Changing Face of Fuel

Much as the fixed base operator community has seen consolidation in recent years, the companies that supply a primary product, fuel, are also consolidating. Comments Steve McCullough, VP sales and marketing for AirBP, “I believe that the consolidation was inevitable. It started, really, with the FBOs consolidating a couple years ago, and it seemed quite natural that it would lead to wholesale [distributor] consolidation at some point in time. So I happen to think that those that are left are going to continue to try to differentiate themselves, to find a unique place in the market, to offer something different.”

Relates Avfuel president Craig Sincock, “We’ve seen a trend for years where the major integrated oil companies want to step back in the value chain and turn to exploration and maybe refining. And that’s not just for aviation; that’s for motorgas, too.

“I see it as a good change that will probably be better for the dealers because the resellers have always been a lot better at focusing on the customer than large companies.”

Not all fuel distributors contacted for this update on the industry agreed to comment — in particular, World Fuel Services, a wholly owned subsidiary of World Fuel Services Corporation and the firm which has been making headlines of late with its acquisitions. The company is still formulating its plan on how it will go to market, according to one official, following recent acquisitions of Western Petroleum, Ascent Aviation Group, and The Hiller Group, which in 2010 entered an agreement to distribute Chevron fuels. World Fuel also owns credit card firm Avcard and flight planning firm BaseOps.

The concept of expanding into flight planning brings with it the potential to have a relationship with the end user from start to finish — not just refueling the airplane. It’s a concept which Avfuel has also embraced with the 2010 acquisition of Pacific Coast Forecasting, which has been rebranded Avplan Trip Support.

Explains Sincock, “It’s been very positive; it kind of rounds out and completes some of the services that we think we need to provide. We’re always looking to add value to our relationships, and this was one where we could add value.”

AirBP’s McCullough echoes the thought that suppliers need to continue to evolve the services they offer to dealers. He says, “At one time it was, ‘Can you help me get a fuel truck?’ Then it became, ‘Can you help me with storage?’ I don’t know if what they’re looking for has changed dramatically, but the focus is different, such as on price. FBOs and their customers are much more sensitive to price today, although that’s not the only reason our customers make decisions.

“They have to have the right balance between what they’re paying for the product and what they’re getting in terms of value from that supplier.”

Loading