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The Hangar Games

Negotiate a Win-Win Lease

Your aircraft needs a home.

The hangar owner – whether a fixed base operator (FBO) or the airport authority – who can provide that home, has three expectations: a good tenant, a positive cash flow, and a reasonable real estate investment return.

Since both you and your prospective landlord want an agreement with favorable terms, the relationship should be based on mutual respect and common ground, and approached with a win-win attitude. These seven steps can help you accomplish this goal:

  1. Do your homework – Start the process with research, so you can enter into negotiations with reasonable expectations. Become familiar with the rates being charged by similar hangar owners at the airport you are considering, as well as at other airports in the area.
  2. Do not overstate your fuel needs (uplift) – If you’re planning to negotiate a special hangar rate based on the amount of fuel you’ll be purchasing, be sure to state your potential needs realistically. Most hangar owners specify the amount of fuel in the agreement, and tie it to a performance metric, which could change if stated targets are not achieved.
  3. Establish a fair fuel price – In dealing with the fuel provider on the field, it’s important to set a fair fuel price for your travel. Most FBO owners and airport authorities who have the fuel concession are willing to work with their base tenants on establishing a reasonable discount off the posted fuel price. However, aircraft owners should not expect to receive both a deep fuel discount and a discount on the hangar space. Again, think win-win.
  4. Read the rules and regulations of your lease – This document spells out the dos and don’ts for tenants. Understand that your hangar lease may be a sublease. If you are dealing with an FBO, know that it most likely does not own, but leases from the airport authority, the land the hangar sits on. Therefore, your agreement with the FBO is essentially a sublease, and so ultimately must conform to the terms of the master lease afforded the FBO by the airport authority.
    As a signatory to a hangar sublease, you have a right to know the contents of the FBO’s master lease, because you also must comply with its provisions. In addition, terms for rate increases in your sublease should be similar to those in the master lease, and the term of your sublease cannot be longer than the master lease term.
  5. Avoid becoming a “Hangar Queen” – This term is used to describe a hangar tenant who does not live up to the original terms of an agreement. His or her airplane may be underutilized, sitting in the hangar collecting dust, and not buying fuel. Or the owner may be difficult, late in paying rent but demanding a premium position in the hangar.
  6. Have reasonable service expectations – The FBO or airport authority staffs its facilities based on an average operational day. Some days may be slower than usual, so requests to pull an aircraft from the hangar, fuel, and position for departure can be satisfied quickly. On other days, the FBO can get quite busy and service requests may stack up, especially during bad weather periods. Be especially patient should your aircraft need deicing – or even a second deicing – before departure. Your life may depend on it.
  7. Be proactive with service requests – When feasible, make your requests well in advance so the FBO can provide you with a good customer service experience. Also, take time to get to know the FBO employees. Most are eager to please, love their jobs, and are willing to go the extra mile for an owner who understands and respects their work.

Taking time to develop a satisfactory hangar lease helps ensure that your prized asset is in good hands. BAA

John Enticknap and Ron Jackson are principals of Aviation Business Strategies Group, an aviation services consulting firm providing assistance in successful FBO Operations, Customer Service Training, and IS-BAH registration compliance and auditing.


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