Self-Service Fuel: Airport Money-Maker

With nearly all of America’s 110,000 gas stations offering 24/7 credit-card, self-service pumps — isn’t it odd that only about a third of our nation’s some 3,600 airports do the same? To make matters worse, many pilots only have time to fly evenings and on holidays, when many FBOs are likely to be closed.

Consider the benefits of a modern self-service fuel station:

  • Available 24/7; convenient; safe.
  • Self-service fuel generally sells for less than full-service.
  • Reduces fuel theft through sophisticated pump controllers.
  • Web-based tools allow owners to monitor fuel operations 24/7 from a hand-held device.
  • Allows private or public cards as well as proximity keys for authorization.
  • Significantly lowers personnel and fuel vehicle costs.
  • Pre-engineered and pre-fabricated to lower engineering, site prep, and installation costs.
  • Modest-capacity systems sized for general aviation are highly affordable.
  • Strong cash flow makes private financing possible and allows quick amortization.

Why don’t all GA airports have self-service fuel stations? Arguments FBO managers have given in the past include costs, funding resource, limited use, and that fuel trucks are preferred.

While some of the above opinions were true years ago, aviation has changed. Small systems start at around $35,000; State funding is not needed as private financing is generally available; private jets and turboprops do use properly positioned fuel systems when available; and trucks can be expensive and require trained personnel to operate them.

Self-service fueling can lower costs and increase revenue. Add to this the growing popularity of unleaded aviation fuels such as ethanol-free autogas and UL91 — the timing for the investment in such systems seems right.

History; Safety

The first self-service fuel station for aviation was developed in 1987 by Michael Webb, private pilot, aircraft homebuilder, and owner of Oshkosh Aero, an FBO once located at Wittman Field in Oshkosh, WI — and later acquired by Basler Flight Service when Webb founded U-Fuel to support his growing business in fuel equipment.

Since we’re dealing with highly flammable liquids, built-in safety features for a modern self service fuel station are absolute necessities. With U-Fuel, the features include double-walled fire resistant tanks (stainless steel or internal epoxy lining in the case of jet fuel), emergency vents, a fire valve, normally-closed solenoid valves, and various other components required by fire safety regulations.

Popular options to enhance usability and safety include lighted covers; “kiosks”, or small built-on enclosures that provide a dry environment for transactions; electronic fuel level & leak monitoring systems; an automatic fire suppression system over the pump; listed tanks; and vehicle collision protection through crash posts/bollards or concrete partitions/dividers.

Site Prep & Installation

Site preparation consists typically of a concrete pad with phone and power hookups. 120V single-phase power is sufficient for most fuel stations found at GA airports. In fact, the low power requirements make the use of DC systems connected to a small windturbine or solar panel possible in many instances.

Installation involves the rental of a crane for a few hours and simple electrical connections and petroleum equipment checkout, which must be performed by a licensed installer and electrician.

Economic Aspects

Airports are often dependent on the 50-75 cent margin per gallon that is typical for fuel sales. In most instances, the federal government’s Airport Improvement Program (AIP) excludes funding of revenue-generating facilities such as hangars and fuel stations. Therefore, the total ownership cost (TOC) of a self-service fuel station must allow quick amortization of loan costs and have minimal operational and maintenance expenses.

Unlike most other capital equipment acquisitions at airports, self-service fuel stations are revenue generators, and as such are generally excluded from state and federal funding programs. Due to strong cash flow, self-service fuel stations are excellent candidates for private financing, allowing airports to acquire systems far sooner than through traditional bureaucratic channels.

For instance, at October 2011 interest rates, a 60-month loan for a $60,000 system results in payments of approximately $1,200 per month or $14,400 per year. With modest annual sales of 24,000 gallons of fuel at a net margin of 75 cents per gallon, loan payments will be covered. After five years, the loan is retired and the system is generating more profit.

Not included in these calculations is the greater volume of fuel that is sold since the system is available 24/7, and the savings incurred from lower personnel and fuel truck costs. U-Fuel has partnered with American Equipment Finance to offer customers highly attractive terms to lease or finance systems.

Station or Truck?

Despite the flexibility offered, fuel trucks can be expensive due to an array of safety equipment they must include. A new fuel truck with a small capacity tank will cost at least $50,000; larger trucks can cost upwards of $150,000.

According to U-Fuel’s president Michael Webb, who maintained a large fleet of fuel trucks at his former FBO, Oshkosh Aero, “Maintenance and personnel costs of fuel trucks can be very substantial. For instance, cold weather can cause the vacuum interlock systems to freeze up, or even a small speck of dirt will clog up the overfill protection.

“I used to have nine ramp trucks for the EAA AirVenture show, and one mechanic dedicated to keeping them running.”

Self-Service and Jet Fuel

GA has seen the growing popularity of light turboprop- and turbofan-powered aircraft. With the inevitable demise of leaded avgas looming, many current high-performance piston engine aircraft operators will switch to turbines; this is already the case for those who fly in developing countries where autogas and Jet-A are the only two aviation fuels available.

While self-service fueling of turbine aircraft poses no major challenges for self service fuel stations, there are a few important differences compared to autogas or avgas, which increase costs somewhat:

  • The weight of turbine aircraft often requires tow tugs for ground handling.
  • Jet aircraft are normally parked 90 degrees to the pump allowing for straight departure.
  • Greater wingspans require longer hoses (75 feet - 100 feet) to reach tip tanks on the far wing.
  • Larger aircraft fuel tanks require a larger pump with a higher flow rate — 50 gpm instead of 22 gpm for autogas/avgas.
  • Self-service systems equipped with Single Point Fueling require interchangeable nozzles.
  • Jet fuel requires that the inner tank of a fuel station should be made of stainless steel or be epoxy coated for microbial protection, while the outer tank is made of carbon steel.

The Future Is Now

U-Fuel has been working the past few years to lower the cost of self service fuel stations and provide a broader spectrum of products with tank capacities beginning as small as 1,000 gallons.

In order to further reduce the installation and operational costs as well as allow complete portability, we have recently developed wireless communication, solar- and wind-powered options, allowing customers to place or reposition the system anywhere on the airport. Evolving from “boxstations”, created for remote mining and oil/gas exploration, the “FBO in a Box” concept provides basic services including fuel, restroom and office facilities, phone, Internet, and vending in a climate-controlled enclosure.

Summary

Borrowing from commodity production of fuel equipment in other markets, U-Fuel has lowered the cost of acquisition of such systems while making numerous advances to safety, reliability, and convenience. With the “FBO in a Box” concept, the company now offers a solution to airports seeking ways to offer services to pilots without incurring high personnel and equipment costs.

about the author

Kent Misegades is an aviation sales representative for U-Fuel of Elk Mound, WI. A pilot since 1973, Misegades is a director of the Aviation Fuel Club, co-author of the GAfuels blog for generalaviationnews.com, and president of EAA Chapter 1114. Contact the author at kent@ufuel.com

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