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One Reason For High Avgas Prices

JDRhodes

Well Known Member
Jet fuel is going down - We buy Jet A (20,000 gal a month) at under $4 a gallon. But 100LL prices remain high and are still increasing. Talking to our FBO manager today gave be a little insight.

The FBO here is at a busy Atlanta suburban airport. Still - the volume of Avgas that they sell doesn't allow them to buy full tankers full. They buy 2000 gal at a time, rather than the 8,000 gal tanker loads of Jet. For partial tankers, they pay a $.40 per gallon penalty, which they have to pass along to the consumer.

There just isn't much Avgas being used. Little airplane flying is down. And when we do fly, we buy 10, 20, maybe 80 gal at a time.

We burn 80 gal of Jet A in the Gulfstream just to taxi for takeoff.

Low demand = high prices. What's the solution?

*** High Avgas Prices** it won't let me edit typo in the header.
 
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it's supply/demand, makes sense to me

personally I'm fine with less GA traffic, makes for less congestion in the air, I doubt i'm the only one who feels this way
 
Gas Prices

20GA buys it by the tanker load. That is why they are the cheapest price in the ATL area.
 
There just isn't much Avgas being used. Little airplane flying is down. And when we do fly, we buy 10, 20, maybe 80 gal at a time.



Low demand = high prices. What's the solution?

.


Solution = We all need to go fly more to increase demand which will actually cause our cost per hour to go down which means we can then afford to fly more. So the more you fly, the cheaper it'll be for everyone. :D
 
Solution = We all need to go fly more to increase demand which will actually cause our cost per hour to go down which means we can then afford to fly more. So the more you fly, the cheaper it'll be for everyone. :D

Ah, "airplane math" :) The more you fly, the cheaper it is...fly enough, and the airplane will pay YOU to fly!
 
I paid $9.13 per gallons for 100 LL at OpaLocka (Miami) about two months ago. Glad it was not my money.
Phelps
 
Use Mogas

Forget Avgas and use Mogas, works for most RVs,
but we have beat that horse to death a few times already.
 
My son is a FBO manager and has just made the decision to stop selling avgas. He said there was not being enough sold to justify the resources it takes to keep it. The airport is not used a lot by GA aircraft and most of the commmercial AC are turbine powered.

Too bad, I was hoping I could get some of the spillage. :(
 
I dunno guys. I had an FBO in a town of 2000 people. I always bought full tankers of 100LL and always tried to price it the lowest in the area (couple hundred miles). I always figured it was part of paying the dues of having an FBO. I used to sell jet at about 12:1 over gas. There was more money in lav services than there was in 100LL. I think its greed to tell you the truth. Business models today go for immediate return. They couldn't really care less about the future.
 
I'll have to ask the Platte Valley guy if he gets 2000 or 8000 gallon loads. Their gas is usually the least expensive around. I know that he isn't looking to gouge anyone and really tries to keep the prices as low as he can. I believe that in turn helps to keep the other airports in the area a little lower too.

I don't often go over there anymore because the runway and taxiways are a little rough, but the guy that runs that little operation there is always around aviation in one form or another.

On the other end of the spectrum is the FBO at KBJC, where I am based. $6.64 a gallon now. Prices went up and service down after they bought out the other FBO on the field. That's $1.60 more than Platte Valley roughly 25 miles away. There are plans for a self serve pump though, and I'm really hoping it gets here soon.

I agree with aerhed.
 
We have 08A on a more-or-less balanced budget, i.e. no significant local taxpayer contribution to operating expenses. The only revenue streams are t-hangar/land leases and avgas sales, both under municipal control. Prices are reasonable (currently $150 for a t-hangar, $1500/acre for land, and $5.49 for self-serve fuel). The airport manager is a contractor with specific responsibilities who is paid a small annual fee. He is free to pursue other revenue sources (like flight instruction and maintenance).

An airport is like any other business. It's all about the overhead. Line boys, security systems, fancy buildings, running water in the t-hangars....I think I've heard every "we need" in the book. Well, we don't, and it's how the prices remain reasonable.

Contrast with my stop in Boca Raton last week. Line crews, tanker fuel to the plane, pretty girls at the counter, and the sort of building which costs $500 sq/ft. Four flight planning computers, cologne in the bathrooms, elaborate security systems and more, all funded by a large for-profit FBO chain. Sure, it was a nice place. Is it any surprise that 100LL was $8.49 and a single night in a hangar was priced at $100?

Fuel prices are as much about local costs as anything in the wholesale distribution chain. Watch what you ask for. You might get it.

Back to 100LL. Under our old independent FBO model the operator priced in what he felt was a worthwhile profit and bought 2000 gallons every few months. After a switch in business plan we tried volume pricing and went to 8000 gallons each month by underpricing everyone. Later we raised prices based on an average market model and watched volume decline. Fuel is a commodity and consumers have the tools to find the lowest price. I suspect most operators can adjust fuel volume as desired.
 
There are several takes on this. I used to work for a Millionaire FBO for a couple of years. We were located next door to a "budget" FBO that sold fuel for far far less than we did. We offered rental cars, free fresh baked cookies, limo service, tanker trucks to your plane refueling, computers, and even catered meals to your cabin. MANY people that needed none of the fancy services would fly in and fill up their Cherokee or Cessna 172 type plane with us. I can only surmise that these people thought they were getting better fuel from the fancy FBO, and it was worth a couple of dollars more per gallon to them. As a professional tightwad, I could never figure those people out.
 
As a professional tightwad, I could never figure those people out.

Don, I was in Aspen last week and needed some gas for my truck. I bought 2 gallons because if was $4.98/gallon. I just wanted enough to get out of town! There were others there filling up their cars and trucks. Crazy.
 
Greed

At my little airport the county currently adds about a $1.40 a gallon over the wholsale price.

But, they don't provide ANY services other than a runway and cut grass.

What a deal huh?
 
More than you think

At my little airport the county currently adds about a $1.40 a gallon over the wholsale price.

But, they don't provide ANY services other than a runway and cut grass.

What a deal huh?

Actually, they probably provide:
The tanks to store the fuel in
The pumps to pump fuel
The CC fees to process the payment
Someone to monitor and manage the fuel inventory and supply
Insurance for liability and airport property
Electricity
People, fuel and equipment to cut the grass and maintain the property

How much fuel to they sell? Avg 500 gal a week? Maybe more on a good weekend, but what about during a rainy December week?

So to cover all the above "services" they are bringing in $700 a week? $2,800 a month. Pretty thin.
 
We have the opposite from the original post. If we don't buy a full tanker load (8000 gall) we pay a penalty.

Occasionally, when the prices are shooting up, we get offered a split load with another close by airport with no penalty. With storage tanks being typically 10,000 gallons airports have much leeway in when they have to fill tanks before running out of fuel to sell.

There are quite a few fixed costs asociated with maintaining and testing the fuel and tanks which add to the price. One of these is insurance for our underground strorage tank that runs over $2000 per year. Adds 6 to 7 cents per gallon...
 
Shhhh!!!! Don't confuse them with math! :D

Actually, they probably provide:
The tanks to store the fuel in
The pumps to pump fuel
The CC fees to process the payment
Someone to monitor and manage the fuel inventory and supply
Insurance for liability and airport property
Electricity
People, fuel and equipment to cut the grass and maintain the property

How much fuel to they sell? Avg 500 gal a week? Maybe more on a good weekend, but what about during a rainy December week?

So to cover all the above "services" they are bringing in $700 a week? $2,800 a month. Pretty thin.
 
Low demand = high prices. What's the solution?.

Lower the price to something even remotely comparable to your neighbors and we won't fly to other airports to buy gas...

According to AOPA, "busy Atlanta suburban airport" is asking $1.44 MORE per gallon for AvGas than "small town airport", a short 5 min flight away. I don't know about you guys but I like to fly. And flying to another airport to get cheaper gas sounds like a good excuse to go fly.

If you eat the initial overhead of lowering the price, word will get out and you will sell more gas.
 
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