Originally created 05/29/03

Airports trim fuel prices



Augusta Regional Airport has a problem, and it's called competition.

The competing players are Aiken Municipal and Thomson-McDuffie Regional airports. The name of the game is cheap fuel.

"Our fuel-discount program hasn't been aggressive enough," said Ken Kraemer, the director of Augusta Regional, noting that corporate aircraft tenants at Augusta Regional have been "enticed" lately with a reduced-cost fuel program by neighboring airports.

Some Augusta tenants, including Club Car and Hull Storey Development, have already started "tanking fuel" from other area airports, Mr. Kraemer said. Still, Augusta Regional officials say they now have a game plan to keep their tenants happy and to attract new customers.

"We feel a 50-cent discount (per gallon) is needed to stay competitive," Mr. Kramer suggested recently to the Augusta Aviation Commission's finance subcommittee.

The proposal, which would require corporations to sign a year's tenant lease to obtain the reduced fuel rate, has been forwarded to the full commission for approval at its meeting today.

Currently, the fuel-discount program at Augusta Regional is based on volume, with its highest discount at 30 cents per gallon.

Beth North, the manager of Aiken Municipal, said her fuel prices are determined on a case by case basis, but added that she last surveyed her prices to be 20 cents less per gallon overall than Augusta Regional. Still, she said Aiken isn't targeting Augusta tenants.

"This is not a cutthroat situation," she said.

But Ms. North said fuel sales are "our main income," noting that "the rents and all that just wouldn't pay the bills." Thomson airport officials say the same is true for them.

So what would happen to the Aiken and Thomson airports' customer base if Augusta Regional begins competing with a 50-cent discount?

"Only time will tell," Ms. North said.

Rick Holton, the manager of Thomson-McDuffie Regional, said base tenants there receive a 50-cent discount on fuel. But he said his airport will soon implement a new tool - the self-serve dispenser, which would offer a 50-cent discount per gallon to tenants and others. Currently, he said, jet fuel costs about $2.95 a gallon before discounts.

The self-serve pump, which would lower costs because of the cut in labor costs, should be available Friday, Mr. Holton said.

Without it, though, he feels his airport would stay competitive because "people coming in running low on fuel, they can come in here quick and get out quick."

Mr. Holton said he has no problem with Augusta's new proposed discount.

"Actually, a little competition is good for everybody," he said.

Mr. Kraemer said Augusta tenants have said that if Augusta Regional offered a 50-cent discount, "they would buy the majority of their fuel from us. We wouldn't make as much (per gallon), but we are confident we would sell more fuel."

The proposed discount would save corporations based at Augusta Regional $25,481 this year, according to an airport report.

So far, though, jet fuel sales at Augusta Regional have declined by 850 gallons in the first four months of this year compared with the same period last year. Club Car's fuel purchases through April have been down the most, 2,496 gallons, with Hull Storey in second, down 344 gallons.

The airport's other two major tenants, Morris Communications Co., the parent company of The Augusta Chronicle, and Electrolux, have increased jet fuel purchases by 89 and 2,102 gallons, respectively.

Augusta Regional officials say the biggest concern is attracting new tenants.

The proposed fuel discount "may attract some new customers to base their aircraft here," Mr. Kraemer said.

Because tenants pay a city fee to base their planes in Richmond County, Augusta would lose out if corporations turn to other airports.

"The community would lose as well because of those ad valorem taxes paid to Augusta-Richmond County," Mr. Kraemer said.

Reach Preston Sparks at (706) 828-3904 or preston.sparks@augustachronicle.com.