Self-Service Fuel: Airport Money-Maker

May 28, 2012
An in-depth look at the benefits of self-serve fueling systems for airports

When was the last time a gas station attendant fueled your car? 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? After all, if Jay Leno can pump gas into his priceless Duesenbergs, why can't pilots be trusted to top off their own aircraft? To make matters worse, many pilots only have time to fly evenings and on holidays, when many FBOs are likely to be closed.

Pros and Cons

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

• Available 24/7, convenient, safe, and pilots prefer it.

• 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 any 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.

Given the benefits, 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, which is less than a ramp truck; 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 are very 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 94UL — 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 installing the first such fuel station, U-Fuel has introduced a variety of systems, from small “Mini-Fuelers” to large multi-fuel installations serving autogas, avgas, and jet fuel. U-Fuel products are now found at airports, marinas, private vehicle fleets and in mining operations.

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, these 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

Just as most commercial buildings these days are pre-engineered and pre-fabricated, so to are modern fuel systems. Site preparation consists typically of a concrete pad with phone and power hookups. 110V 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. A local fire marshal or similar licensing authority will haveto make a final inspection before operations can begin.

Economic Aspects; Financing

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, like AIP. 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 thesecalculations 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.

Volume Production Reduces Costs

One of the best means to reducing costs is to tap into volume production from other market segments. For instance, auto engine conversions as powerplants, commodity hand-held devices as navigation instruments, autogas as an aviation fuel, and standard components found in fuel systems used at our nation's 110,000 gas stations.

One example of the latter point is the Exacta line of pump controllers from MultiForce of Princeton, NJ. Incorporating a credit card reader in the face of a conventional pump, these controllers have allowed a significant reduction in the cost of self-service aviation fuel systems and provide better isolation of the card reader and sensitive receipt printer from the environment, which can be harsh on airport ramps.

Station or Truck?

Despite the flexibility they offer, fuel trucks can be expensive due to an array of safety equipment they must include, for instance:

• Trucks must include an interlock system that automatically locks the brakes when the pump starts. If these systems fail you cannot move the truck, even if everything else works.

• The exhaust system must be rerouted to prevent ignition of fuel vapors or leaked fuel.

• Overflow prevention valves are needed to stop filling before the tank reaches its capacity.

• Roll-over protection that includes emergency venting that closes, should the truck overturn in an accident.

• Electric reels must be coupled to an interlock system to prevent operation when the truck is inmotion.

• A thief pump and fuel filters, for both in- and off-loading, are needed.

For these reasons, 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 keep 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, which are rare at GA airports.

• 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.

• Misfueling by pilots is eliminated as they are intimately familiar with their aircraft.

The Future Is Now

At U-Fuel, we have been working hard 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. To best accommodate the evolving mix of fuels, these systems can handle two, three, or even four different fuels.

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 airports. Evolving from our "boxstations", created for remote mining and oil/gas exploration, is our "FBO in a Box" concept, which provides basic services including fuel, restroom and office facilities, phone, Internet, and vending in a robust, climate-controlled enclosure.

Summary

Modern self-service fuel stations offer airports many benefits, the most important one being the bottom-line return on investments starting at $35,000 for a single-fuel system with a 1,000 gallon tank capacity. 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 necessary services to pilots without incurring high personnel and equipment costs.

“Self-service is very important - about 30 percent of our non-jet fuel sales are outside of working hours. At Barnwell, self-service is available 24 hours per day, 7 days per week. Pilots rely on being able to get fuel at any time and don't have to rush to make it in time.” Cal Hoffman, Manager, Barnwell Regional Airport (KBNL), Barnwell, SC.

“I believe that self-service fueling is very important, since it allows for 24 hours a day fueling. Pilots stop by our airport to buy autogas or avgas, then stay for lunch at our restaurant, helping to keep it in business.” Kent Marshall, Manager, Suffolk Executive Airport (KSFQ), Suffolk, VA.

About the Author

The author is an aviation sales representative for U-Fuel of Elk Mound, WI (www.ufuel.com). A pilotsince 1973, he is a director of the Aviation Fuel Club, sponsored by U-Fuel (www.aviationfuelclub.org),co-author of the GAfuels blog for generalaviationnews.com, and president of EAA Chapter 1114 of Apex,NC (www.eaa1114.org). His first job in aviation was at age 15, pumping fuel into aircraft at KentuckyFlying Service, Bowman Field, Louisville, KY.Contact the author at [email protected]

About the Author

Kent Misegades | Aviation Sales