Strategies favor planning, programs & detours.
A recent session of hangar flying with a collection of corporate pilots devolved from whimsical wondering about the strangest things passengers wanted to bring onto the airplane to sharing tips on the best FBOs for courtesy cars, hotel deals, restaurant access, pilot services, and one sure to warm the hearts of CFOs and flight-department managers everywhere… the best Fuel deals.
Defining the “best” fuel deals involved significant ancillary issues beyond pure price-per-gallon/liter considerations, to encompass the varying tangibles such as frequent-buyer points and rewards, crew freebies and sundry perks. Also worth note - with this discussion group, the lowest per-unit costs often lost out to other fiscal factors not always prominently present in FBO promotions and program websites.
“A lot of variables can come into play,” explained the part-time captain of a Cessna Citation XLS+. “Sometimes we make a decision we later have to explain to Accounting, when they only notice the price-per-gallon and not other factors in play at that same stop. We have to occasionally enlighten them about the world beyond unit costs and preferred-vendor declarations that can be linked to benefits for others who are not involved in the flight department or transporting our people.”
In his view, perks that benefit others come second behind attending to the fiscal and operational decisions impacting the flight department. “Sure, it might make the CFO look good if we use an FBO that gives the company points for our use of its special credit card or loyalty program. But not at the expense of several thousand more in fuel costs that will get charged to Flight – and that the same CFO would criticize at audit time.”
Thus a crew can face numerous elements in making a decision about where, when and how to handle fuel purchases.
Mission Criterion & Fuel Planning
Today it's rare for a pilot not to indulge in a bit of fuel-cost research before finalizing plans for a trip. Thanks to a plethora of research tools available online – both publicly or via private services on-line, the smartphone, or tablet, these air crew (and dispatchers for that matter) are well equipped to understand that a little knowledge-based tweaking to the flight plan can produce big savings at the fuel pump.
There may be some trade-off – and that's where weighing considerations comes into play. Consider the gold-standard outcome of a business aircraft flight: To land at an airport literally at the doorstep of the passengers' destination. More often, the passengers face some surface ride, so when another airport within a reasonable car ride offers lower fuel costs that trade-off (e.g. passengers taking a 20-40-minute ride), fuel prices need not be hugely lower to produce three, even four-figure fuel-cost savings.
Consider the following example: A light jet burning 190 gallons hourly at cruise, flying a 500-mile one-way trip. According to the data, you're looking at about 250 gallons of fuel, per data for a popular light jet. Stretch the trip to 1,000 miles and the fuel used rises to about 410 gallons. And if fuel costs $0.57 per gallon less at an airport on the opposite side of town, then refueling at that second airport offers a savings of a modest $143 versus the preferred FBO at the preferred airport. (And at 50 cents less per gallon, fuel at the non-preferred FBO at the preferred airport still saves about $125.)
Note: The preceding example uses prices for December 2013 in the Midwest; the savings cited, however, pale compared to other regions where a 30-minute car trip can produce a whopping dollar-a-gallon saving, and the savings in our example go up to $250 and $410, respectively, for the 500- and 1,000-mile legs. The bucks, of course, get bigger with price difference, leg length and aircraft size!
Home Field Advantage
It's a rare FBO that doesn't value a business-turbine owner's custom to the level of negotiating a fuel contract with a set discount. Almost as common is a contract-based fuel pre-purchase plan: The aircraft owner agrees to buy bulk fuel, in advance, at a set discount. Protection against price increases can add to appeal of such contract arrangements; some FBOs will even offer to recalibrate the fuel due should their costs drop.
Either approach can provide significant savings to the based-aircraft owner, and in the case of some chain FBOs they can deliver benefits at locations other than the home field. One of the other appeals of the fuel contract or advance-purchase comes into play on legs that allow the crew to tanker fuel sufficient for the entire trip. In detail, that means fuel enough to start, taxi, take-off, climb, cruise, descend, approach and land – out and back.
Sometimes it can be worth differing a couple of shorter trips and tackling them all in a day that allows the multiple stops using tankered fuel – purchased at the guaranteed home-field discount price. Of course, this requires a little research to be sure the crew isn't missing an opportunity to tank up on fuel at even lower prices than home field. And don't forget to check other factors that can add costs.
…Those Other Factors…
Another area worth checking to best align fuel costs and flight planning is another FBO-level piece of research to examine ancillary items: Ramp fees, courtesy- and crew-car access, restaurant and hotel deals.
We know of many an airport that exempts aircraft from its usual ramp fees – those money-making charges some FBOs levy for the privilege of your aircraft gracing their ramps. Some of those same airports flatly charge the fees, period. Others exempt part or the entire fee when the aircraft buys fuel (with some applying a sliding scale that only exempts the entire fee when fuel purchases run into the hundreds of gallons); and still more exempt the fee for any level of purchase.
The best practice - one corporate-flight consultant advices - is to do the research and be vocal about why you won't grace the ramps of those who tell you they exempt no one, or set a very high bar for full exemption from their ramp fees. “You want $250 to park and $7 a gallon? Thanks, but no.”
Of course, that trite statement can work only when you know of a suitable alternative. And, it should go without saying, that no alternatives are eligible unless the runway meets the aircraft's needs.
Price Clubs, Programs & Paybacks
Air BP has recently started its first loyalty program, but the genre has been around for a while: Join a program, use a specific payment card or method, earn points useable toward gifts, prizes, lowered fuel costs or some other tangible “reward”. What they really do is reward your loyalty to them, sometimes at a price and sometimes at a discount.
The key to this, mainline operators urge, is multiple memberships in as many programs as are practicable for the operation – particularly if the operation flies a far-flung map with little-to-no repeats or routine patterns. However, advisers caution that crew rewards – versus fuel-cost discounts – can become a decision driver beyond economic sense. That begins to happen when the reward's recipient spends more than necessary to add points to the rewards or loyalty program rather than to get the best deal for the company.
An important element of enrolling in these reward programs is clarity between company and crew about who exactly is signing up and where any perks or benefits go. This varies by company, with some insisting on retaining any benefits resulting from company spending, while others leave the perks to the crew as a reward for smart decision-making.
Clarity up-front is important, legal authorities counsel. Conversely, research shows that discount-fuel programs, when consistently used to gain the best discounts, can save a jet operation solid four-figures per month and five-figures in a year.
Dispatch operations, for those companies that employ them, can take all this research and work off the hands of flight crew and, at the same time, help assure consistent use of discount and loyalty programs, thus maximizing savings and perks.
For companies lacking a dispatch department another over-arching option is using a flight-planning service to plan flight, paperwork and fuel arrangements to the same end as dispatchers. These folks can help crew maximize winds, which can maximize savings on fuel and maintenance. Ultimately, though, no program or club can take the place of awareness and consistency in finding the sweet spot for minimizing fuel costs.
NBAA Top Ten Tips
Among the many services that drives operators to join NBAA are its vast library of resources crafted to help business-aircraft operators get the most out of their aircraft for the least cost. Beyond those resources NBAA publishes a wealth of useful information through a series of white papers developed around specific topics. Among them, “Ten Critical Strategies for Long-term Fuel Savings” is available (http://www.ascendwithnbaa.org/fuelwhitepaper). Following is a quick rundown of those strategies, many of which we've reviewed above.
Negotiate fuel discounts at your home base: Most business aircraft operators find their best price leverage exists at their home field and many FBOs offer tenants discounts based on the operator's fuel purchase volume at the home base. If such discounts are not advertised, as is often the case, be sure to request it.
Compare fuel prices at alternative destination airports and FBOs: Anytime the destination offers multiple options, operators should compare fuel prices at competing locations. Additionally, as noted above, it only makes sense to consider alternate airports whenever the price spread between the FBOs at the various airfields in a location area is substantial. Essentially, the bigger the area population, the higher the prospect will be for finding cheaper fuel.
Fuel contract programs and credit-card rebates: Enroll in contract fuel programs with frequently used FBO chains and nationwide fuel suppliers. An online search will reveal which suppliers serve the destinations you most frequently visit. Alternatively, use a credit card that offers discounts or rebates for fuel purchases.
Consider self-service fueling: Typically sold at a discount, self-serve fuel can save up to $0.50 per gallon – as much as $500 per fill-up for a medium jet.
Modify the way you fly: The best approaches are often the simplest, such as minimize use of engines and APU unit while on the ground; seek higher altitudes and direct routes from ATC; and several other similar minor changes.
Carefully calculate on-board fuel requirements: Calculating fuel needed for any given mission makes sense beyond range and reserve issues, to a point. Buying more discounted fuel at home base may help keep down your average fuel costs but the extra weight can initially impact climb and total fuel burn, however. Calculate the fuel need both ways.
Weight reductions: Cutting aircraft operating weight lowers the amount of fuel used, saving money. Regularly inventory all items routinely carried, both in the cockpit and cabin. The effort may reveal ways to cut weight by eliminating non-essential items or changing to lighter essential items. For example, carbon-fiber auxiliary oxygen tanks can weigh as much as 60 percent less than aluminum tanks.
Aircraft maintenance and fuel efficiency: It's no secret that well-maintained, properly rigged aircraft use less fuel. Be sure to check aircraft control rigging, especially after painting or major maintenance. And both piston and turbine engines get dirty inside, warranting fuel-saving cleanings.
Aerodynamic maintenance and improvements: How well fairings fit, gear doors mate and panels seat impacts even the cleanest aircraft's aerodynamics. There are a number of maintenance procedures and aerodynamic improvements that can improve fuel efficiency – saving you money.
Is a private or co-op fuel farm an option for you? If your flight department operates a larger fleet of business aircraft – or if you can partner with other major operators at your home base – you might realize significant savings by building your own fuel farm stocked with fuel-purchased wholesale.