Airport Management Guide for Providing Aircraft Fueling Services (2019) / Chapter Skim
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Pages 113-186
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From page 113... ...
Implementation Plan P A R T 4 115 Chapter 9 System Design 115 9.1 System Design and Project Construction Process 115 9.2 Project Feasibility and Delivery Method 117 9.3 Preliminary Design and Selection of Alternative 121 9.4 Emergency Systems and Environmental Compliance 126 9.5 Final Design 126 9.6 Construction Documents and Permits 129 9.7 Bid Package 130 9.8 Construction Responsibilities 133 9.9 References 135 Chapter 10 Operating Decisions 135 10.1 Selecting an Operating Model 138 10.2 Fuel Pricing Strategy 138 10.3 Decision on a Fuel Supplier 139 10.4 Branded Versus Unbranded Fuel 142 10.5 Staffing Requirements and Training 148 10.6 Budget 150 10.7 Cash Flow Considerations 150 10.8 Risk Management 154 10.9 References 155 Chapter 11 Operating the Fuel Facility 155 11.1 Monitoring Fuel in Storage Tanks 164 11.2 Safety and Emergency Operations 165 11.3 Environmental Operations 167 11.4 Quality Control and Inspections 169 11.5 Operating Permits and Certifications 169 11.6 Facility Maintenance and Repairs 170 11.7 References
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From page 114... ...
171 Chapter 12 Managing Inventory, Ordering Fuel, and Setting Prices 171 12.1 Managing Inventory 173 12.2 Ordering Fuel 175 12.3 Pricing Retail Fuel 181 12.4 Self-Service, Discounts, and Contract Rates 183 12.5 Monitoring Competition and Adjusting Prices 183 12.6 Keeping Posted Fuel Prices Current 184 12.7 Reviewing Performance Part 4 of the management guide discusses the implementation phase of developing or improving fuel facilities, which includes the system design process; decisions about operating a fuel facilities; and steps to manage fuel inventories, order fuel, and set prices.
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From page 115... ...
115 9.1 System Design and Project Construction Process 9.2 Project Feasibility and Delivery Method 9.3 Preliminary Design and Selection of Alternative 9.4 Emergency Systems and Environmental Compliance 9.5 Final Design 9.6 Construction Documents and Permits 9.7 Bid Package 9.8 Construction Responsibilities 9.9 References Chapter 9 moves into Part 4 of the management guide, the implementation plan. A new fuel facility or plan for upgrading or expanding comes to fruition through careful design, a business plan, an operating plan, and a strategy for fuel inventory management and price setting.
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From page 116... ...
116 Airport Management Guide for Providing Aircraft Fueling Services • A description of the proposed project, including the scope of new fueling facilities and products to be offered; • An evaluation of market feasibility in terms of current demand for Avgas and jet fuel, identification of existing and prospective customers, analysis of the competition, and forecast of future demand; • A planning level discussion of the types of fuel facilities, equipment, and technology that would be used for this project and its interface with any existing fueling operations at the airport; and • Estimates of funding that would be required to acquire, design, and build the project. Source: Prepared by Kimley-Horn and Associates, 2018.
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From page 117... ...
System Design 117 At this point in the project, feasibility has been determined and funding secured. The next important decision involves how the project will be delivered in terms of design and construction.
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From page 118... ...
118 Airport Management Guide for Providing Aircraft Fueling Services system to the remote dispensing. Larger multitank, interconnected fuel systems with local or remote dispensing require more extensive engineering design.
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From page 119... ...
System Design 119 • Security; • Ease of product delivery, transfer, and maintenance; and • Insurance. Airport Master Planning Relying on the most current airport master plan document can help guide the site selection for a fuel facility.
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From page 120... ...
120 Airport Management Guide for Providing Aircraft Fueling Services fence. Underground or surface pipelines route the fuel to the fuel storage system located within the secured confines of the airport property.
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From page 121... ...
System Design 121 A large part of an initial engineer's basis of design report is summarizing the initial investigations, which could include: • Geotechnical investigation, • Environmental assessment, • Review of record information, and • Review of existing conditions for rehabilitation needs or violations of FAA standards. As discussed in Section 9.3.1, a geotechnical investigation and an environmental assessment provide a more complete understanding of existing conditions.
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From page 122... ...
122 Airport Management Guide for Providing Aircraft Fueling Services EFS stations are usually located at the loading stations and near the fuel facility. Normally, these are separate stations but may be combined in some cases.
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System Design 123 1. Categorical Exclusion (CATEX)
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From page 124... ...
124 Airport Management Guide for Providing Aircraft Fueling Services starter controls on the fuel pumps. Out-of-service and loading/unloading connections on oil pipelines must be secured.
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From page 125... ...
System Design 125 Corrosion Protection Corrosion protection is an important consideration when designing buried metal tanks, piping, and other components of fuel storage systems. If these are not properly designed, they are susceptible to corrosion, such as pitting or delamination that could cause leaks.
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From page 126... ...
126 Airport Management Guide for Providing Aircraft Fueling Services Leak Detection Depending on local requirements, it might be required that new installation of tanks and piping be double-walled with continuous monitoring of interstitial space. These systems may include hydrocarbon liquid sensors installed to detect leaks from any portion of the inner tank and piping system -- typically the lowest portion of the interstitial space contains product if a leak occurs.
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From page 127... ...
System Design 127 earthwork, flexible base courses, rigid base courses, flexible surface courses, rigid pavement, fencing, drainage, turfing, and lighting installation. Additionally, if the project funding is not federal or AIP, then current state or local government technical specifications may be used instead or in addition to FAA specifications.
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From page 128... ...
128 Airport Management Guide for Providing Aircraft Fueling Services Airport Layout Plan Any airfield construction requires an update to the ALP if the facility design is performed outside of the master plan process. A current ALP that depicts the proposed project, which has FAA approval from the standpoint of safety, utility, and efficiency of the airport, shall be required before a development project is approved.
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From page 129... ...
System Design 129 9.7 Bid Package The fuel system design is typically compiled into a bid package for competitive bidding by multiple companies. Variations in project delivery methods mentioned will affect bid document packaging and the sequence of design execution.
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From page 130... ...
130 Airport Management Guide for Providing Aircraft Fueling Services • Base Course • Asphalt Paving • Concrete Paving • Concrete Joints and Joint Seals • Structural Concrete • Pavement Markings • Drainage and Underdrain • Topsoil and Seeding • Supporting Utilities • Fuel System Components including Tank, Pumps, Meters, and Piping • Electrical Power, Controls and Communication • Fire Protection Construction Drawings • Civil Site Plans – Horizontal and Vertical Control – Construction Phasing and Safety – Existing Conditions and Demolition – Stormwater Management Plan – New Site Geometric Layout – Grading and Drainage – Pavement Elevation – Pavement Joint Layout – Pavement Marking Layout – Miscellaneous Details – Landscaping – Site Utilities and Electrical • Utility/Piping Profiles • Structural Plans and Details • Fuel System Flow Diagrams • Mechanical Fuel System Plans and Details • Fire Protection Plans and Details • Electrical Power Distribution One-Line Diagram • Electrical Hazard Area Classification Plan and Details • Electrical Plans and Details • Electrical Wiring Diagrams and Control Schematics It is important that prospective bidders are qualified to perform the specialized work associated with an airport fuel system. General contractors -- building, mechanical, and plumbing contractors -- are not typically experienced in aviation fuel systems.
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From page 131... ...
System Design 131 project representative. For DBB, the owner will almost always require representation.
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From page 132... ...
132 Airport Management Guide for Providing Aircraft Fueling Services A preliminary construction schedule can be estimated by the designer, but needs to be finalized by the installing contractor. It is typically a living document that is updated continuously as the construction proceeds.
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From page 133... ...
System Design 133 AIP-funded project. Follow-up inspections are performed to ensure all punch list items are completed.
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From page 134... ...
134 Airport Management Guide for Providing Aircraft Fueling Services EPA. Resources for UST Owners and Operators.
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From page 135... ...
135 10.1 Selecting an Operating Model 10.2 Fuel Pricing Strategy 10.3 Decision on a Fuel Supplier 10.4 Branded Versus Unbranded Fuel 10.5 Staffing Requirements and Training 10.6 Budget 10.7 Cash Flow Considerations 10.8 Risk Management 10.9 References Chapter 10 walks through important business decisions an airport sponsor will make to establish the airport's fueling operations including decisions about offering branded or unbranded fuel, the appropriate level of staffing and training required, setting up a fuel budget, and the basic steps needed to manage the risks of a fueling operation. Table 10-7 can be downloaded as an Excel worksheet from Appendix B on the TRB website and customized for specific airports.
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From page 136... ...
136 Airport Management Guide for Providing Aircraft Fueling Services • Does the airport have staff on location already? If so, can existing airport staff handle the anticipated demand for aircraft fueling?
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From page 137... ...
Operating Decisions 137 capital investment, all startup costs, as well as ongoing operations and maintenance expenses. In a nutshell, the airport sponsor shoulders all of the risk and retains all of the rewards.
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From page 138... ...
138 Airport Management Guide for Providing Aircraft Fueling Services The contract manager has no capital invested in airport facilities or equipment. The airport sponsor takes financial responsibility for the fueling operation and maintains control over the level of service and the price of fuel.
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From page 139... ...
Operating Decisions 139 All aviation fuel products, whether branded or unbranded, come from the same refineries. At the refinery terminal (also known as the rack)
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From page 140... ...
140 Airport Management Guide for Providing Aircraft Fueling Services 10.4.1 Branded Fuel When a fuel supplier distributes branded products, transportation and quality control are incorporated into the service. In addition, branding fuel suppliers also offer different optional services, the most common of which are shown in Table 10-2.
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From page 141... ...
Operating Decisions 141 not carry a credit card fee to the airport operator. Customers with contract rates negotiated with a branded fuel supplier may also frequent an airport authorized to sell the supplier's contract fuel.
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From page 142... ...
142 Airport Management Guide for Providing Aircraft Fueling Services supplier. Airports that seek low-price leadership tend to prefer unbranded products and are often located at smaller airports, where the majority of customers purchase low volumes of Avgas and tend to be price sensitive.
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From page 143... ...
Operating Decisions 143 how to best serve after-hour customers either with an extra on-call staff shift or a self-service fueling unit. The responsibilities of the fueling staff are comprehensive.
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From page 144... ...
144 Airport Management Guide for Providing Aircraft Fueling Services 2016 Fuel Sales Avgas Jet A Airport Avgas Jet A SelfService FullService SelfService FullService FTE Staff Hulett Municipal Airport 1,451 3,270 1 PT Huntington Tri-State Airport 5,385 171,006 8 Salida Airport 9,005 20,796 1 Pine Bluffs Municipal Airport 15,000 none 0 Leadville Lake County Airport 15,093 73,874 3 Mesquite Municipal Airport (estimated) 32,000 48,000 2 Eagle River Union Airport 36,236 69,670 3 Thomas C
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From page 145... ...
Operating Decisions 145 Self-Service Staffing Requirements Airports only providing self-service fueling require fewer employees. Three of the four case study airports offering only self-service dedicate less than one full-time equivalent staff member to facility operation.
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From page 146... ...
146 Airport Management Guide for Providing Aircraft Fueling Services 10.5.2 Training Requirements for Employees Since aviation fuel is a hazardous material, training line service personnel is critical to the safety of fueling operations and may be required by state or local fire codes, fuel distributors, and insurance. A number of onsite, in-class, and online courses are available through universities and colleges, the National Air Transportation Association (NATA)
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From page 147... ...
Operating Decisions 147 • Fire Safety in Mobile Fueling Units, Fueling Pits, and Fueling Cabinets • Fire Code of the Public Body having Jurisdiction Over the Airport The advisory circular provides a more detailed breakdown of each of the training topics and recommends the training courses cover orientation on fuel types, fueling different types of aircraft, and basic safety practices. Supervisor Fuel Safety Training [Part 139.321(e)
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From page 148... ...
148 Airport Management Guide for Providing Aircraft Fueling Services service, flight coordinator training, and OSHA regulations. This program's online training modules for line service personnel and supervisors are commonly used throughout the aviation fueling industry.
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From page 149... ...
Operating Decisions 149 Table 10-7. (Continued)
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From page 150... ...
150 Airport Management Guide for Providing Aircraft Fueling Services year's budget and comparing it with actual revenues and expenditures. A final budget presented to the airport sponsor would summarize the budget categories and present just the principal categories in bold.
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From page 151... ...
Operating Decisions 151 also business risks associated with volatile fuel prices, competition, economic downturns, and unexpected interruptions of supply because of natural disasters such as storms and fire. One of the main purposes of this management guide is to put in place planning and operating practices that, to the extent possible, minimize risks to the business.
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From page 152... ...
152 Airport Management Guide for Providing Aircraft Fueling Services • Training the staff to represent the airport brand (Chapter 6) ; • Knowing what competing airports offer (Chapter 5)
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From page 153... ...
Operating Decisions 153 facilities to additionally prepare a facility response plan. The SPCC plan outlines the general facility description, fuel transfer methods, waste disposal, general discharge protection methods, and responses the airport will take for minor or major incidents.
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From page 154... ...
154 Airport Management Guide for Providing Aircraft Fueling Services 10.9 References 14 CFR Part 139 -- Certification of Airports. Available: https://www.law.cornell.edu/cfr/text/14/part-139#.
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From page 155... ...
155 11.1 Monitoring Fuel in Storage Tanks 11.2 Safety and Emergency Operations 11.3 Environmental Operations 11.4 Quality Control and Inspections 11.5 Operating Permits and Certifications 11.6 Facility Maintenance and Repairs 11.7 References Chapter 11 presents key elements of day-to-day, weekly, and monthly operational aspects of an airport fuel system. The parameters integral to fuel system operations encompass the management of fuel tanks, safety protocols, quality control and inspections of the fuel, on-going operating permits and certifications, as well as regular maintenance.
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From page 156... ...
156 Airport Management Guide for Providing Aircraft Fueling Services gauging introduces a margin for human error, as a misreading of the fuel level by even 1⁄8 inch could translate to an errant measurement of 50 to 60 gallons in a 12,000-gallon tank. Line service staff should measure precisely in their readings when manually measuring tank volume.
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From page 157... ...
Fuel Type: Date Range: Service (FS or SS) : Year: Date Gallons Sold Price per Gallon Total Sale Payment Method Customer Number Contract Fuel Rewards Number Initials Account Credit Cash Other Table 11-1.
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From page 158... ...
Fuel Type: Date Range: Service (FS or SS) : Year: Date Gallons Sold Price per Gallon Total Sale Payment Method Customer Number Contract Fuel Rewards Number Initials Account Credit Cash Other Weekly Totals: Source: Prepared by KRAMER aerotek, 2018.
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From page 159... ...
Tank ID: Month: Fuel Type: Year: Date Initial Gauge Depth Initial Volume (I) Transfer In (R)
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From page 160... ...
Tank ID: Month: Fuel Type: Year: Date Initial Gauge Depth Initial Volume (I) Transfer In (R)
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From page 161... ...
Operating the Fuel Facility 161 Monthly Inventory Tracking (100LL or Jet A) Month: October Year: 2017 Beginning of Month Inventory Gallons Date Recorded Initials Storage Tank 1 (12,000 Gal)
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From page 162... ...
Aircraft Service Order Ticket No: Date: Type of Aircraft: Additional Notes Registration Number: Owner/Pilot Name: Account Number (if applicable) : Permanent Address: Location of Stay (if applicable)
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From page 163... ...
SERVICE TO BE COMPLETE BY DATE: TIME: LINE TECHNICIAN: COSTS PAYMENT TYPE FUEL: CREDIT/DEBIT OIL: FUEL POINTS CASH SERVICES: ACCOUNT AMEX TAX: DISCOUNT CONTRACT TOTAL DUE: MULTI-SERVICE SERVICE ORDER APPROVAL (PILOT'S SIGNATURE) : Source: Prepared by KRAMER aerotek, 2018.
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From page 164... ...
164 Airport Management Guide for Providing Aircraft Fueling Services 11.2 Safety and Emergency Operations Fuel system operating protocol should include measures that minimize the possibility of a safety or environmental emergency. It is best practice for all airports, whether certified 14 CFR Part 139 or not, to follow the preventative measures discussed in this section and the two that follow.
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From page 165... ...
Operating the Fuel Facility 165 An emergency call list should be prepared as part of the AEP, updated at least annually, and used to notify responsible parties in case of an emergency. Appendix 3 of FAA AC 150/5200-3C, "Airport Emergency Plan Accident/Exercise Evaluation Checklist," needs to be completed following a drill or accident.
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From page 166... ...
166 Airport Management Guide for Providing Aircraft Fueling Services The SPCC plan, as discussed in detail in Chapter 9 and required by 40 CFR Part 110 and Part 112, should also be referenced for prevention methods specific for the facility. 11.3.3 Spill Kits Spill kits are generally provided for fuel system operations.
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From page 167... ...
Operating the Fuel Facility 167 Typically, these involve stopping the release, containing the spill, absorbing the substance, and properly handling the potentially impacted soil and debris byproducts. Depending on the spilled substance, this may have to be disposed of as hazardous waste.
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From page 168... ...
168 Airport Management Guide for Providing Aircraft Fueling Services inspections should be recorded, and records shall be kept for 12 months. Quarterly inspections are typically performed by city or county fire marshals, airport fire department personnel, airport operations personnel, or others with knowledge of fueling system operation.
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From page 169... ...
Operating the Fuel Facility 169 • Appendix 5: Quarterly Inspections. These inspection procedures are based on NFPA 407 and should comply with the fire safety standards listed in the airport certification manual.
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From page 170... ...
170 Airport Management Guide for Providing Aircraft Fueling Services There are a number of specialized companies in different regions of the United States that provide third-party maintenance and repairs for fuel system components, as well as supply replacement parts and equipment for fuel systems. Some of these companies provide comprehensive fuel system maintenance, while others may provide specialized services for limited components.
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From page 171... ...
171 12.1 Managing Inventory 12.2 Ordering Fuel 12.3 Pricing Retail Fuel 12.4 Self-Service, Discounts, and Contract Rates 12.5 Monitoring Competition and Adjusting Prices 12.6 Keeping Posted Fuel Prices Current 12.7 Reviewing Performance This chapter discusses how to manage fuel inventories, time and place fuel orders, and set prices. Each of these tasks involve some computations and analysis, which are presented as examples.
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From page 172... ...
172 Airport Management Guide for Providing Aircraft Fueling Services Multiple years of weekly data would be even more informative. Also, while Avgas purchases can be relatively small, jet fuel purchases can be large and, consequently, turnover of inventory is faster.
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From page 173... ...
Managing Inventory, Ordering Fuel, and Setting Prices 173 Using a similar methodology for a 12,000-gallon storage tank, the tank has an estimated usable capacity of 9,600 gallons of fuel. This assumes a 1,500-gallon (12.5%)
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From page 174... ...
174 Airport Management Guide for Providing Aircraft Fueling Services It is useful to put the inventory management or ordering process together. Table 12-3 describes assumptions for a basic example of Avgas inventory management, assuming steady demand for Avgas throughout the year.
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From page 175... ...
Managing Inventory, Ordering Fuel, and Setting Prices 175 In this example, the airport's fuel supplier generally delivers Avgas within 3 business days after the order is placed. The operator would need to order fuel with the understanding that the fuel will not arrive for 3 business days when there is at least 330 gallons usable Avgas remaining.
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From page 176... ...
176 Airport Management Guide for Providing Aircraft Fueling Services 12.3.1 Fuel Pricing Strategy The starting point in Figure 12-3 is the airport's pricing strategy, which is introduced and discussed in Chapter 10.2. A fuel price strategy includes consideration of existing jet and Avgas fuel customers, degree of customer price sensitivity, presence of a low-price fuel operator in the area, and consideration of how the pricing strategy fits with the airport brand.
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From page 177... ...
Managing Inventory, Ordering Fuel, and Setting Prices 177 receive a profit on each gallon of fuel sold. This section provides a methodology to estimate operating costs associated with an airport fueling business and builds a basis for a retail price structure.
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From page 178... ...
178 Airport Management Guide for Providing Aircraft Fueling Services Operating Expenses In addition to the direct cost of delivered fuel, an airport operator must consider the expenses associated with operating a fuel facility. Operating expenses include all the costs associated with airport operation divided by the total gallons of fuel sold.
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From page 179... ...
Managing Inventory, Ordering Fuel, and Setting Prices 179 Retail Fuel Price Build (per gallon) Cost of Product Jet A Avgas Delivered Cost of Fuel $1.77 $2.83 Taxes Federal Excise $0.2440 $0.1990 LUST $0.0010 $0.0010 Oil Spill $0.0019 $0.0019 State Excise $0.0600 $0.0600 Local $0.0500 $0.0500 Tank Fee/Tax (Environmental)
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From page 180... ...
180 Airport Management Guide for Providing Aircraft Fueling Services These categories of operating expenses were described in detail in Chapter 8, but should be customized according to the way the airport reports its expenses (see Chapter 8.3, Table 8-2)
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From page 181... ...
Managing Inventory, Ordering Fuel, and Setting Prices 181 12.4 Self-Service, Discounts, and Contract Rates 12.4.1 Self-Service After setting the retail price, a fuel operator would establish a price for self-service. Most airports apply a straight discount off the retail price for self-service.
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From page 182... ...
182 Airport Management Guide for Providing Aircraft Fueling Services interest to keep these fees as low as possible. Sometimes the fuel supplier will suggest a fee; but in general, the airport fuel provider sets the upload fee, which may be changed annually, every 6 months, or quarterly.
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From page 183... ...
Managing Inventory, Ordering Fuel, and Setting Prices 183 12.5 Monitoring Competition and Adjusting Prices So far, the pricing strategy has looked internally at the delivered cost of fuel, operating expenses, and revenue streams at the airport. However, unless the airport has a captive market, what other competing airports charge for fuel is important to consider.
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From page 184... ...
184 Airport Management Guide for Providing Aircraft Fueling Services 12.7 Reviewing Performance The last important practice is tracking performance of the airport fueling business. On a monthly basis, it is useful to evaluate how each of the aviation product sales are performing.
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From page 185... ...
Fuel Type _____________ Year _________________ Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year-toDate Previous Year-toDate Gallons sold a Fuel sales revenue b Delivered cost of fuel c Gross margin d=b-d Number of sales transactions e Average gallons per transaction f=a/e Average sale per transaction g=b/e Average price per gallon sold h=b/a * Available as an Excel worksheet in Appendix B
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