Chevron Makes a Transition in the Marketplace ...

... and with that move comes the potential for more play in the aviation services sector. After all, anytime a major player in the fuel supplier network to fixed base operators and airports takes a new direction, the market reacts. On that prospect, Marty Hiller, head of the Tampa-based Hiller Group comments, “You may see some shifts in suppliers. I saw one Draconian article that predicted that avgas was going to go to $8-9 gallon because of this transaction. But nothing’s different. What’s changed is Hiller and the distributors are going to be able to deliver a greater level of service to these direct customers than they were previously receiving.” Fact is, Chevron has made the strategic decision to leave its interaction with Chevron and Texaco branded dealers to its distributors, with the Hiller Group at the head of the class. Explains Hiller, “It means that between the four distributors – the two national distributors, Air Petro and Hiller and the regional distributors, which are Purvis Brothers (Midwest, Northeast) and Bell Petroleum in the Long Island/New York market – we did the majority of the business.” Hiller acquired Air Petro officially on May 1; the Chevron announcement came on May 5. Says Hiller, “In the past, we were very much in the background. Most of the FBOs and most of the industry understood who we were and how we marketed. Because of the national exposure with both the purchase of Air Petro and this shift, you’re going to see a much more public face, both with the national trade publications and the national organizations where we’ll take a lead there.” A key component of this announcement is that Chevron remains a major player in the production of jet-A and avgas, with the emphasis on the latter. It’s not abandoning the industry supply chain … just changing how it’s going to market. During our telephone interview, I felt compelled to ask Marty Hiller about the Environmental Protection Agency’s renewed focus on getting the lead out of aviation gasoline. His reaction: “I was concerned. “It’s my understanding that EPA did some testing. I think in the future you’ll see a lower lead product, but while that product will be different, it’s still going to require specialized care, the same distributive channel as avgas, which is challenging. “When you look at the overall market for aviation gasoline – whether it’s 230 million gallons, or 240, or 260; there are estimates all over the place – that product is going to need to be handled selectively. And there’s still only going to be a select number of refineries that can make a high-octane product.” Thanks for reading. jfi