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Special Focus – Reducing Fuel Costs: Planning ahead pays dividends for aircraft owners and operators on routine flights and in emergencies
Service suppliers are working to coordinate all the information necessary for private aircraft owners and operators to organise the best fuel prices at the start of a trip and to cope with changing scenarios and emergencies.

Service suppliers are working to coordinate all the information necessary for private aircraft owners and operators to organise the best fuel prices at the start of a trip and to cope with changing scenarios and emergencies.

Air Routing is coordinating flight support services and fuel planning; Avfuel is rolling out Avplan, a flight planning and ground handling service; and Universal Weather and Aviation is combining tax minimisation services with flight planning and trip pricing options.

Universal says it has introduced two new services, tax minimisation and online fuel tankering analysis. It recently opened UVair European Fuelling Services Limited in Shannon, Ireland, to help clients calculate VAT on their European fuel purchases, headed by general manager Steve Woods.

Woods says the new operation provides a VAT compliant and exempt invoicing service. "We are working with accountancy firms to obtain advice on how our clients can qualify for exemption from these taxes and enjoy the resultant fuel price benefits," he adds. "The service was launched with a detailed examination of the tax laws of nine European countries and has been expanded from there."

The service enables charter owners and qualifying aircraft to benefit from fuel savings that could be in the region of 20 per cent. It is currently available in Austria, Belgium, France, Germany, Ireland, Italy, Spain, Switzerland and the UK with further countries to be added later this year. Woods says: "We gather the necessary information, make the arrangements and receive the invoice on behalf of the owner or operator, at the same time providing advice on whether VAT is due or not. The owners and operators simply provide us with the requested documentation to start the process."

Tax efficiency is an important aspect but day-to-day fuel operation efficiency is based on fuel analysis, ordering and flight planning.

Similarly, UVflightplanner.com, Universal's online flight planning system for business aviation, was recently enhanced to help operators reduce fuel costs through its new integrated fuel tankering calculations, according to product manager Marcus Walker.

Different percentages

The system now enables operators to decide the best times and places to replenish tanks. "The system handles both of these tasks in one application in addition to the runway analysis and weight and balance calculations," he says. "The operator can finish the job by ordering fuel online through the web site. The system gives the cost and different percentages of savings possible based on the maximum fuel uplift possible at the locations specified. The user can compare the financial loss or gain on fuel in each location and see which outlets provide the optimum overall cost for the trip. The system takes prevailing winds into account which increases the accuracy."

Randy Stephens, senior director specialty products, says: "The operator can calculate whether to uplift a greater amount of fuel where it is less expensive or whether the extra weight carried would nullify that gain. The system uses the optimum flight path rather than the great circle routes and the feedback is that clients are very happy not to have to number crunch separate calculations in spreadsheets."

Air Routing points out that fluctuations in global fuel prices do more than press pilots and corporate flight planners into searching for the most economic routes. "They also find they must juggle the other logistics involved in coordinating often time-sensitive and important business travel," says Scott Fowler, manager of fuel support. "Only a couple of companies in the business sell fuel and trip support services," he adds. "We've brought to the table more - trip support, tools for economic decisions and a sizeable footprint on fuel. Because we have access to a worldwide marketplace, we are in a situation where we can market fuel prices."

He says Fuel Stop Analyzer assists a flight department in identifying where the most economic fuel stops can be found along a given route. "It alerts users of the possible required fuel stops and highlights the airports through geographically displayed en-route options," he adds. "The tool compares the fuel prices at each location and tracks airports and locations they utilised in the past. It quickly evaluates a selected aircraft's performance by automatically comparing and calculating the manufacturer fuel endurance and trip leg distance. The result provides an estimate of range limitations and geographical fuel stop locations."

Fowler says the company uses a fuel price comparison web site to ensure its pricing remains competitive. Clients are also encouraged to use the site on their own to map out future trips. Fowler adds: "The company's services function as an extension of a flight department, with the ability to handle all aspects of a corporate flight trip, including weather, over-flight permits, visas and passports, hotel arrangements and fuel."

Marketplace feedback indicates that private aircraft owners and operators increasingly want simplicity and coordination where fuel, flight planning and related services are concerned. Avfuel president Craig Simcock points out that the company has traditionally, in addition to supplying fuel services, assisted clients with trip planning using third party specialists. But this year the company acquired the California-headquartered Pacific Coast Forecasting and added in-house professional trip planning expertise.

Fuel saving

He says Avplan, the company's new flight planning and ground handling service, is a logical extension and streamlining of services. "For more than 35 years we have supplied fuel to the aviation industry," Simcock says, "but our services have always offered more than that. The company has built up a network of more than 600 branded FBOs as well as more than 1,000 contract fuel locations around the world. Additional services provided by Avfuel subsidiaries include fuel storage systems and fuel trucks, insurance and assembly of refuellers and tanks."

Avfuel says pilots require a sophisticated approach when it comes to fuel saving and there is a great deal of interest in contract programmes. "There is no doubt that a coordinated approach to fuel, flight planning and related services helps bring down the cost of operating an aircraft," it adds.

The focus of companies such as Air Routing, Avfuel and Universal reflects the fact that operators know that the best fuel prices can make the difference between a welcome profit and a debilitating loss.

Malcolm Hawkins, president of Colt International, says standard tips include negotiating a good home-based fuel rate, tankering, and taking advantage of fuel discount programmes. But he adds: "I think most modern operators are on top of these issues. However, there are three often overlooked issues where flight departments are losing time and money as well as several techniques that can achieve greater value by plugging gaps." Hawkins warns:

  1. 1. Many flight departments destroy the savings they obtain by spending too much valuable time trying to find the lowest price. Saving €80 on an uplift is irrelevant if it takes four hours to shop and arrange the fuel.
  2. 2. Many flight departments have been convinced that sensible fuel shopping is now so time consuming that it must be outsourced at great expense. Some operators waste thousands of dollars outsourcing a process that shouldn't be so complicated.
  3. 3. Many flight depart-ments do not properly audit their invoices to ensure they are ultimately billed the quoted price. Fuel over-billings are shockingly rampant in the industry. Even if operators catch the overbiller, valuable hours are then wasted correcting the invoice.
Flight departments, Hawkins says, can save money and time by re-evaluating the entire fuel-purchasing process. "For instance, many have discovered that there is no need to shop nine different fuel suppliers. Prices just don't vary drastically between most reputable suppliers. We're seeing a strong trend from our most cost-conscious customers to actually pare down the number of vendors they seek fuel quotes from. Our own research shows that flight departments that shop eight or more fuel suppliers ultimately only use the same two or three companies for more than 97 per cent of their fuel. For most, saving a few cents on the other three per cent isn't worth the time wasted on dealing with non-preferred suppliers.

"Efficient operators are keeping control of their fuel buying process in-house and working only with their two or three most dependable suppliers in an effort to streamline the process while still maximising savings. The key is for a flight department to choose those preferred vendors wisely."

Operators who have been in business for any length of time have undoubtedly seen dozens of fuel suppliers come and go, Hawkins adds. "Even though many flight departments have wised up to the tricks that some suppliers engage in while attempting to win market share, operators are still wasting valuable resources on mismanaged invoices and unreliable fuel quotes."

Flight departments needing to optimise fuel and time savings should demand honest quotes. Hawkins advises: "Don't work with suppliers that provide misleading quotes through the manipulation of expiration dates or the withholding of tax information. Reputable contract fuel suppliers not only quote competitive prices at a multitude of locations, but will also always do it accurately, ensuring that the flight department understands all potential volume price breaks and applicable taxes."

Reputable suppliers, he says, will also have full tax departments that not only stay on top of regulatory issues, but also have experience in exempting and recovering taxes on the operator's behalf.

"Choose suppliers with whom personal relationships can be built. Advanced technology has not replaced the effectiveness of a conversation about creative ways to customise solutions for an individual operator. Building quality relationships offers many advantages that ultimately save time and money."

Hawkins advises: "Ensure that invoices are delivered quickly and that they match the quote. We've audited past invoices for flight departments who were stunned at the amount of money they had wasted on overbillings that failed to match a given quote. Valuable time is wasted when inaccurate invoices must undergo correction and resolution. Be wary of middlemen masquerading as direct suppliers. Make certain that preferred contract fuel vendors are not simply repackaging and marking up another reseller's fuel."

He warns that so-called "fuel management companies" can claim to represent all fuel brokers and resellers but in reality do not have direct relationships with most major fuel companies or even the other major fuel brokers.

Craig Scolding, fuel manager Flightworx, says: "Gone are the days of a pilot turning up at an FBO and asking them which supplier or card they should use. Crews are increasingly investigating fuel prices before they set off on a trip. Many aspects influence what the crew will take but primarily it does seem to be price. However, availability and speed of fuelling can play a huge part: there is no point paying the cheapest price on the field if you have to wait hours for the fuel."

Scolding warns: "Taxes and fees play a huge part in Europe and on many occasions can more than double the actual fuel bill. Fuel strategies need to be sound to avoid large uplifts in some countries. We can offer advice on how to legally avoid the taxes. At Flightworx we offer a fuel shopping service where we look at all the accounts that clients have and advise them who to use at which location. We can then set up the fuel arrangements on their behalf. The advantages are akin to the operator having its own fuel department but for a fraction of the cost.

"Completely independent from the shopping service we offer a fuel reselling system for our existing and any new clients that wish to take advantage of our impartial prices."

As Global Fuel's Iceland-based ceo Guofinna Saevarsdottir says, saving on fuel outlay has become increasingly important especially in the last two years as the international economic downturn focused the minds of the owners and the operators on cost-cutting.

"During boom times it was not the first priority to study fuel prices, especially when the passengers needed to get from A to B as quickly as possible at very short notice," Saevarsdottir adds. "There is plenty of work to plan everything else, such as slots, flight plans, over flight permits and crew."

But priorities have changed. Global Fuel, Saevarsdottir points out, was founded in 2006 when operators were experiencing growing frustration at paying high fuel prices. "There was a demand in the market for a company that concentrated solely on the fuel."

Global Fuel says it approaches all the fuel suppliers and the fuel resellers to guarantee the best price.

"This is however not always so straightforward," says Saevarsdottir. "Each country is different and each airport is different. You need to know who are the suppliers at each airport to know who to approach and what contracts to have. There might be only one supplier and there might be many with a price difference of up to 100 per cent or more! You need to train and inform your crew well so they don't make expensive mistakes by ordering the wrong truck or presenting the wrong card." Global Fuel, Saevarsdottir says, has devised a system where each operator regularly gets a list of which fuelling method is recommended for each airport.

Saevarsdottir adds: "Then there are tax issues. These have become very complicated, especially in Europe. The basic rule is that AOC holders are exempt from most of these taxes and private operated aircraft are not. There are more complications as at some places it depends on who you buy from and where the aircraft is registered: some countries issue a tax exempt document for privately operated aircraft if it is commercially operated by the owner for his own business. Even the size of the aircraft can be a factor. Global Fuel has experts to minimise the cost for its customers."

Valur Blomsterberg, operations manager of Global Fuel, warns: "With these factors taken into account the seemingly 'cheapest price' is in fact not always the cheapest as there are many factors that influence where it is best to fuel each time. These factors include the study of a pool of prices from many suppliers, the tax implications and the type of operation the aircraft is being used for."

Arinc Direct's James Hardie confirms that the basic strategy to save on fuel must include steps to ensure the operator gets the flight plan right and keeps it up-to-date. "Fuel planning is absolutely critical: owners and operators are well aware that the cost of carrying more fuel than needed for the flight can be counter-productive or absolutely essential depending on the circumstances."

Hardie adds: "Arinc Direct's emphasis is on providing accessible and vital information during the planning process that allows operational decisions to be made quickly and easily with a high degree of confidence to meet the needs of the mission at hand."

A flight plan is really a fuel plan and questions the operator should ask should cover airports, routing, slots and continuous planning and communications.

Airports: What are the alternatives for arrival at a city and what are the costs for fuel and other services at those alternates? How does runway analysis affect the trip's MTOW and subsequent legs? Will you now need to make another fuel stop en route or can you plan around that? Opening times and slot frequency for business jets are all important considerations that may affect fuel planning and weight. Routing: What is the optimised routing for forecast winds, available flight levels and STARS and how can this information be used to save time and fuel? How can RVSM maximise the number of flight levels close to or at the optimum available for the aircraft?

Slots: Is there access to EDCT or CTOT information that can help ensure the aircraft is started at an appropriate time and may allow for alternate route plans to avoid en route ATC delays? What is the cost of accepting an extended routing and how will delays impact on the flight?

Continuous planning and communications: What is the best use of Datalink to provide a means of point to point communication? This can be critical in ensuring the flight plan is still valid. Access to DATIS and other information in-flight can enable an early money saving decision.

While the client makes the final decision on the destination and departure airports, the astute operator will know alternatives to congested airports and difficult entry points and avoid them wherever possible. It can take several hours for European and Middle Eastern operators to obtain clearance at some of the larger US airports.

It is often the smaller airports that are hungry for business which might, instead, ensure procedures are carried out quickly by, for instance, conducting the formalities on board the aircraft so that passengers are not required to disembark.

Broader choice

Private aircraft operators, and brokers who refer business to them, tend to dislike having to deal with fuel suppliers that have a monopoly at particular locations. However, the introduction of new providers tends to be welcomed even at airports where there is an existing choice because additional competition tends to be good for the end user.

For example, Shell Aviation has signed a concession agreement to operate as a fuel supplier at Denmark's Roskilde Airport which should result in increased competition in 2011. Sjoerd Post, vp Shell Aviation, says: "The agreement will increase supply security and competitiveness at the airport."

He adds: "We aim to target not only the business segment but also small aircraft customers requiring Avgas. This is an exciting time to be joining forces with the airport and we believe our entry will enhance RKE's refuelling capabilities by providing more competitive fuel prices." Shell Aviation aims to complete construction works and be supplying fuel from Roskilde by the end of the year.

Software and online developments

Fuel is a big unavoidable cost and concern and aircraft owners and operators tend to be busy people with a finite amount of time to examine all the alternatives on the market but there are web sites and software that can help. There is increasing collaboration between different specialists. Versitec 2000 Ltd, the company behind Skynet Online Handling, a web-hosted trip quote and management service, has teamed up with CrimsonSky Consultancy Ltd which focuses on aviation procurement and supply chain management. Skynet is providing a platform for CrimsonSky to extend its fuel service Jet-a-One.com to general aviation.

Kevin Stovey, md CrimsonSky, says: "This service brings together the fuel volumes of club participants to give each member buying power that it cannot achieve on its own. FBOs, operators, smaller airlines, regional airports and flight support businesses will be able to compete on more preferential terms via the support of a collective buying scheme and benefit from more dynamic pricing."

Tim Gill, md Versitec, says: "The plan is to introduce a jet fuel card and multi-leg fuel profiling system as well."

Some companies appeal to the environmentally-conscious. The Navtech Flight Plan, which is designed to appeal to operators who want to minimise fuel burn, cites the NFP algorithm which is combined with route optimisation and an always current wind forecast. Product director for flight planning Bill Macey says: "Our flight plan helps our clients leave a greener footprint. We make parameters available for least cost, least time and least fuel." Calculations are extensive and even factor in the aircraft type. "There is a great sense of fulfillment in helping our customers maximise efficiency and reduce costs and enabling them to manage the fuel price for their departure and destination airports. Optimum tankering needs to be based on the most efficient amount of fuel to carry, the cost, route, winds and flight level for a given flight," Macey adds.

It is certainly true that pilots, dispatchers and flight schedulers can get more detailed information on airport fuel prices than ever before. Max-Trax, a fuel-route-mapping application powered by GlobalAir.com, has enlarged its list of the "most affordable" fuel locations at airports in the United States - an important long haul market for European and Middle Eastern private charter operators - through an agreement with Landmark Aviation. Jeff Carrithers, president, says: "Aviators will now get more detailed information on FBOs from Rhode Island to California. Some 2,200 FBOs are listed. The application details, within a mileage range set by the user, which FBOs are offering the least expensive fuel rates for the chosen route."

Richard Hayden of AFIRS says its automated flight information reporting system enables an operator to adopt and continuously monitor flying and aircraft handling techniques that reduce fuel burn and emissions. He adds: "The system has been certified on numerous aircraft types, including the Hawker 800XP series, and we have very successful trials ongoing with a large European business aviation fleet operator. Additional certifications are under way for Falcon and Embraer types."

FuelerLinx says it is committed to increasing both 91 and 135 operator savings on jet fuel. "The fuel management software allows the comparison of contract fuel prices and direct FBO prices at any quantity, at any airport worldwide and automatically shows the lowest priced fuel at each destination. It also dispatches a fuel release, tracks fuelling and reconciles fuel billing to ensure the price quoted matches the invoice," the company says.

Longer haul operators in Europe and the Middle East can, FuelerLinx says, make substantial savings in the important US market. "According to NBAA, one should compare at least six contract fuel vendors since the delta between fuel vendors averages 40 cents at the same FBO."

The company adds: "Generally speaking 20 per cent of all fuel bills are billed incorrectly. Owners and operators need a system that flags overcharging. Sometimes operators take on more fuel than initially requested and need to know whether this brings an entitlement to volume discount."

Design and fuel saving upgrades

Aircraft owners and operators not only need to ensure at purchase that their chosen aircraft is designed to maximise fuel efficiency but also make it a priority to keep up-to-date with upgrades. The key is to be able to ascertain whether the investment in an upgrade will bring sufficient benefits and financial returns. Such benefits include reducing stopovers by extending range and lowering fuel burn. Upgrades might also facilitate more accurate approaches.

Hawker Beechcraft Services (HBS) says it has had a good response to its Wide Area Augmentation System (WAAS) upgrades on the Rockwell Collins Pro Line 21-equipped King Air 200/300. HBS says that the effects are similar to the previous C90GTi WAAS installation.

"The WAAS upgrade offers operational flexibility and cost savings associated with direct and curved area navigation (RNAV) routes: it enables improved access to special use airspace, high traffic and airports with difficult terrains," HBS says.

The upgrade uses WAAS enabled localised performance with vertical guidance (LPV) approaches. "There are currently more than 1,900 LPV approaches certified and in use today. WAAS LPV approaches provide decision heights as low as 200 feet with one half mile visibility. The result is improved safety and cost savings associated with the reduction of missed approaches and flights to alternate airports."

WAAS upgrades for the Premier IA and Hawker 400XP and Beechjet 400A are expected to be available by the third quarter of this year.

Dave Marone of BLR Aerospace LLC says few twin turboprops can match the King Air. But he adds: "Because King Airs are usually powered by two fuel-thirsty Pratt and Whitney PT6A turboprop engines today's cost-conscious operators are actively seeking ways to trim fuel expense."

Marone adds: "Winglet systems developed by BLR Aerospace are delivering an array of important benefits to King Air operators, including significant fuel savings. Depending on flight profile, these savings can range from five to 15 per cent in climb and two to four per cent in cruise for composite savings of three to five per cent."

BLR manufactures and distributes winglet systems for King Air 90s, 200s, and 300s. "In addition, BLR winglets are now standard on all newly manufactured King Air 90 GTx models," Marone says. "Winglet-equipped King Airs experience reduced drag that translates into measurably better fuel economy, as well as other performance improvements such as increased climb and cruise speeds, more responsive aerodynamic perfor-mance and stability, and safer low-speed handling qualities, especially during takeoffs and landings in short field operations."

He says winglets deliver a 100 per cent return on investment, according to data published in the Aircraft Blue Book.

Marone says: "The system utilises an aluminum wing tip manufactured to accept a carbon fibre winglet containing built-in position, recognition and strobe lighting. The system increases wingspan by three feet five inches as well as wing aspect ratio, lowering induced drag. Reduced drag makes for faster flying and less fuel consumption. Winglets also act as a physical pressure barrier, which conserves valuable lift at the outboard extremities of the wing."

Blackhawk Modifications says that a coming upgrade of the Cessna Caravan with the Pratt & Whitney PT6-42A, which is going through the final approval processes, will result in a number of fuel and operational efficiencies. The company believes the upgrade will result in benefits including significant decreases in take-off distance and fuel burn but an increase in payload capability.

Acceptable limits

Capt Ivan Klugman of Integral Aviation Solutions Inc points out that fuel is now costing corporate operators more than six dollars a gallon rather than the 50 cents that they once enjoyed. "We are taking extreme measures to conserve every drop. Fuel conservation can save money, our jobs and the environment."

He says Integral Aviation Solutions spends a great deal of time working on vip aircraft interiors and aircraft conversions for airframe manufacturers, corporations, royalty, heads of state "and even a celebrity billionaire."

Klugman says: "Obviously weight is an important item in fuel savings. There needs to be a survey of the weight and balance data of possible acquisitions to check if it is within acceptable limits. Some conversions can be completed in such a way that the useful load is unacceptable."

The positioning of facilities and the materials used, he points out, are critical. "One of the most dramatic fuel savings can be achieved by the installation of blended winglets. Fuel saving can be between six and eight per cent depending on aircraft type and length of trip."

He adds: "General maintenance items on an aircraft can also save fuel. For instance it is important to ensure that there are no small bleed air or pressurisation leaks. Control and flap rigging are also important. With little extra time and care many gallons of fuel can be saved."

Autothrottles, he says, should be ordered whenever available: "They enhance safety, reduce pilot fatigue and save fuel. Fuel savings can be from one to two per cent."

"With a small investment in some aircraft modification and crew training an operator can easily save about 10 per cent of their annual fuel budget," Klugman concludes.

Andre D Sterchi of Aster Jet Fuel warns that the lowest fuel prices do not always give the cheapest net price as VAT, Mineral Oil Tax and other fees have to be factored in. He advises: "Always request fuel prices for each flight. Suppliers will not necessarily change their price for individual flights but resellers will - depending on the aircraft, location and route."

Questions to ask include: What is the administration cost per fuel invoice? How long does it take to verify price and other details? If the invoice is wrong, how long does it take for a reaction and correction? Are invoices detailed or just 'one liners'? Do resellers/suppliers offer aviation credit cards and how is card recognition carried out?

Reducing overheads

To achieve fuel efficiency aircraft owners and operators must keep up-to-date with a host of developments ranging from web sites to aircraft upgrades. The question for each operator is how best to contain and reduce an overhead that cannot be avoided. Larger operators might elect to employ their own flight planning department but for smaller operators the key is likely to be delegation or a focus on ensuring major rather than minor savings.

All operators, however, will want to employ a system which keeps abreast of developments and incorporates any new cost-saving methods and ideas. Market intelligence may be the key to keeping fuel costs down to a level where profitable business is possible. An operator's cost-cutting strategy will only ever be as good as its research and the expertise it can call upon.

Steps that systematically cut spending

Private aircraft operators and owners may have to suffer the cost consequences of rises in crude oil prices but, with reasonable planning, fuel costs can be anticipated and minimised.

  • Monitor market intelligence and compile and update contacts and information ranging from new web sites and online systems to competition-enhancing new suppliers at airports
  • Systematically record and update this fuel cost saving information with a particular emphasis on routes and destinations favoured by clients
  • Analyse the potential benefits of collective purchase schemes and fuel cards
  • Investigate the most tax efficient way to order fuel to minimise or eliminate sales tax liabilities
  • Check and enhance the provision of onboard fuel saving arrangements such as integral software at the time of aircraft purchase
  • Examine the potential benefits of fuel saving upgrades
  • Work on administration and research and accounting efficiency, not only to compare prices but to ensure that volume discounts are incorporated in charges and that overbilling is eliminated
  • Be familiar with fuel saving through sympathetic maintenance checks and procedures
  • Try and avoid congested airports in favour of less busy alternatives
  • Be wary of middlemen masquerading as direct suppliers
  • Avoid suppliers whose overbilling causes losses and lengthy administration time spent in achieving corrections
  • Build productive relationships with a few good suppliers rather than waste time unproductively attempting to keep up with the whole marketplace

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