Airport considers fuel pricing policy changes

Sep. 18, 2013 @ 10:00 AM

The Rutherford County Airport Authority is looking into changing its fuel pricing policy.

During its regular meeting Tuesday, the board considered a different method to providing incentive to purchasers of fuel in mass quantity.

The airport allows aircraft owners based at Marchman Field to pre-purchase fuel at the price established at the time of purchase. The fuel can be dispensed at anytime.

“If someone wanted to pre-purchase 5,000 gallons of fuel, they would write a check for the rate. But, if the price of fuel went up, we could actually lose money,” said Carl Classen, Rutherford County manager.

However, there was the risk of allowing the pre-purchase of mass fuel quantities at one rate, the price going up and the county losing money on the sale of fuel.

A proposal being studied will remove the ability to pre-purchase and allow a rebate on fuel purchases by those based at the airport.

The rebate would be on a cents-per-gallon for Jet A fuel. Additionally, the airport will monitor the wholesale price of Jet A and 100LL fuel weekly and adjust the sale price to “remain competitive on retail pricing while maintaining a margin to positive cash flow to help cover costs.”

Over the last fiscal year, the airport generated over $71,000 in overall fuel sales and had over $300,000 in sales in the month of July.

According to Airport Manager Chris Roach, there are six aircraft on the field that qualify for the rebate program.

“I have talked to a few of them and they are interested,” Roach said.

Under the program, rebates would be paid in June and December. Classen said June was selected because it marks the end of the county’s fiscal year and December because of property taxes coming due.

The rebate structure is 20 cents per gallon for up to 3,000 gallons, 40 cents for 3,001 to 6,000 gallons, 60 cents for 6,001 to 12,000 gallons and 80 cents on more than 12,000 gallons purchased.

“It still gives the heavy users a benefit,” Classen said.

He added the policy would take effect Dec. 1 and any fuel purchased and not used prior to Nov. 30 would be rebated.

The Authority elected to table the implementation of the new policy until its October meeting to allow other airplane owners to be contacted for feedback.

In other business, the Authority:

• discussed future airport improvements;

• approved a hanger transfer between Tevis and KCH contingent on review of the transfer;

• discussed a drainage issue related to property adjacent to the airport.