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Midcoast changing fuel providers

Airport sees fuel says as revenue source

POSTED: September 1, 2011 8:30 a.m.

With lower prices in mind, members of the MidCoast Regional Airport’s local Joint Management Board voted Tuesday to change fuel providers.
The move from Air BP to independent supplier Avfuel should reduce fuel costs by about 25 cents per gallon for jet fuel and aviation gasoline, or avgas, LCDA Administration and Finance Director Carmen Cole said in the meeting.
Fuel sales are a major source of revenue for the airport, which is managed on the civilian side by the Liberty County Development Authority, the county and the city of Hinesville. Much of the airport’s revenue also comes from the $109,305 from the military lease on half of the property, $58,320 in hangar leases and $36,462 from each of the three governing entities.
Last year, the airport sold 20,855 gallons of aviation gas and 23,579 in jet fuel, according to trend reports. The airport’s 2012 budget anticipates $237,000 in revenue from fuel sales, with $105,000 from aviation gas and $132,000 in jet fuel.
The change comes after June reports from Michael A. Hodges, president of the airport’s fixed-base operator company ABS Aviation Management Services, that current provider Air BP’s prices were 30-60 cents higher per gallon than prices from some other fuel providers.
Since then, the board has received proposals from two companies, the Michigan-based Avfuel and Perry Brothers Aviation Fuels, a Georgia company that serves at least 12 airports in the state.
During the meeting Tuesday, voting members Commission Chairman John McIver, Hinesville Mayor Jim Thomas and LCDA Chairman Allen Brown compared the prices and services of both companies with input from County Administrator Joey Brown, Hinesville City Manager Billy Edwards and LCDA staff.
Ron Tolley, executive director of the LCDA, told the board that each company received favorable reviews from other airport leaders he spoke with.
Due to market fluctuations in fuel prices, members agreed not to decide based on fuel estimates alone. Other factors include a monthly point-of-sale machine rental, which will run $35 a month through Avfuel, and leases for the fuel trucks likely to be $625 and $700 per month.
While Perry Brothers offered lower fuel prices, the board accepted the bid from Avfuel because it is more widely known — with more than 600 dealers and 2,500 customers — and has greater potential to offer marketing and industry recognition.
Avfuel also offered more contract flexibility, with a three-year option, while Perry Brothers called for a five-year commitment, though both offered a termination clause.
MCRA has purchased fuel from Air BP since its November 2007 opening, Cole said. The current fuel agreement does not have an end date because lawyers on behalf of both organizations never came to a contract agreement.
The board stipulated that Avfuel should provide monthly reports of its marketing efforts for the sake of evaluation and that Kelly Davis, the airport’s attorney, will review the contract before solidifying the agreement.
In other airport news, the Georgia Department of Transportation approved a pre-application for $301,815 in Federal Aviation Administration entitlement funds to go toward the airport’s future runway extension project, Joey Brown said. The money comes with the stipulation that the project must be contracted during the 2012 fiscal year.

 

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