Demand for FBO services is driven by total general aviation aircraft in operation and average flight hours per aircraft. According to the FAA, both factors have recently experienced strong growth. According to the FAA, from 1994 to 2002, the fleet of fixed wing turbine aircraft, which includes jet aircraft but excludes smaller turbine aircraft, increased at an average rate of 8.3% per year. Fixed wing turbine aircraft are the major consumers of FBO services, especially fuel. Over the same period, the general aviation hours flown by fixed wing turbine aircraft have increased at an average rate of 8.6% per year. These factors have contributed to an average annual growth rate in general aviation jet fuel consumption of 9.8% from 1994 to 2002.

The FAA is forecasting continued growth in general aviation jet fuel consumption on average of 5.1% per year from 2003 to 2015.

The growth in the general aviation market has driven the demand for services provided by FBOs, especially fuel sales. The general aviation market is serviced by FBOs located throughout the United States at various major and regional airports. According to Aviation International News, there are approximately 4,500 FBOs throughout North America, with generally one to five operators per airport. Most of the FBOs are privately owned by operators with only one or two locations. There are, however, a number of larger industry participants, including Signature Flight Support owned by BBA plc.

Atlantic was founded by the du Pont family in the 1930s and remained a family owned company until 1997. In April 2004, the Company, through a wholly owned subsidiary, signed a sale and purchase agreement with the selling shareholders to acquire 100% of the shares in Executive Air Support Inc.

Atlantic has high quality facilities and operations and focuses on attracting customers who desire high quality service and amenities. Fuel sales represented approximately 74% of Atlantic’s revenue in 2003. Other services provided to these customers include de-icing, aircraft parking, hangar services and catering. Atlantic is the operator of fuel farms for the airport at two of its locations. Fuel is stored in fuel farms for Atlantic on its own account or, for a fee, for commercial carriers and other FBOs. Each Atlantic FBO operates refueling vehicles, either owned by the FBO or by the fuel company, and either maintains or has access to fuel storage tanks to support its fueling activities. Other services provided to commercial carriers include refueling from carriers’ own fuel supplies stored in the fuel farm, de-icing and ground and ramp handling services.

The price for fuel is largely dependent on the wholesale market price. Atlantic sells fuel to the users of its FBOs either at a contracted price, at a price negotiated directly with the customer or at the daily fuel price. While fuel prices can be volatile, Atlantic is generally able to pass fuel cost increases through to customers.

Atlantic’s FBO facilities operate on long-term leases from airport authorities or local government agencies. Atlantic and its predecessors have a strong history of successfully renewing their leases at their FBOs, and Atlantic has held some of its leases since the 1940s, 1950s and 1960s. The leases have an average length of approximately 17 years.

Total Cost of Revenue increased from $7,717 thousand in the three months ended March 31, 2003 to $10,562 in the three months ended March 31, 2004.

Gross profit increased 28.3% from $11,019 thousand in the three months ended March 31, 2003 to $14,142 thousand in the three months ended March 31, 2004.