Amid Turbulence, Avfuel Continues to Expand
Amid the recent announcements of major fuel companies withdrawing from the general-aviation arena, independent fuel provider Avfuel continues to see growth and opportunity in the market. Over the past year, the Ann Arbor, Mich.-based company has added 57 new FBOs to its network, bringing its total to well over 600 locations nationwide.
As its name would suggest, Avfuel (Booth No. N5121) is an aviation fuel distributor and serves virtually all segments of the industry, including airlines and military and cargo operators, as well as FBOs and corporate flight departments. According to Joel Hirst, the company’s eastern vice president of sales, Avfuel currently supplies approximately 22 percent of the GA fuel supply in the U.S.“When we look at our branded dealer network, we’ve got pretty nice coverage [across] the country,” Hirst told AIN. “We can compete with anybody in any region in the [United] States.”
Recent strategy changes instituted by long-time industry stalwarts such as Chevron (which said last year that it would cease marketing aviation fuels in 27 states) and ExxonMobil (which announced its plans in July to dissolve its Avitat-branded FBO network and stop providing aviation fuel in the U.S.–a decision that affected approximately 150 locations) have no doubt helped and will continue to fuel Avfuel’s network recruitment efforts.
“Our biggest strength has been our stability and track record,” said Hirst looking back on the company’s nearly 40-year history. “We’ve seen [companies] come and go, while we have tried to, year-after-year, be a consistent fuel supplier and address the current needs of the FBOs.”
As for business this year, the company said its fuel sales, which have closely followed the stock market, were strong in the early part but leveled off over the summer. Avfuel of late has seen its largest share of fuel sales growth come through the addition of new customers.
Long-legged Models Impact Sales
The company has also noted some deep-rooted recent changes in the fuel supply industry, with regard to the economies of aircraft operation, changes that have caused the company to reexamine its fuel sales models.
“If you look back to the big fallout of ’08, the stock market going down like it did, it really pushed a lot of older heavy fuel-burning jets out of the marketplace,” said Mark Haynes, Avfuel’s western vice president of sales. “Those airplanes are gone, never to return again, for the most part.” The departure of those fuel guzzlers coupled with the arrival on the market of new aircraft incorporating the latest fuel-efficient technologies has altered fuel usage patterns.
“It certainly has led to extreme competition between FBOs in fighting for those gallons,” said Hirst. In this new paradigm, FBO operators are no longer challenged simply by the other providers on their field, but by those around the country, given the range and economy of the latest generation of aircraft, which can fly two or three more legs before needing fuel. As a result, flight departments now have many more options when it comes time for fueling.
Some long-range aircraft could alter that equation even more. “You take these operators that are operating [Gulfstream] 450s or 550s or [Bombardier] Globals, who have their own fuel farm at their home base, they are probably not buying fuel from anybody in the United States,” said Haynes. “That airplane can leave Dallas and go to Seattle and back and not need fuel. They take the approach that they will just pay the user fees.”
Faced with those variables, Avfuel has continually added programs to increase the number of “touchpoints” a flight department has with the company. Through its Avplan flight-planning division, the company can handle all details for a trip anywhere on Earth. It can arrange fueling at more than 2,000 locations worldwide through its contract fuels system, and its Avtrip pilot loyalty program helps steer traffic to its network of branded FBOs.
Partners with Eurojet
Avfuel last month announced the establishment of its first branded FBOs outside North America. The company has partnered with European FBO operator Eurojet to provide fuel, fuel purchase solutions, credit processing equipment, marketing support and its customer loyalty program at its location at George Best Belfast City Airport in Northern Ireland and at a new facility being built at Birmingham International Airport, scheduled to open in time for next year’s Summer Olympics in London.
European airports typically have only one fuel supplier, but as the management at Belfast City seeks to expand its general aviation share, they believe the introduction of Avfuel there could have benefits. “Introducing an alternative fuel supplier allows us to be more competitive, which will ultimately drive more business aviation traffic to the airport,” said Mark Beattie, the airport’s operations director. The airport, the second largest in Northern Ireland, serves approximately 2.7 million passengers a year.
While the announcements mark the first overseas branded locations for Avfuel, the fuel provider expects these will be the vanguard of its international expansion. As some global fuel providers scale back their general aviation commitments abroad, Avfuel believes it will see more opportunities to spread its network, and like most in the industry, it is looking toward Eastern Europe, Asia and Latin America. “There are 2,000 locations around the world where we can fuel aircraft and we are trying to cement those locations with more [FBO] brandings internationally,” said Hirst. “It’s not just about connecting domestic U.S. operators but connecting flight departments abroad, tying them into the Avfuel system so when they come to the [United] States, we keep them in our network.”