literature that would otherwise govern it.

5.3 The Network Transactions

The transactions themselves are public even where the multiples are not, and they establish the direction of institutional interest.

Table 4. Principal FBO network transactions.

Terms as reported in the parties' own announcements and filings. The Signature multiple appears in the Rule 2.7 announcement of 5 February 2021; the Atlantic multiple in the seller's press release of 7 June 2021 and reconcilable to its Form 10-K. The 2026 transaction is a partial-interest recapitalization rather than a full-control sale and should not be characterized as an arm's-length exit price.

The 2026 recapitalization is instructive and easy to misread. Against a $4.475 billion entry in 2021, a valuation of nearly $10 billion five years later implies substantial appreciation over a period in which the platform grew from 69 to 105 locations. But no multiple was disclosed, the transaction conveys a significant interest rather than control, and a partial-stake valuation is not the same evidentiary object as a whole-company sale price. A practitioner should treat it as evidence that institutional appetite persists and not as a comparable.

5.4 The Normalization Problem

There is also a definitional issue that no multiple resolves. Reported EBITDA at owner-operated FBOs frequently needs normalizing for owner compensation, related party rent, deferred maintenance, and capital expenditure that has been postponed. Normalizing adjustments are where most of the disagreement in an FBO negotiation actually lives, and they are not comparable across transactions even when the multiples appear to be.

A multiple imported from a transaction at a different field carries that field's traffic, that agreement's remaining term, and that operator's revenue mix embedded in it. Applying it to a target with nine years remaining and a thin contract fuel margin is not comparison, it is substitution. The adjustments have to be made explicit: term, exclusivity, mix, capital obligations, and the condition of the improvements.

5.5 Market Structure

The competitive analysis in two antitrust proceedings supplies an official statement of how this market works, and it is more useful than the trade commentary.

In a 2016 action challenging an FBO network acquisition, the Department of Justice defined the relevant product market as full-service FBO services and the relevant geographic markets as individual airports, requiring divestiture at six of them. The complaint's findings are directly usable in a valuation: FBO entry or expansion requires extensive lead time and capital investment, it often takes several years for a new FBO to build a significant customer base, and the largest source of revenue for an FBO is fuel sales.

A 2001 action concerning a single airport made the point about access explicitly, noting that general aviation customers cannot obtain fuel, hangar, ramp, and other services except through an FBO authorized by the local airport authority, and that there are significant sunk costs in building an FBO with a permitting process that can take a year before construction begins.

Two independent censuses establish how rare on-field competition is. GAO-20-16 counted 3,070 FBOs at 3,016 airports in the contiguous United States as of March 2019, of which 2,418 airports, or 89.9 percent, had a single FBO, 203 had two and 69 had three or more. ACRP Synthesis 108, working from a broader definition that includes sponsor-operated and university operations, counted 3,661 FBOs at 3,233 airports as of December 2018 and put single-FBO airports at 91 percent. The counts differ because the definitions differ; the concentration finding does not. ACRP also found that only 339 of 3,661 locations, 9.3 percent, sit in large networks, against 1,666 independent locations and 1,562 publicly or school-owned.

Demand is concentrated in the segment FBOs serve rather than in general aviation as a whole. The FAA Aerospace Forecast for fiscal years 2026 to 2046 projects the active general aviation fleet growing 0.6 percent a year while the turbojet fleet grows 3.0 percent and jet hours 3.2 percent, the latter attributed to the expanding business jet fleet. An FBO’s revenue tracks the jet numbers, not the fleet total.

Airport-level geographic markets and multi-year entry lags are the structural facts that make an FBO position valuable. They are also the facts that make a nine-year remaining term a different asset from a twenty-two-year one.

6. Pricing the Term

Section 4.5 established that the agency treats remaining term as a lawful basis for economic differentiation. Section 5 established that two transaction multiples are disclosed and that the sector’s weighted remaining term is disclosed. Nobody has put the two together in print. This section does, using only figures the parties published themselves.

6.1 The Arithmetic

An earnings stream growing at rate g and discounted at rate r, running to a horizon of N years rather than in perpetuity, is worth a fraction of the perpetuity value. That fraction is 1 − ((1+g)/(1+r))^N. Multiplying a perpetuity multiple by it gives the multiple a finite stream supports.

The discount rate does not have to be assumed. Macquarie disclosed one. The lease note to its 2019 Form 10-K states that “at December 31, 2019, the weighted-average remaining operating lease term was 18.7 years and the weighted average discount rate was 8.5%.” That is the rate the sector’s second-largest operator applied to its own FBO ground leases, disclosed under the lease accounting standard, in the same filing year as both transaction multiples. Growth is an assumption and is stated as one at 2.5 percent a year.

Table 5. EBITDA multiple supported by a finite earnings stream at a discount rate of 8.5 percent.

Source: Author’s calculation. Discount rate of 8.5 percent as disclosed in Macquarie Infrastructure Corporation, Form 10-K for fiscal year 2019, lease note. Growth of 2.5 percent is an assumption. Figures are rounded.

6.2 What the Disclosed Transactions Imply

The disclosed weighted average remaining term in 2019 was 19.0 years. At the disclosed discount rate, 19 years of earnings supports 11.0 times. Both 2021 transactions cleared at 16.0 and 16.2 times.

The gap is about five and a half turns of EBITDA, or roughly a third of the price. It has to be explained by something, and there are only three candidates.

The first is renewal. Holding the discount rate at 8.5 percent, reaching 16.2 times requires a horizon of about 63 years. The compliance manual directs that the agency “should not consent to proposed lease terms that exceed 50 years,” because a longer term “may be considered a disposal of the property.” No single instrument can deliver 63 years on a federally obligated field. The horizon is therefore reachable only through successive renewals, which means both buyers priced renewal as close to certain.

The second is a lower discount rate. Holding the horizon at 19 years, 16.2 times implies a discount rate of about 3.9 percent at the same growth assumption. That is below the rate the operator applied to its own leases by more than four and a half points, and it is not a rate either buyer disclosed.

The third is that platform earnings are not the same object as the weighted lease term suggests. A network of 69 or 195 locations rolls renewals continuously; no single expiry is material, and the operator disclosed as much, reporting that “no individual FBO generated more than 10% of Atlantic Aviation’s gross margin” and that seven leases representing about 12 percent of gross margin were due for renegotiation within five years. Diversification across sponsors converts a set of finite leaseholds into something closer to a renewing stream.

All three explanations point the same way for the practitioner, and it is the opposite direction from how platform multiples are usually borrowed. Whatever justifies 16 times at the platform level, whether renewal certainty, a lower cost of capital, or the statistical effect of holding two hundred independent expiries, is a property of the platform. A single FBO with nineteen years left and one sponsor has none of it.

6.3 The Practical Test

The table gives a way to test a proposed multiple rather than to source one. A practitioner offered a comparable multiple can ask what horizon it implies at a defensible discount rate, and compare that horizon to the term actually remaining on the subject’s agreement. Where the implied horizon exceeds the remaining term by a wide margin, the difference is the price being paid for renewal, and it should be identified and defended as such rather than buried in the multiple.

That framing also fixes the direction of the adjustment between two FBOs on the same field. The one with nine years left is not worth a modest discount to the one with twenty-five. At 8.5 percent and 2.5 percent growth, nine years supports about 40 percent of perpetuity value and twenty-five years about 76 percent, and the same earnings therefore support multiples that differ by roughly a factor of two before any other difference is considered.

Two limits belong with this. The arithmetic assumes level earnings growth and no reversion proceeds to the tenant, which matches the standard airport ground lease, where title to tenant improvements vests in the sponsor at expiration. And it prices the earnings stream, not the position: an operator expecting renewal on known terms holds something materially better than the table shows, which is the point of separating the renewal question out and pricing it openly.

7. Allocating the Price

At closing a single price is agreed. Then it has to be allocated, and buyer and seller have opposing tax incentives on where it lands. An allocation that is simply negotiated, without a supportable derivation, is exposed on both sides.

7.1 The Defensible Sequence

The defensible approach values each component on its own basis and reconciles to the transaction price.

1. Value the leasehold improvements as property, on the remaining ground lease term, with reversion modeled.
2. Value the operating business on normalized earnings, adjusted for the remaining agreement term and its transfer conditions.
3. Identify tangible personal property separately: fuel trucks, tugs, ground support equipment, shop equipment.
4. Test what remains against the intangible position, and be explicit about how much of it is the operating agreement rather than goodwill.

Step four is where the analysis earns its keep. An FBO's intangible value is heavily concentrated in a right granted by a public body for a fixed term on stated conditions. That is a different asset from goodwill, it has a determinable life, and it should not be labeled goodwill because the residual arithmetic put it there.

7.2 The Tax Line

The allocation has consequences that make the distinction in step four more than semantic.

An applicable asset acquisition is allocated under the residual method of section 1060, with assets assigned to seven classes and both parties required to file Form 8594. Class V takes all assets not falling in another class, which is where real property and the FBO leasehold land. Class VI comprises section 197 intangibles other than goodwill and going concern value, which is where an airport operating right lands. Class VII is goodwill and going concern value.

Class VII being the residual has a consequence the parties should confront before signing. Every dollar of purchase price not defensibly allocated to the leasehold in Class V or to an identified operating right in Class VI falls into goodwill and going concern value by arithmetic rather than by analysis. The appraisal question and the tax question are the same question, and the party that has not done the appraisal work does not get to argue the tax position.

A right granted by a governmental unit is expressly a section 197 intangible. The regulation provides that section 197 intangibles include any license, permit, or other right granted by a governmental unit, including an agency or instrumentality, even where the right is granted for an indefinite period or is reasonably expected to be renewed indefinitely. An FBO operating agreement or permit issued by a municipal airport sponsor falls within that language, which places it in Class VI with fifteen-year amortization.

A leasehold interest in land does not. The regulation provides that section 197 intangibles do not include any interest in land, and separately excludes an interest as a lessee under an existing lease of tangible property. The leasehold is therefore outside section 197 and is recovered over the lease term rather than over fifteen years.

The two also diverge on renewal, which is the point at which the distinction becomes expensive. Section 197(f)(4)(B) provides that any renewal of a license, permit or other right granted by a governmental unit “shall be treated as an acquisition,” starting a fresh fifteen-year period for the costs incurred in connection with that renewal. Renewing a lease gets no such treatment. On a property type whose economics turn on serial renewal, the characterisation determines not only the initial recovery period but the treatment of every renewal after it.

Two assets, both intangible in ordinary speech, both arising from the same document set, recovered on different schedules. Where the remaining lease term is materially shorter or longer than fifteen years, that difference is worth real money, and it points the parties in opposite directions on the allocation.

No published ruling, decision, or determination allocating an FBO purchase price between these components could be located. The tax question is therefore open, the incentive to take an aggressive position is unconstrained by precedent, and a documented derivation is the only protection either party has.

8. Diligence

Buy-side diligence should test the following, in roughly this order of consequence.

• Read the executed agreement, not the summary. Consent, exclusivity, and minimum standards are where surprises live, and federal guidance expects the sponsor to have retained consent rights.
• Establish the remaining term and the renewal mechanics. Including whether rent resets by appraisal, which the compliance manual contemplates for leases longer than five years.
• Reconcile the rent roll to the leases. Not to the offering memorandum.
• Separate contract from retail fuel and test margin durability rather than gallon count. There is no industry benchmark to check the result against, so the subject's own history is the only evidence.
• Ask who else could come onto the field, and whether the sponsor has signaled anything. Federal law will not protect an incumbent from a second entrant, and the sponsor may enter itself.
• Test the minimum standards both ways. As an inherited obligation and as a barrier protecting the position.
• Inspect the improvements against the obligations the agreement imposes, since deferred capital transfers with the business.
• Screen the field for firefighting foam history. Contamination is a live issue at fuel and fire training locations and can impair a later exit. Two PFAS compounds came within the scope of the standard Phase I assessment in July 2024, so a clean report predating that change may not have screened for it. The PFAS and AFFF exposure map is a starting point, and the companion analysis of PFAS in hangar valuation sets out the diligence question in full (Carter 2026).
• Model the terminal value honestly. If the agreement expires before the hold period ends, the exit assumption is the entire deal.

9. Limitations

Six limitations bear on how this paper should be used.

There is no literature and no current guide note. The component approach set out here is assembled from the standards' identification and analysis requirements, from the golf and hotel allocation literature, and from the author's practice. It is not drawn from an FBO-specific authority, because none exists.

The transaction evidence is two observations, both on the same year’s earnings. Signature at 16.0 times and Atlantic at 16.2 times were struck four months apart in 2021, both on FY2019 EBITDA, and on definitions that differ enough that they are not strictly comparable to each other. Two points do not establish a range, and this paper does not claim they do. What they establish is that the practitioner bands circulating in the trade rest on no disclosed earnings at all, and that both authors of the most-quoted bands declined to defend them as benchmarks.

The term-adjusted arithmetic in Section 6 rests on one disclosed discount rate and one assumed growth rate. The 8.5 percent comes from a single filer in a single year, applied to its own lease portfolio under the lease accounting standard rather than to earnings, and the 2.5 percent growth is an assumption stated as one. The ladder is a way to test a proposed multiple for internal consistency, not a source of multiples. Substituting a different discount rate moves every figure in Table 5.

The two 2025 Part 16 determinations bear differently on the analysis. Joliet Avionics was dismissed and is a Director’s Determination rather than a Final Agency Decision. Okaloosa County found violations but is under appeal, and a determination under appeal establishes the agency’s current position rather than a settled rule.

Several figures a practitioner needs have no published source: FBO fuel margins, the retail-to-contract split, a current multiple range, a national flowage fee benchmark, and any allocation of an FBO purchase price in a published decision. Where this paper would otherwise give a number, it states that none exists.

The administrative and antitrust record is thin and old in places. The Part 16 determinations cited span two decades and turn on their facts; the antitrust complaints establish market structure but are not adjudicated findings, since both resolved by consent.

10. Conclusion

Most disputed FBO valuations come down to two questions: how much of the earnings is really hangar rent, and how long does the operating agreement actually run.

The first now has filed evidence behind it. Hangar rental was 15 to 20 percent of gross margin at a national network, against fuel at 60 to 63 percent. That is large enough that pricing it at a fuel multiple, or at a blended enterprise multiple, produces a material error in a predictable direction.

The second now has arithmetic behind it. At the 8.5 percent discount rate Macquarie disclosed for its own FBO ground leases and 2.5 percent growth, nineteen years of earnings supports 11.0 times EBITDA. Both 2021 platform transactions cleared above 16 times. Reaching that on term alone would take about 63 years, more than the fifty the FAA will consent to, so what the buyers paid for was renewal. A single-location FBO with one sponsor and nineteen years left holds the term without holding what makes renewal look certain, and importing the platform multiple imports an assumption that does not travel.

The remaining term is the constraint on everything else. The same owner reported earnings-weighted average remaining lease term as a headline portfolio metric, which is the correct treatment. An FBO position is a right to operate on someone else's land for a stated period, granted by a public body that federal law forbids from making it exclusive, transferable only with a consent the agency expects the sponsor to have retained. Nine years of that is not the same asset as twenty-two years of it. At 8.5 percent and 2.5 percent growth the two support multiples that differ by roughly a factor of two on identical earnings, and no borrowed multiple encodes the difference.

What the field lacks is evidence rather than method. A disclosed transaction series, a published margin benchmark, a national survey of percentage-of-gross and flowage rates built from airports’ own published schedules, or a single litigated purchase price allocation would each do more for the quality of FBO valuation than any refinement of technique. Until one of them exists, the discipline available is to value the components separately, document each derivation, and be explicit about which inputs came from the subject and which came from judgment.

References

Appraisal Institute. 2011. A Business Enterprise Value Anthology. 2nd ed. Edited by D. C. Lennhoff. Chicago: Appraisal Institute.

Appraisal Institute. 2020a. The Appraisal of Real Estate. 15th ed. Chicago: Appraisal Institute.

Appraisal Institute. 2020b. Guide Note 5, "Appraisals of Real Estate with Related Personal Property, Business Property or Intangible Assets." Retired August 7, 2020.

Appraisal Standards Board. 2024. Uniform Standards of Professional Appraisal Practice. 2024 edition, effective January 1, 2024. Washington, DC: The Appraisal Foundation.

BBA Aviation plc. 2016. Annual Report and Accounts 2015. London: BBA Aviation plc.

Brown Bidco Limited. 2021. "Recommended Cash Offer for Signature Aviation plc." Rule 2.7 Announcement, February 5, 2021. London Stock Exchange Regulatory News Service.

Carter, C. W. 2026. "PFAS and AFFF: How Firefighting Foam Contamination Affects Hangar Value." Aeronautical Valuation Research Series, Valuation Takes Flight LLC. https://valuationtakesflight.com/research/pfas-afff-hangar-valuation.html

Federal Aviation Administration, Office of Airport Compliance and Management Analysis. 2017. Questions and Answers: FBO Industry Consolidation and Pricing Practices. December 7, 2017.

Federal Aviation Administration. 2007. Exclusive Rights at Federally-Obligated Airports. Advisory Circular 150/5190-6, January 4, 2007.

Federal Aviation Administration. 2023. Minimum Standards for Commercial Aeronautical Activities. Advisory Circular 150/5190-8, December 7, 2023.

Federal Aviation Administration. 2025. Assurances: Airport Sponsors. April 2025 edition.

Federal Aviation Administration. 2026. Airport Compliance Manual. Order 5190.6C, effective February 20, 2026.

Federal Aviation Administration. 2026b. FAA Aerospace Forecast, Fiscal Years 2026-2046. Washington, DC: FAA.

Government Accountability Office. 2019. Airports: Information on Prices for Aviation Services and FAA's Oversight of Grant Requirements. GAO-20-16. November 26, 2019.

Government Accountability Office. 2026. Airports: Online Information Is Widely Available for General Aviation Fuel Prices but Not for Required Fees. GAO-26-108578. August 11, 2026.

Hirsh, L. A. 2021. "Valuation of Private Golf and Country Clubs for Ad Valorem Taxation." The Appraisal Journal 89 (2): 85-94.

Hirsh, L. A. 2023. Golf Property Analysis and Valuation. 2nd ed. Chicago: Appraisal Institute.

Hodges, M. A. 2000. "Determining FBO Multiples." Airport Business, June 2000.

Hodges, M. A. 2016. "Airport Reversion Clauses." Airport Business, December 28, 2016.

International Association of Assessing Officers, Special Committee on Intangibles. 2017. "Understanding Intangible Assets and Real Estate: A Guide for Real Property Valuation Professionals." Journal of Property Tax Assessment and Administration 14 (1): 41-91.

International Valuation Standards Council. 2025. International Valuation Standards. Effective January 31, 2025. London: IVSC.

Joliet Avionics, Inc. v. City of Aurora, Illinois, FAA Docket No. 16-24-06, Director's Determination (Oct. 8, 2025).

Macquarie Infrastructure Corporation. 2018. Annual Report on Form 10-K for the fiscal year ended December 31, 2017. U.S. Securities and Exchange Commission EDGAR.

Macquarie Infrastructure Corporation. 2020. Annual Report on Form 10-K for the fiscal year ended December 31, 2019. U.S. Securities and Exchange Commission.

Macquarie Infrastructure Corporation. 2021a. Annual Report on Form 10-K for the fiscal year ended December 31, 2020. U.S. Securities and Exchange Commission EDGAR.

Macquarie Infrastructure Corporation. 2021b. "MIC Announces Agreement to Sell Atlantic Aviation." Exhibit 99.1 to Current Report, June 7, 2021. U.S. Securities and Exchange Commission EDGAR.

Robert V. Smith v. Okaloosa County, Florida, FAA Docket No. 16-24-01, Director's Determination (Mar. 20, 2025), on appeal.

Ross, G. 1999. "Eye on Multiples." Airport Business, September 1999.

Royal Institution of Chartered Surveyors. 2025. RICS Valuation: Global Standards. Effective January 31, 2025. VPGA 4, Valuation of Individual Trade Related Properties. London: RICS.

Simpson, J. A. 1998. Valuation of Marinas. Chicago: Appraisal Institute.

Transportation Research Board. 2011. Guidebook for Developing and Leasing Airport Property. ACRP Report 47. Washington, DC: National Academies Press.

Transportation Research Board. 2018. Airport Operator Options for Delivery of FBO Services. ACRP Synthesis 86. Washington, DC: National Academies Press. https://doi.org/10.17226/25039

Transportation Research Board. 2019. Airport Management Guide for Providing Aircraft Fueling Services. ACRP Research Report 192. Washington, DC: National Academies Press. https://doi.org/10.17226/25400

Transportation Research Board. 2020. Characteristics of the FBO Industry 2018-2019. ACRP Synthesis 108. Washington, DC: National Academies Press.

U.S. Department of Transportation and Federal Aviation Administration. 2013. "Policy Regarding Airport Rates and Charges." 78 Federal Register 55330 (September 10, 2013).

United States v. BBA Aviation plc, Landmark U.S. Corp LLC, and LM U.S. Member LLC, No. 1:16-cv-00174 (D.D.C., complaint filed February 3, 2016). Proposed Final Judgment and Competitive Impact Statement, 81 Federal Register 7144 (February 10, 2016).

United States v. Signature Flight Support Corp., Ranger Aerospace Corp., and Aircraft Service Group International, Inc., No. 01 CV 1365 (D.D.C., filed June 20, 2001).

Wang, Y. 2016. "Identifying and Prioritizing Critical Success Factors for Fixed Base Operators in the United States: A Mixed Method Approach." PhD diss., Purdue University.

Wilson Air Center, LLC v. Federal Aviation Administration, 372 F.3d 807 (6th Cir. 2004).

Wilson Air Center, LLC v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10, Director's Determination (Aug. 22, 2000).

Wisconsin Department of Transportation. 2014. Wisconsin Airports Rates and Charges Survey: 2013. June 2014.

26 C.F.R. sections 1.197-2 and 1.338-6; 26 U.S.C. section 1060.

49 U.S.C. sections 40103(e) and 47107(a)(4).

Federal Aviation Administration Part 16 determinations: Jet 1 Center, Inc. v. Naples Airport Authority, Docket 16-04-03 (Final Agency Decision, July 15, 2005); Wilson Air Center, LLC v. Memphis and Shelby County Airport Authority, Docket 16-99-10 (Director's Determination, August 2, 2000; Final Agency Decision, August 30, 2001); Jimsair Aviation Services, Inc. v. San Diego County Regional Airport Authority, Docket 16-06-08 (Director's Determination, April 12, 2007); CTI Aviation Services LLC v. Millington Airport Authority, Docket 16-20-02 (Director's Determination, September 23, 2021).

This paper is research and general information for professionals evaluating aviation real estate. It is not appraisal, legal, investment, or tax advice, and it does not create an engagement.