Fueling on the Fast Track

Feature Fueling on the Fast Track Independent service provider Swissport Fueling has thrived under new ownership and is now demonstrating its true growth potential, writes Richard Rowe By Michelle Garetson/p> By Richard Rowe September 2002...

The available market is also very different. A significant amount of jet fuel delivery is accomplished through airline consortia, which means that restrictions such as those faced in ground handling are not significant. Opportunities for specialist companies have existed ever since the 1960s when the oil companies stepped out of the business and the airlines brought in independent companies to operate fuel systems on their behalf.

Today, Swissport's largest into-plane customer is America West and the company handles millions of gallons a year for the carrier at Phoenix alone. Other large into-plane customers include Southwest and a host of U.S. major and international carriers from Delta, United, and Continental to Air Canada, British Airways, and Lufthansa.

Seven of Swissport's 11 stations involve Maintenance and Operation (M&O) contracts where the company provides complete fuel system management as well as into-plane fueling, mostly on behalf of airline consortia at each station.

By far the largest station is Phoenix SkyHarbor, where the old DynAir first pioneered the use of fixed hydrant carts — now almost the industry standard across the U.S. The Phoenix station also involves the management of a complete hydrant fueling system from a 16 million gallon off-airport storage system, a four million gallon on-site tank farm storage system and an 11-mile, intra-state pipeline and pumping system that delivers fuel from the Central Phoenix terminal to the airport itself.

Swissport Fueling

"We work with a consortium of airlines known as the Arizona Fueling Facilities Corporation," explains Jim Vescio, General Manager. "We also provide approximately 90 percent of into-plane fueling here."

Although itself the subject of a recent acquisition, Swissport Fueling has spent the last couple of years growing steadily through the conventional bid process rather than acquisitions of its own. While positive, the flip side is that such a strategy is dependent on when bids come out, which tends to be few and far between.

"That said, we have won our share of the bids that have come out," says Comeau. "We hope to continue growing the business in North America through the bid process and we are now anxiously waiting on another couple of bids to come out."

Comeau sees plenty of additional airports he would like to get into, but concedes that realistically the chances of entry are slim. Fuel system operators at international gateways such as JFK have invariably been in place for decades and airlines, or consortia of airlines, do not switch fuel supplier lightly in such cases. Fueling is a different world to the 60-day termination clauses of the ground handling market. "We have targets, but we also have to respond to everyone," says Comeau. "So, it's more of a shotgun blast than a rifle shot approach."

The full package M&O/into-plane contract is Comeau's preference, but is not always possible. Bids tend to be separate, and if an incumbent fueler already provides M&O services, it is strategically and financially better placed to also pick up into-plane work.

Comeau points to Boston Logan as a good example. "Boston has one of the most modern and expensive systems ever built and we were brought in by the airlines to oversee its construction," he explains. "Today, we maintain and operate the system on behalf of the airlines and have since got into the into-plane side of the business there."

Such recognition bodes well, says Comeau, and suggests that the airline community thinks highly of the company's technical ability. It is also an opportunity to develop a genuine competitive edge. "After all, everyone's role is to put clean, dry fuel into an airplane and there are plenty that can do that. So, if the customer has a perception that you have the technical ability to run their fuel system, clearly you have the technical ability to run their into-plane as well."

Creative Spirit
For competitive edge, also read entrepreneurial thinking, Comeau is acutely aware that in a service business like fueling an airport location is only as good as its local manager. "You can have the best systems and programs," he says, "but if you don't have a good manager then you will not prosper."

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