"Tucson airport to get out of business of pumping plane gas"

Saturday, May 12, 2012

Tucson airport to get out of business of pumping plane gas
By David Hatfield
Inside Tucson (AZ) Business


As gas station owners can attest, there's no money to be made anymore
pumping fuel. This week the Tucson Airport Authority (TAA) board voted to
get out of the business of pumping it for planes at Tucson International
Airport as well.

Dick Gruentzel, vice president of finance and administration, said the
airport authority is "losing hundreds of thousands of dollars a year"
providing the service.

Before the vote, TAA President and CEO Bonnie Allin told the board it
appears Tucson International "is alone among comparable airports" in
directly providing fueling services. Instead, she said, the model is for
medium-sized airports to lease fueling operations to a third-party
specialist.

The situation at Tucson International has been exacerbated by the fact that
traffic has dropped to less than 76,000 operations - a takeoff and landing
is one operation - from 164,000 five years ago, Allin said.

But getting out of the fueling business isn't going to be easy or quick.
Allin said it could take up to three years. None of the 23 employees
currently dedicated to pumping fuel will lose their jobs. Allin said all
will be offered positions filling existing vacancies within the TAA.

The plan is to start immediately by discontinuing fueling services for
general aviation aircraft and transferring those operations to the four
independent fixed-base operators currently selling fuel at the airport.

It will take longer to change the fueling procedures for airlines since
their contracts with the airport require they buy fuel from TAA. Gruentzel
said airlines that had been briefed of the plan were supportive.

"Airlines like the idea of having more control over their costs and this
helps with that," Gruentzel said, noting that Delta Air Lines even went so
far as to announce this month it will pay $150 million to buy a refinery
near Philadelphia in an effort to cut $300 million a year from its jet fuel
bill.

The proposal drew debate among TAA board members Tuesday. Chairman Tom
Zlaket argued that it was a major operational change worthy of review by the
board as it progressed. Other board members encouraged the staff of the TAA
to work as swiftly as possible to make the change to cut losses.

One board member, Steve Cole, who owns a plane himself, said he anticipates
pilots and fixed-base operators will welcome the change. Pilots should
welcome the new competition at the airport and fixed-based operators will
lose the airport itself as a competitor.

Publicly posted fuel prices this week at Tucson International among the
private fixed base operators ranged from $6.21 to $7.39 per gallon for
full-service low-lead Avgas for general aviation aircraft and $5.20 to $6.43
per gallon for jet fuel. TAA's price at the Executive Terminal was $5.86 for
Avgas and $5.32 for jet fuel.

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