Aircraft Fuel Costs: Best Ways to Manage Them!

While fleet operators of business aircraft usually have specialist staff managing fuel purchases in advance for their aircraft at their destinations, or have their pilots purchase fuel with company-owned cards, individual owner/operators may find the task complex and daunting – unless they use either of two widely available, standard mechanisms.

Those mechanisms, which exist in the form of fuel cards or membership of one or more fuel-supply networks, are used just as widely by fleet operators as they are by individual owner/operators. But in each case the end result is similar: the price of the fuel uploaded at the FBO or fuel station is cheaper to the buyer than it would be without making use of the mechanism.

Having one or more fuel cards, or being a member of one or more fuel networks (or being able to use either option) makes the job of buying fuel easier, quicker and cheaper, as long as the operator buys the fuel from an FBO or fuel station which accepts any of the fuel cards proffered, or is aligned with any branded fuel network of which the buyer is a member.

According to Jon Boyle, Vice President Contract Fuel for Avfuel, fuel card plans and fuel networks are operated by companies active in either or both of two segments of the aviation fuel industry – fuel suppliers and fuel resellers. (Resellers are alternatively referred to as contract fuel suppliers.)

Fuel suppliers (unsurprisingly including oil and gas companies which refine aviation fuel, as well as non-refiners such as Avfuel) usually run networks of FBOs and aviation fuel stations branded for a given fuel supplier, and also offer and manage their own fuel card plans, which they market to operators.

The fuel suppliers sell fuel to resellers which are independent companies that offer their own fuel card plans, and in many cases also have their own branded networks of FBOs which sell fuel under the resellers’ brands.

For their network members or fuel card plan subscribers, most if not all fuel suppliers and fuel resellers also are able to process purchases of fuel bought from FBOs or fuel stations not belonging to the suppliers’ own branded networks.

Fuel Card or Fuel Network – or Both?

Fuel card subscriptions and fuel network memberships both offer operators pricing advantages in the form of discounts over FBOs’ and fuel stations’ posted retail fuel prices, according to José Cabrera, Regional Vice President of FBO Operations for Sheltair Aviation Services.

Sheltair Aviation is a Fort Lauderdale, Florida-headquartered operator of 16 FBOs located in Florida, Georgia and Texas which also has several other service locations. Sheltair Aviation’s FBOs are all Avfuel-branded for fuel sales, Avfuel providing those FBOs with their fuel.

Avfuel has long-term fuel-purchase contracts with more than 50 refiners at more than 30 fuel terminals worldwide and its Avfuel Pro Card gives cardholders discounts on retail fuel prices at more than 3,500 locations worldwide, including a branded network of more than 850 FBOs in the USA.

Fuel network memberships often also provide discounts on network-branded FBOs’ other services, such as handling and facility-use fees, according to Cabrera, whereas fuel cards rarely offer discounts on non-fuel FBO services. And there are other important differences between the two types of plans, he says.

“There’s a pretty big difference between them, because one [membership of a fuel network] offers you a discount, and even a third-party discount” on retail fuel prices at non-branded FBOs, he explains. “Some [fuel] networks have partnered with fuel suppliers to let you fly at discounted rates” by fueling at non-branded third-party FBOs.

“It gives you expanded options for fuel pricing”, and other options for ground handling and other services at FBOs.

However, fuel cards offer users different benefits, he adds. “Sometimes fuel cards also provide you with a credit line,” a very useful benefit for any operator if its pilots don’t have cash or a suitable credit card available to pay for aviation fuel purchases on the spot at an FBO.

Combining membership of a fuel network with subscription to a fuel card plan makes sure an operator can take advantage of all the benefits that both schemes offer, and possibly provide increased pricing and other benefits over and above the individual benefits each scheme offers.

Beyond even that, having multiple network memberships and fuel card subscriptions is beneficial for operators, in terms of combining the advantages individual schemes offer for discounts on retail fuel prices and FBO services and for ensuring that operators have access to such benefits at every destination to which they might fly.

“It’s safe to say you should have a fuel card with each major supplier,” Boyle advises. “In general, where you fly” is the most important determinant in such decisions, he adds. “Your fuel card should match the brand of fuel [sold] at the FBO where you are flying.”

However, when an operator is trying to use its fuel network and fuel card decisions to the best effect financially during flight operations, “a critical component is working with your specific fuel representative, or account manager for each fuel provider” with which the operator has a network membership or subscription relationship, he stresses.

“The more proactive you are” in letting the fuel rep or account manager know exactly where and when you are flying and – if intermediate stops are involved – the exact routing you plan to take, “the better your fuel provider will be in working with the FBOs you visit,” says Boyle.

Choosing a Fuel Card and/or Network

Operators should take into account several factors when deciding which fuel card subscription or fuel network membership to apply for, Boyle and Cabrera agree.

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