FBO Chain Atlantic Pushes To Be First Mover In AAM

With prime locations at airports and a healthy customer base, the fixed-based operations (FBO) that support private and business aviation have a key role in enabling the rollout of advanced air mobility (AAM).

“We’re a case study of how we triangulate the wishes of OEMs, communities and FBOs as a first mover advantage to help stand up AAM,” says Kevin Cox, CEO of Vertiports by Atlantic, which was formed a year ago when FBO chain Atlantic Aviation acquired the vertiports business of infrastructure giant Ferrovial.

Atlantic also acquired Ferrovial’s “secret sauce,” says Cox—a sophisticated demand model based on cellphone data that shows how many people go from point A to point B, whether for business, pleasure or commuting, how much they earn and will pay.

“Based on 20 years of building algorithms from our prior owner Ferrovial, which builds and manages tollways all over the globe, we have the ability to say, if we can save somebody X amount of time, what is that passenger willing to pay to get on this lane?” says Cox.

The acquisition by Atlantic, the second-largest FBO network with 110 sites, provided the opportunity to apply the demand model to AAM. “A portion of those FBOs are going to be excellent candidates that fall right within the heat maps of where we believe we can move passengers to and from,” he says.

That process is ongoing, as Atlantic ensures there is real demand there before spending money to electrify an FBO. “We will never invest a significant amount of capital unless we can prove there is the demand there and we have a willing operator that wants to fly there,” Cox says.

“We’ll never build anything on spec. So, we don’t, at this point, look at secondary and tertiary markets. We look at the thickest markets,” he says. “Where are those nodes that are going to derive the most commercial viability for any potential operator?”

Vertiports by Atlantic is agnostic to the type of electric vertical takeoff-and-landing (eVTOL) aircraft, its operator and the business model, “but we know that there are dense markets with great need to be able to move people from point A to point B, or point B to point C,” he says.

So far, the delays in OEMs certifying their eVTOLs are not a concern.

“It’s not been a problem because Ferrovial was focused strictly on greenfield and brownfield sites such as city centers,” Cox says. “We still ... believe there’s huge potential to be able to fly into downtown Miami or downtown Dallas.

“But now, having the access to and strength of the FBO network that we have, we have the fungibility to get those FBOs up quickly and it doesn’t require the same amount of time or necessary capital as when we are going out and leasing a new site,” he says.

Atlantic has non-aviation sites under lease, but they need additional analysis to ensure the airspace and ground space will work. Using existing FBOs allows the company to stand up AAM infrastructure quickly. “It doesn’t mean it can happen overnight, but it gives us a little bit of time to build the pipeline into city centers and secure the leases,” Cox says.

Under an agreement that predates the acquisition of Ferrovial Vertiports, Beta Technologies has installed charging stations at seven Atlantic FBOs as it builds out a network to support early customers for its electric aircraft including Bristow and UPS. Now Atlantic is building the case to electrify other locations.

“We’re working with an OEM today at FBO X, and their initial cadence doesn’t require high-speed chargers,” Cox says. “Then we can bring in charging cubes that don’t require a significant amount of a new infrastructure, just roll them in and basically plug them into existing electrical grids.”

There will be operators that want a high enough cadence from day one to justify high-speed charging infrastructure, he says. “A perfect example is 6N5 [East 34th Street Heliport in Manhattan]. We have committed to electrifying that site, and we’re neck deep working with utility company on how best to bring the requisite power to the site.”

Which will be the first Atlantic location to turn on? “Obviously 6N5 is in the works, but we also have other sites in Florida that we intend to bring up quickly, as well as in Southern California. And those from the outset will be at FBO locations,” Cox says.

One complication is there are rival electric aircraft charging standards. Archer, Beta, and others have adopted the automotive Combined Charging System (CCS) while Joby has developed the aerospace-unique Global Electric Aviation Charging System (GEACS).

“We’re agnostic, but we’re not going to go put a CCS system in if we only have a GEACS operator that wants to operate there,” he says. “That doesn’t mean we wouldn’t put a CCS system in later, or vice versa, depending upon the availability of ramp space.”

It will be operators that set the pricing for air taxis to cover their costs of procuring and operating the aircraft, but it will include the cost of using the infrastructure. “Our piece of the puzzle is we will invest X amount of capital. We need a return on that capital,” Cox says.

“But we also recognize it has to be cost effective for the operator. It’s no good to go in and charge them 2X and it busts their business model,” he says. “We’re going to put X dollars in, and we need a return on that. But it doesn’t have to be on day one. We’re an infrastructure provider, so it’s not like we’re looking for a return in a year. We’re looking to scale and build.”

“We try as part of our overall business model to recognize the fact that we’re in a nascent industry,” Cox says. “Scale is important. We try to keep our costs down on year one, two and three. That allows them to scale and ultimately get to a price point that is compatible for all businesses.”

Atlantic’s goal is to be competitive on costs, he says. “For example, we plan on making the electricity a pass through. We’re not marking that up. This business will evolve over time, but our goal is to cover our costs and make a margin that will provide an incentive to the operator to continue to utilize that site.”

Will a potential influx of travelers using AAM affect traditional private and business aviation customers, and will FBOs cope? Key early eVTOL air taxi routes will be airport shuttle services, but not all users will be going to the main terminal. Cox cites an Atlantic site in southern Florida where 20% of the users are going to the terminal and 80% to places outside the airport.

“It is important to understand where the demand is going and, if it is primarily to the terminal, then how you get those passengers from the FBO to the terminal is critical. But in many locations, it’s a combination of traffic type and not just one,” he says.

Infrastructure at FBOs can support a certain level of AAM traffic and still coexist with existing users in terms of ramp, terminal, and parking capacity. “There may be locations where, if demand grows the way we expect it to, we won’t be able to accommodate, and there may be a need for another site,” he says.

Existing users of private and business aviation are expected to be early adopters of AMM. “We do believe there’s going to be strong crossover, but we also believe that [there will be new customers],” Cox says. While it will depend on OEMs achieving their promise of trip costs on par with Uber Black—and a rush-hour taxi to the airport—“We do believe that it’s not just going to be the front of the airplane, the private airplane folks, that ultimately will be able to access this.”