- 26 Mar 2021
- David Wyndham
- Operating Costs
What should you know about benchmarking fuel costs and ensuring you have the best fuel card discounts available for your flight operation? David Wyndham discusses…Back to Articles
Fuel prices are rising once again. As of early February, the AirNav.com US FBO Fuel Price Survey reported the average price of Jet A to be $5.01 per gallon, with the range of reported prices varying from $2.75 up to $9.99 per gallon.
Regardless of what your flight department pays for fuel, it's wise to shop around to see if a jet fuel discount card is right for you. Before you do that, you need a benchmark point of reference, i.e. ‘What are you paying right now?’
As the name implies, ‘Contract Fuel’ is a contract with a vendor to purchase fuel. It can be a ‘cost-plus’ type of arrangement, where you pay a set amount over the price the FBO has paid. More commonly, however, it is for a set discount per gallon of fuel. In order to secure the discount rate, you need to agree to purchase a set amount of fuel over an agreed period of time.
This type of arrangement is used by large operators, including airlines, major charter management companies, and government operators. Jet fuel card programs can also use this method to negotiate price discounts.
If you are a small operator, you may be able to negotiate a contract fuel discount at your home base FBO. The amount per gallon will depend on how much fuel you purchase. Just keep in mind that a fuel discount at your home airport is great, but it may not help when the aircraft is away from the home base.
Do Your Homework
Before you “pick a card, any card” you’ll need to keep three things in mind. The first two are “Where do you fly?” and “How much fuel do you purchase?” Having a fuel card accepted at over 3,000 FBOs will be of no use if your most frequented FBO is not on the list.
It should be easy to check over the past couple of years’ trips to see which FBOs you frequented, and the volume of fuel you purchased.
Many operators have a preferred FBO, based on its services and location, not just the fuel cost. Popular Business Aviation airports often have two or three FBOs to choose from, while the major airline hubs may have a single Business Aviation FBO. Which works for you?
The third consideration is whether you just want discount fuel, or a program with ancillary services included. Ancillary services can be reward point programs, or they can be value-added services. Reward points may be used for travel, such as rental cars and hotels.
What are your Options?
Two trip planning companies, UVAir and ForeFlight, have partnered with jet fuel card programs World Fuel Network and JetFuelX, respectively, to combine a discount along with their trip and flight planning services.
The trip planning helps you pick out which FBO has their co-branded fuel card. Depending on the location, they can quote a price and help arrange ground services and handling for your arrival.
Other companies align themselves with multiple FBOs and fuel providers in an effort to give you many different options. For example, AvFuel has about 650 branded FBOs and also contract fuel pricing with over 3,000 other locations, while the Epic Fuel Card advertises over 8,000 locations.
Alternatively, rather than taking the ‘bigger is better’ approach, Paragon Aviation Group connects over 110 independent FBOs with their member flight departments. Partners include key vendors that can assist with things such maintenance services, international trip support, as well as contract fuel.
One other option for Part 91 flight departments (or Part 91 managed flight operations) is the Corporate Aviation Association (CAA), a $500-peraircraft-per-year fee-based membership program for corporate operators.
With connections to hundreds of FBOs, many based outside the US, CAA also partners with ForeFlight for trip planning and FlightBridge for hotels, rental cars, and catering.
When comparing fuel card programs, answer the following questions:
1. Where do you fly to most regularly?
2. How much fuel do you purchase?
3. Do you use the fuel cards’ member FBOs already?
4. Are you looking for the best discount per gallon?
5. Does the fuel card provider prearrange for fuel to be ready when you arrive?
6. Are there membership fees?
7. How is the fuel billed? (Through the card, or via a different method?)
8. Does the card provider connect to, or use, services that you currently use (such as flight planning software)?
9. What ancillary services would add value to your flight operation?
10. Are you a Part 91 operator?
11. Have you contacted the card vendor for more details…?
The jet card programs mentioned above are in no way an exhaustive list. The FBOs that you prefer, and frequent, can tell you which cards they accept. If you regularly use trip planning services, their associated card programs and ancillary services may be directly included with the trip planning.
Ultimately, don’t limit yourself to a single card. Having undertaken a benchmark survey of operators, I discovered most of them carried between four and seven different cards. Do your research and ask the card vendors questions that are specific to your operation and requirements.
Read More About: Operating Costs