Kenn Ricci's complaint about private equity in the FBO business is really a complaint about price. When a ground handler that once sold for about six times EBITDA now trades at 15 to 20 times, the buyer has to find more money from the same ramp, and that money comes from aircraft owners and charter clients. The fees we argue about at every busy airport are, in large part, the repayment schedule on those purchase prices.
Ricci, who chairs Flexjet and oversees Sentient Jet and the broker FXAir, made the case on David Senra's podcast, as reported by Private Jet Card Comparisons. He said he no longer favors mergers or private equity, called mergers a sign that a company cannot grow on its own, and argued that paying 10 to 12 times cash flow for market share usually makes less sense than investing that capital in the existing business. He also said that absorbing a workforce of 30% or 40% of your own headcount makes cultural integration close to impossible.
He was candid about his own part in the story. In 2005 he and Allied Capital bought Mercury Air Centers, then about 18 locations, for $80 million. They roughly doubled it and sold it to Macquarie in 2007 for $615 million, with Ricci holding 20%. He now describes the FBO market as a duopoly and said that, in many ways, he created this monster.
The numbers explain the behavior better than any argument about greed. The Mercury sale price was about 7.7 times the purchase price, since $615 million divided by $80 million is 7.69, in roughly two years. Per location, using his own approximate count, $80 million over 18 sites is about $4.4 million each, while $615 million over roughly 36 sites is about $17 million each, close to four times as much. Now look at the multiples he cited. At six times EBITDA, a buyer earns about 16.7 cents of operating profit for every dollar paid, because one divided by six is 0.167. At 20 times, the same dollar earns 5 cents. To get back to the old return, the owner needs more than three times the EBITDA from roughly the same airports, and the only fast way to do that at a captive airfield is through fees.
That is why I read Ricci as half right. I invest in private equity, and the ownership structure is not the problem on its own. Paying a price that only works if the customer has nowhere else to go is the problem. In real estate and hotels, where EMC Acquisitions invests, a buyer who overpays for a building can still lose the tenant to the building across the street. At many airports there is no building across the street. When one or two chains control the ramp, the multiple stops being a bet on growth and becomes a bet on pricing power.
This lands directly on the quote. At Melion, clients compare aircraft and operators on one screen, and FBO handling, ramp and event charges sit inside the price we show them. In my earlier post on Signature's event fees I counted nine named events where those charges will still apply from 2027, and noted fees for large jets above $20,000. Those line items are where a 20 times multiple becomes visible to a traveler. A marketplace can make them transparent and can route a trip to a second FBO where one exists, but it cannot make a single-FBO airport competitive.
Ricci's line that the balance sheet is the whole game is the right test for whoever buys the next chain. A strong balance sheet lets an owner earn its return through better service and more traffic over time. A stretched one forces the return out of the next invoice. I expect regulators, NBAA and large operators to keep pressing on FBO pricing, and I expect the next buyers to discover that clients notice. Charter demand responds to total trip cost, and ground fees are now a real share of it.