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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2019. Airport Management Guide for Providing Aircraft Fueling Services. Washington, DC: The National Academies Press. doi: 10.17226/25400.
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1 S.1 Introduction S.2 Project Objectives and Research Approach S.3 Findings from the Research S.4 How to Use the Management Guide S.5 Conclusions S.1 Introduction Small general aviation airports, like their larger counterparts, have experienced enor- mous changes in the last 15 years caused by a variety of unexpected events, notably the aftermath of the tragic events of September 11, 2001, high volatility in aviation fuel prices (both up and down), and a prolonged recession. These changes, first viewed as short-term perturbations in the general aviation (GA) industry, have settled into longer-term trends and now present opportunities for GA airports to evolve their business models and improve revenue generation. Several shifts in GA activity are particularly noteworthy. First, the active GA fleet in the United States is still dominated by single- or multi-engine piston aircraft but is consider- ably smaller than it was in 2000. Many of these aircraft were built between 1965 and 1980 and are edging toward retirement, flying fewer hours, or retiring out of the active fleet altogether. Since 2000, active piston aircraft have declined by 27,875 but still represent two-thirds of the active GA fleet in 2016. As single-engine piston aircraft decline, larger and more complex business jets and helicopters are increasing. These aircraft consumed an estimated 1.5 billion gallons of jet fuel in 2016. In contrast, Avgas sales totaled 187.8 million gallons or 11.5% of total GA aviation fuel sales.1 Newer, fuel-efficient aircraft, however, require less fuel. Fig- ure S-1 compares GA fuel consumption in 2005 with consumption in 2016. Total GA and Part 135 fuel consumption actually declined, and so has average gallons consumed per hour. Figure S-1 demonstrates that both jet fuel and Avgas demand by GA and Part 135 aircraft are shrinking because of declines in the piston fleet and better fuel efficiencies. Despite the large number of single-engine aircraft in the active fleet, the Avgas market is small relative to jet fuel and is distributed across approximately 3,675 fuel service operators in the United States.2 S U M M A R Y Airport Management Guide for Providing Aircraft Fueling Services 1 FAA. General Aviation and Part 135 Activity Survey, 2016. 2 AirNav Fuel Price Report, April 11, 2018.

2 Airport Management Guide for Providing Aircraft Fueling Services As an historical note, aviation fuel sales were the major revenue source for airport service providers; however, with declining demand and the availability of fuel price information on the Internet, aviation fuel has become a highly price-sensitive commodity. Many pilots or dispatchers plan fuel stops well before an aircraft departs. Fuel management software helps to optimize fuel efficiencies and to inform decisions about whether to carry extra fuel (tankering) or refuel en route. On the ground, private airport service providers have also experienced a period of consolidation and closures. In the 1980s, an estimated 10,000 fixed-base operator (FBO) locations served GA aircraft in the United States. In 2016, an estimated 3,675 fuel operators remained, and 1,630 fuel facilities were operated directly by airports. A large number of public use airports engage in fueling operations. At least in the foreseeable future, this trend of airports self-operating fueling facilities appears intact and possibly increasing as airport sponsors ensure that fuel is available to airport tenants and transient aircraft. S.2 Project Objectives and Research Approach This management guide is intended to help airports evaluate, take action, and implement strategies to improve existing fueling services; to take over these functions from a departing FBO; or to initiate fueling services for the first time. The target audience for the manage- ment guide is airports that are already in the fueling business or contemplating entry, and airport governing groups that will approve changes in the delivery of fueling services and investment in fueling equipment and facilities. Jet Fuel (thousand gallons) Average Rate of Jet Fuel Consumption (gallons per hour) (gallons per hour) Avgas (thousand gallons) Average Rate of Avgas Consumption 2005 1,507,443 176 294,870 15.7 2016 1,445,655 152 187,836 13.1 Change 2005–2016 -4% -13% -36% -17% Source: FAA. General Aviation and Part 135 Activity Survey, 2016. - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 2005 2016 GA a nd P ar t 1 35 F ue l C on su m ed (t ho us an d ga llo ns ) Jet Fuel Avgas Figure S-1. Estimated fuel consumption by GA and Part 135 Aircraft.

Summary 3 The original problem statement identified three key questions: 1. How can airports evaluate whether the provision of fueling services is feasible? 2. What actions must be taken to implement a fueling business? 3. Given the need for a fuel supplier contract, what is an effective procurement and solici- tation process? Because the audience is diverse, the challenge was to build a management guide that was well organized and relevant to readers with different experience in airport fueling services and different backgrounds at airports of varying sizes. To accomplish this, several principles guided the research: • Provide basic information about the aviation fuel industry, fueling systems, as well as planning, design, and operation of fueling facilities. • Concentrate on the business aspects of fuel services. Other ACRP documents have discussed the technical aspects of fueling operations. • Interview fuel customers (pilots and schedulers/dispatchers), fuel refiners and distribu- tors, FBOs, fuel management software companies, and industry organizations (Aircraft Owners and Pilots Association, Corporate Aircraft Association, National Air Transpor- tation Association, National Business Aviation Association) to capture current practices and document common issues that customers face. • Prepare extensive case studies of GA airports who self-fuel to identify recommended business practices and challenges with respect to fuel pricing, selection of aviation fuel products and delivery methods (e.g., self-service versus full-service, branded versus unbranded), and effective ways to retain and increase the number of fuel customers. • Organize the management guide topically so that it is possible to read chapters of par- ticular interest without necessarily reading the document cover-to-cover. • Provide worksheets in Microsoft Excel format available for download so that airports can customize them for their own use. S.3 Findings from the Research The management guide is solidly built on the research conducted including: • Review of professional journals, white papers, and presentations; • Interviews, teleconferences, and focus groups with pilots, schedulers, and dispatchers; refiners and airport fuel suppliers; as well as private FBOs and members of Aircraft Owners and Pilots Association, National Air Transportation Association, and National Business Aviation Association; and • 16 case studies of GA airports that self-operate fueling services. The research established an important context for the management guide. Some of the key findings that emerged from the research are highlighted below. The case studies are presented in Appendix A and an annotated bibliography is presented in Appendix D. S.3.1 Discussions with Pilots, Schedulers, and Dispatchers Private Pilots Operating Small Aircraft • Typically, fuel is purchased where an aircraft is based, especially if discounts are available for based aircraft. • Some pilots buy purchased fuel cards. These prepaid cards can offer discounts of as much as 15 cents per gallon. Not every airport has found this practice advantageous, as it requires the fuel facility to store pre-purchased fuel.

4 Airport Management Guide for Providing Aircraft Fueling Services • Prior to a trip or when in transit, pilots will check fuel prices at known airports and plan their itinerary. If prices are high, they will shop around, but prior personal experience is important in a stopover decision. When an airport is not known, pilots will check comments left by visitors on websites such as AirNav, AOPA GO, FlightAware, etc. In Alaska, the Supercub.com forum is popular. Loyalty programs do not necessarily figure into the decision-making for small transient GA pilots, unless credit cards that offer discount on purchases (1%–2% cash back) are used. Fuel brand is usually not a factor. Even with unbranded fuel, the quality of fuel is consistently good. Refineries sell the same fuel to branded and unbranded suppliers. • Factors that go into a stopover decision include: – Weather conditions, – Price of fuel, – Availability of food and restrooms, – Convenient access to self-service pumps (i.e., unattended access), – Condition of self-service pumps and payment systems, – Availability of fueling ladders, – General cleanliness of facilities, and – Courtesy cars are a plus. • Pilot lounges with weather stations, flight planning, and computers are no longer needed as this information is available on popular programs such as ForeFlight, Garmin Pilot Application, FlyQ EFB, and AOPA GO. • Sometimes if time is short, a pilot will choose full-service fuel to speed up fueling even if it is at a higher price. • Some pilots of light aircraft prefer to self-fuel rather than risk damage to their aircraft by attendants. • If an airport supports local flying clubs, it is considered a positive. • If an airport charges ramp fees, landing fees, or overnight fees, pilots that are making a stopover will choose alternate airports, if possible, or investigate whether these fees are waived with a gas purchase. • Advice to small airports contemplating fueling facilities: – Without fueling services, transient aircraft have few reasons to stop at an airport. – Installation of a self-service fueling station will attract pilots and increase activity at the airport. – Pilots also prefer airports where there are restrooms, Wi-Fi, and food available. Light aircraft maintenance is a plus. Corporate Pilots, Schedulers, and Dispatchers • Convenience to the passenger (including ground access) is the first consideration when selecting a particular destination airport. • Many corporate flight departments have their own fuel farm and will run tankering software to see if tankering is the most economical approach. • If tankering is feasible, they will plan to make a courtesy fuel purchase at the destination airport, but will try for roundtrip tankering and buy the minimum amount of fuel. Ramp fee waivers with fuel purchases may determine the amount of courtesy fuel bought. • If tankering is not an option, the flight department will consider the best discounts available either through contract fuel agreements or other discount programs. • Schedulers and dispatchers tend to route aircraft to airports where they already have FBO relationships. If there is no prior relationship, they may call ahead and negotiate a fuel price and fees. • Some FBO relationships are developed at conferences and through networking over time. Relationships with fuel representatives also matter.

Summary 5 • FBOs that approach corporate pilots at their airport may not be talking with the actual fuel purchase decision-makers and need to contact schedulers and dispatchers at the company. • Most corporate flight departments use professional flight management software and have contract fuel or negotiated prices at airports where they stop frequently. • For airports seeking to attract corporate aircraft: – Loyalty programs do not seem to matter; – The fuel brand does not factor into fueling decisions; – Well-developed websites with clear displays of email addresses and phone numbers is important; – Answering the phone carries significant weight, as does a courteous, helpful customer service representative on the phone at the FBO; and – Building relationships over a period of time with schedulers and dispatchers is an effective marketing strategy. S.3.2 Discussions with Private FBOs and Fuel Suppliers • Airports looking to get into the fueling business should take a detailed look at fuel volumes available from the previous operator if this data is available. Sometimes, commercial airline fuel is mixed into the records of the total fuel sales, which would inflate the total fuel sales. • It is important to consider indirect costs associated with a fueling operation such as the purchase or leasing of a fuel truck, maintenance of equipment, and liability insurance. After direct and indirect costs associated with fueling are added in, net fuel margins are often razor thin. • Many municipalities self-insure. A fueling accident could wipe out the finances of a small municipality if there are no limits to liability. • Where Jet A may be piped to a distribution terminal; Avgas is trucked from the refinery. As of 2017, there were eight locations in the United States that make Avgas. Transportation costs are much higher for Avgas than Jet A. • Unbranded fuel comes from the same refineries as branded fuel. At the rack (terminal), all fuel is loaded into trucks. Branded fuel is subject to certain quality control inspections and transported by branded trucks. Using unbranded fuel trucks, if they are clean, tend to deliver fuel to airports that is roughly equivalent to branded fuel. S.3.3 Highlights from the Case Studies Table S-1 shows the airports that participated in the case studies. The case studies explored many topics such as how the airport came to provide fueling services, how a fuel supplier was selected, how fuel prices are set, what advertising and marketing techniques are most effective, and what are some of the largest challenges for the fuel operation. Below is a consolidated list of findings organized by topic. Branded versus Unbranded Fuel • Avgas customers tend to be highly sensitive to price. • There are mixed views about whether a brand helps in fuel sales. • Most pilots view all fuel these days as high quality. • Unbranded fuel requires extra quality checks at the time of delivery. • Fuel trucks for unbranded fuel sometimes operate independently of a fuel supplier. It is very important to make sure that the truck tanks have been cleaned before fuel is delivered into airport storage tanks.

6 Airport Management Guide for Providing Aircraft Fueling Services Pricing • Avgas is largely a retail market; Jet A is a heavily discounted market and not particularly transparent. • It is important to be vigilant about monitoring fuel prices on a daily or weekly basis. • It pays to watch fuel prices and order deliveries, if possible, when wholesale prices are lower. Every small marginal advantage is helpful to stay competitive and maintain margins. • While the cost of wholesale fuel may have gone down, the same may not be true of the cost of providing the service. Airports that use a standard markup over the wholesale price of fuel that does not vary over time, will probably have their margins erode over time as labor, insurance, and fuel farm equipment costs continue to rise. • The actual cost of providing fuel service can get lost at airports striving to be the low-cost leader. Some of these costs include fuel trucks, labor, storage tanks, pumping equipment, credit card readers and transaction fees, self-service units, etc. These costs can add signifi- cantly to the cost of providing fuel. • Nearby airports are not the only fuel competitors. For transcontinental trips, airports competing for the same fuel customers could be far away. • Keeping fuel prices current on online fuel price platforms is critical. Many pilots purchasing Avgas plan their route and fueling stops based on Internet fuel prices. Partial versus Full Loads • Not all suppliers will offer partial deliveries. Usually the airport that makes the request for a partial load pays the full delivery cost of the load. If an airport arranges the second partial load sale, delivery costs can be negotiated and prorated. • It is advantageous to have 12,000-gallon storage tanks. Average maximum fill is 10,580 for a 12,000-gallon tank to allow for expansion and unusable fuel at the bottom of the tank. Airport State Notable Aspects of Fueling Operations Burlington Municipal Airport WI Low-price leader, self-service only Cheyenne Regional Airport WY Diversified fuel market, EAS point, National Guard, DEN reliever Eagle River Union Airport WI Seasonal market, competing with Chicago GA airports for fuel sales Front Range Airport CO Near DEN, high volume, many years of full airport FBO services Hulett Municipal Airport WY Very small airport in search of more fuel customers Huntington Tri-State Airport WV DOD fuel sales provide baseline fuel revenue Leadville Lake County Airport CO High-altitude testing center, low-price leader Meriden Markham Airport CT Single-engine/light twin specialist/low-price Avgas Mesquite Municipal Airport NV Contract manager for fueling operations Montgomery County Airpark MD Customer service leader in Washington Metro Area Pine Bluffs Municipal Airport WY Low-price leader for unbranded fuel Salida Airport CO Phillips 66 mountain network for partial loads San Bernardino Int’l Airport CA Strong brand identity, excellent customer service, transparent pricing Skylark Field TX Restricted airspace, larger buying power of two Killeen airports Southern Illinois Airport IL Strong local Avgas market because of flight school Thomas C. Russell Field AL Low-price leader, one-person airport operation, offering fueling and other FBO services Source: Prepared by KRAMER aerotek, 2018. Table S-1. Airports participating in the case studies.

Summary 7 The size of a full delivery truck is between 7,500 and 9,000 gallons. A full load of fuel has a lower delivered price point than a partial load. • There are mixed opinions about whether it is better to purchase partial loads frequently to average out price volatility or risk potential losses with large fuel inventories that last for several months if fuel prices fall below the cost of purchase. Quality Control • Fuel lasts in storage tanks approximately 6 months. • There are additives for Avgas that can extend its life. • Documenting quality control checks and updating fuel logs is a critical fuel operator task in case there are questions about quality control or possibly lawsuits. Fueling Business Strategies • Build customer relationships and deliver responsive customer service. • Attract sufficient demand for fuel. • Hire a fuel manager who is attentive to fuel prices and operations. • Offer transparent and consistent pricing (which also eliminates the need to keep track of individual pricing arrangements). • Stay compliant with Federal Grant Assurances, a number one priority. • Make a business plan and stick with it. • Grow incrementally. • Retain employees. If possible, pay living wages; opt for increases in wages in favor of one-time bonuses. • Customer confidence is inspired by a zero-accident record on the ramp. S.4 How to Use the Management Guide The management guide is divided into five sections and is designed for easy navigation by topic. Part 1—Overview (Chapters 1 to 3) Chapter 1 presents an overview of the aviation fuel business and recent trends toward greater participation by airports in providing fueling services. Chapter 2 is a primer for the production of aviation fuels and introduces basic terminology and a description of the refining process and options for transporting petroleum products. Chapter 3 describes the components of an airport fueling system. Part 2—Evaluating Fuel Services at the Airport (Chapters 4 to 6) Some airports are starting a fueling operation from scratch; others are inheriting a fueling operation perhaps unexpectedly from a failed operator. Still other airports want to expand or upgrade their fueling service. Chapter 4 provides worksheets to analyze existing or recent fueling services and to gather data about existing airport activity. This information will inform fuel demand forecasts. Chapter 5 makes an evaluation of an airport’s fuel customers and competitors, and Chapter 6 helps to clarify an airport’s identity to deliver a consistent message and product, and to build customer loyalty. Part 3—Fuel System Improvements and Feasibility (Chapters 7 to 8) Chapter 7 describes steps to prepare fuel demand forecasts, evaluate potential fuel facility improvements, estimate the costs associated with improvements, and identify potential

8 Airport Management Guide for Providing Aircraft Fueling Services funding sources. Chapter 8 presents the components of a feasibility study and a simplified model to evaluate whether investment in fuel facilities makes financial sense. Part 4—Implementation Plan (Chapters 9 to 12) Part 4 is the nuts-and-bolts section of the management guide. This section has four chapters devoted to the design and construction of a fuel facility (Chapter 9); making a plan to operate the facility (Chapter 10); procedures to operate a fuel facility (Chapter 11); and best practices when managing fuel inventories, ordering fuel, and setting prices (Chapter 12). Part 5—Implementation Tools (Chapters 13 to 15) This last section of the management guide wraps up with a set of tools to measure progress, to develop a fuel manager report, and to make a presentation to the airport sponsor about the airport’s fueling operations (Chapter 13). Chapter 14 provides a discussion of the key elements that need to go into a solicitation for a fuel supplier and Chapter 15 includes a set of action checklists. S.5 Conclusions Shifts in the GA industry have resulted in a concentration of private providers of airport services at the largest GA airports. Many smaller GA airports have elected, by choice or circumstance, to self-operate fueling facilities. This report provides guidance on the key aspects of managing a fueling business that reflects a scale of operation appropriate to the airport’s market. Each chapter tackles a different topic that facilitates examination of the air- port’s identity, current demand for fuel, and actions needed to set prices, manage inventories, and negotiate with fuel suppliers. There are worksheets, checklists, and reports, all directed at organizing and managing the fuel business. The case studies in Appendix A report on 16 airports with experience operating their fueling facilities. The case studies run the gamut of airports with low-price leadership; seasonal markets; customers affiliated with the military, helicopter testing, and flying clubs; and airports that seek to attract corporate traffic. If the trends continue, more airports will join the ranks of self-operated fuel facilities. This management guide will serve as a valuable resource to airport sponsors and staff.

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TRB’s Airport Cooperative Research Program has released ACRP Research Report 192: Airport Management Guide for Providing Aircraft Fueling Services designed to assist airports that are considering or are currently self-providing fueling services directly to their customers.

The management guide includes a methodology to help evaluate whether an airport should or should not provide fuel service, a checklist of action items required for providing fuel service, and a sample request for proposal to solicit bids from fuel suppliers.

The management guide also addresses a wide range of topics including feasibility evaluations for new or improved fueling facilities, fuel pricing and marketing strategies, and organizational considerations when starting or expanding a fueling service. In addition, there are introductions to how aviation fuels are produced and to the components of an airport fueling system, which can be used to brief municipal decision-makers or airport employees.

The management guide offers useful information about branded and unbranded fuel products, setting price, inventory controls, customer service, staffing levels, regulatory requirements, capital investment, and operating and maintenance costs associated with the fueling services.

There are three online appendices related to the guide.

Appendix A contains case studies of the fueling operations of 16 airports;

Appendix B contains Microsoft Excel worksheets (that can be downloaded and customized by airports to keep track of inventories, sales, operating expenses, and profit and loss) and a Microsoft PowerPoint presentation (to help airports produce their own PowerPoint presentations for their sponsors); and

Appendix C contains a detailed bibliography.

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