Interest in contract fuel rises with jet-A prices

 - September 20, 2006, 4:14 AM

With jet-A prices already soaring and likely to climb during the summer, business jet operators continue to seek ways to save money on fuel. Contract fuel companies, which either sell their own fuel or arrange for discounts from airports and FBOs, report an increase in calls from operators. “It’s tough lately,” said Alyse Daniel, membership coordinator for fuel discounter Jet Fleet International. “We’ve been quite busy lately with applicants.”

“There is a lot of price shopping going on,” agreed Rick Wall, manager at contract fuel company Best AeroNet, which offers discounted fuel at 350 airports.

Pilots and dispatchers might be confused by the number of organizations offering to provide discount fuel; AIN has listed eight such programs in the accompanying chart. Most of the programs are run by companies that bill the operator for the fuel then pay FBOs and fuelers. Some of the contract fuel companies own inventories of jet-A, paying fees to store fuel at airports and FBOs and selling the fuel directly to operators.

The Corporate Aviation Association (CAA) is unique in that it is a nonprofit association of corporate operators. It doesn’t bill for fuel or earn any revenue when operators buy fuel. Operators pay the FBO after showing that they are CAA members. CAA doesn’t allow holders of Part 135 certificates to join the association and it is the only program with annual dues. Prospective members can try CAA for six months, dues free, during which period CAA claims that participants will see that fuel savings more than cover the dues.

“Right now, [price] is as big a factor as it’s ever been,” said Mark Haynes, Avfuel vice president of sales, west. Avfuel offers a commercial contract-fuel discount program available to any operator, including companies that use large volumes of avgas such as freight haulers and firefighters. “There’s a lot of activity right now,” he said.
Most Avfuel dealers participate in the company’s Avtrip promotional program, but it’s optional for the FBO. “It depends on the fuel discount,” he said.

Reining in Fuel Costs
While the sale of fuel softened slightly in April, Haynes said, jet-A continues to be in high demand and is selling at volumes greater than he expected given that oil is selling for more than $70 a barrel. “It’s been amazing,” he said.

At contract fueler Western Petroleum, Vickie Elgin, manager of aviation contract services, said that more people are calling for fuel discount information. As an example of the savings available, Elgin sampled six airports where Western Petroleum has contracts or its own fuel. “At some airports, we saved customers more than one dollar a gallon from retail,” she said. “They are happy with that.”

Owners of business jets, said Malcolm Hawkins, president of contract fuel company Colt International, “are demanding [that flight departments] save as much money as possible. Our phone volume has gone up a fair amount.” At some locations that serve Colt members, savings can range from five or 10 cents to more than a dollar a gallon, Hawkins said. He offered a caveat, noting that fuel is just one part of a trip’s cost. “It’s amazing that people will scream and yell for four cents a gallon but overpay on a trip by $10,000,” he said. Colt International also owns flight handler Baseops International.

Universal Weather and Aviation’s fuel division, UVAir, offers a fuel quoting service through which clients receive e-mail quotes of fuel prices for frequently visited locations, according to Kelly Hughes, general manager for UVAir sales and marketing. Clients can send trip schedules or inform UVAir that they are going to a particular airport often and receive quotes for those trips automatically.

World Fuel Services delivers about 2.2 billion gallons of jet fuel every year, primarily to commercial aviation clients. With large inventories of fuel throughout the U.S., said president Mike Clementi, World Fuel is targeting business jet fleet operators and doesn’t solicit business from small one- or two-airplane flight departments.

Clementi sees the general aviation jet fuel market moving away from the traditional retail model. “As the [fleets] get bigger and the market changes, you see that there is an overall deterioration of full retail,” he explained. “Everybody is looking to buy discounted fuel.”

Self-serve Jet Fuel a Rare Commodity But, For Some, Worth The Search
Psssstt! Want to save tons of money on jet fuel? At a tiny number of airports in the U.S., pilots can pump their own jet fuel and save hundreds, perhaps thousands, of dollars on a single fill-up.

Self-serve fuel is not a new concept. Ac-U-Kwik’s North American FBO guide currently shows 257 airports with self-serve fuel, but those offer primarily avgas. Self-serve jet fuel hasn’t taken off at many FBOs, but pilots who fly to Palm Springs, Calif.; Norfolk, Va.; and a few other locales and are willing to risk getting their hands dirty can save a lot on jet fuel.

At Jacqueline Cochran Regional Airport in Palm Springs, Thermal Self-Serve sells jet-A for 25 cents above cost, including Prist. On April 26, that price was $3.25 a gallon. The price at Signature Flight Support, which recently acquired the only other FBO on the airport, a former Million Air facility, was $5.50 a gallon for jet-A on April 15, according to Airnav.

Thermal Self-Serve’s equipment permits into-wing or single-point fueling, and business jet pilots are using the self-serve to fuel their jets, according to Dan Obradovich, general manager and part owner of the FBO. Obradovich said he buys jet-A from an independent fuel seller, Fuel Controls of Long Beach, Calif., which gets the fuel from ConocoPhillips and BP. “There’s traceability that way,” he explained.

Thermal Self-Serve’s ramp isn’t rated for jets heavier than a Gulfstream II. Recent self-serve jet-A customers include a regular Sabreliner pilot and a GII pilot who saved
about $4,000 on one fill-up. Other self-serve customers fly Conquests, King Airs, Learjets and Citations, and Thermal Self Serve averages about 30 self-serve jet-A users per week. “We’re $2.50 cheaper than Signature,” Obradovich said. “It’s amazing; people pump when it’s that price.”

Thermal Self-Serve has been open for a little more than a year and pumps 3,000 to 4,000 gallons of jet-A a week. The FBO also offers amenities such as rental cars, a pilot lounge, Internet access and, of course, bathroom facilities.

On the East Coast, at Hampton Roads Executive Airport, sole FBO Virginia Aviation Associates offers full-serve Shell jet-A for $3.29 per gallon or $2.99 for self-serve (May 1 prices). Helicopter operators are the main users of the self-serve jet-A, according to general manager Ron Van Sickle. “Corporate pilots don’t want to do it themselves,” he said.

FBO Central Virginia Aviation provides self-serve Shell jet-A at Dinwiddie Country Airport in Petersburg, Va., where Runway 5/23 is 5,000 feet long. Self-serve jet-A sold for $3.50 per gallon on April 21, 26 cents less than the full-serve price.
Avfuel dealer Diamond Air Jet Center in Yuma, Ariz., also offers self-serve jet fuel, but the price saving in mid-April was only 10 cents a gallon. The jet-A self-service is not used very often, a company spokesman said.

In Ontario, Ore., FBO Ontario Aviation sells BP self-serve jet-A, primarily to a local helicopter flight school. The cost saving at Ontario Aviation for self-serve is 20 cents a gallon. On April 26, Ontario’s full-serve price was $4 per gallon and self-serve $3.80. “We mostly deal in avgas,” a spokeswoman told AIN. Although the airport has a 4,300-foot runway, she added, “there’s not a lot of jet traffic.”

What about the safety implications of pilots pumping hundreds and perhaps thousands of gallons of jet-A? Thermal Self-Serve’s Obradovich said that safety practices are “the same as for avgas: don’t spill it.” To help customers become comfortable with self-serve, he added, “I usually train them the first time and after that they’re set.”