Aviation fuel uplifts and planning for them are day-to-day activities for flight departments, pilots, and schedulers and dispatchers. It’s important to be aware of the finer points involved with this process, including important terms. Aviation fuel prices may vary depending upon your chosen method of fuel delivery and payment. Meanwhile, fuel uplift documentation requirements and credit options often differ from airport to airport. There are also regional language differences to be aware of. In the UK, for example, you may hear the term “bowser” – which means the same as fuel truck – while a hydrant fuel position may be referred to as a “pod.”
1. Know Common Aviation Fuel Terminology
- Aviation Fuel Card Program
- Aviation fuel card programs vary greatly, but the common value among them is the offering of consistent, reliable vendor services and reduced pricing over standard, posted fuel prices through a pre-negotiated supplier network (e.g., fixed base operators [FBOs] and other fuel suppliers).
- Aviation Fuel Card
- Card issued by an aviation fuel program, presented by the cardholder at the point-of-sale to the fuel agent. Some cards are used to make payment, while others are just used to claim a price reduction, or confirm fuel program membership, depending on the program.
- Contract Fuel Program
- Quality fuel pricing programs to help aircraft operators reduce operating costs, mostly utilized when traveling away from home base. Contract fuel programs offer lower than retail fuel pricing to the operator, as well as value back to the participating member FBO or ground handler, through marketing and services communicated to an expanded member customer base that participates in such programs.
- Fuel Agent
- A fuel supplier employee that provides/supervises fueling services to customers’ aircraft
- Fuel Arrangements
- Also known as Fuel Coordination, Fuel Setup, or Fuel Service Request; Fuel Services are set up and coordinated by fuel reseller office personnel on behalf of a client.
- Fuel Authorization
- Permission given by an operator to arrange fuel on their behalf.
- Fuel Estimate
- The calculated approximation of the fuel prices for a location, supplier, and gallon quantity which is usable even if input data may be incomplete or uncertain. An estimate is a close approximation of the actual, but is not intended to be used for invoicing.
- Fuel Farm
- A location where aviation fuel is stored prior to being discharged into aircraft fuel tanks. A tanker or hydrant system transports the aviation fuel from the depot to the aircraft.
- Fuel Fees
- Fixed costs charged by a supplier, airport authorities, or governing entity.
- Fuel Hydrant
- Aircraft refuelers can be either a self-contained fuel truck, or a hydrant truck or cart. A hydrant system may be available at some airports where the aircraft hooks directly into a central pipeline network that provides fuel to the aircraft. There is a significant advantage with hydrant systems when compared to fuel trucks, as fuel trucks must be periodically replenished and hydrant fuel is known to be cheaper. However, wait time to fuel the aircraft is generally much greater and increases risks of towing and repositioning of the aircraft to obtain less expensive fuel.
- Fuel Quote
- A contractual agreement between fuel reseller and the client. It is the anticipated value of the fuel prices, including taxes and fees, for a location, supplier, and gallon quantity, but may vary depending on the fuel reseller. A quote is intended to be used for invoicing or billing.
- Fuel Release
- After a client requests an estimate, they may accept the proposal and authorize the fuel reseller to arrange for fuel on their behalf. A Fuel Release may be a one-time authorization or evergreen authorization.
- Fuel Service Request
- An e-mail sent by a fuel reseller specifying the details of the need to provide fuel for a client at a specific location and time. In effect, a Fuel Release is like a Purchase Order sent to the supplier requesting fuel arrangements. Unlike a PO, the Fuel Request does not include pricing or specific gallons. The Fuel Release is typically not recorded on the supplier invoice.
- Fuel Taxes
- Variable costs assessed by a government entity. The tax may be indirect, where the supplier pays the tax and invoices the fuel reseller or direct where fuel reseller pays the tax directly to the government.
- Fuel Truck
- Self-contained vehicles, typically containing up to 10,000 U.S. gallons of fuel that have their own pumps, filters, hoses, and other equipment
- International Air Transport Association, an international trade organization representing the airline industry. It has developed commercial standards for fuel invoicing, among others, to simplify the process for efficiency. The IATA airport code uses a 3-letter code designating each airport around the world based on phonics. (For example, Charles de Gaulle’s IATA Code is CDG.)
- International Civil Aviation Organization, an agency of the United Nations, codifies the principles and techniques of international air navigation. The ICAO airport code uses a 4-letter code designating each airport around the world based on location. (For example, Charles de Gaulle’s ICAO Code LFPG.)
- Off-Specification Fuel
- Fuel that is found not to be in accordance with the relevant quality specifications set forth in the agreements.
- Overwing Fueling
- Overwing fueling also known as a gravity fuel port is used on many different aircraft types. Overwing fuelling is similar to car fuelling — one or more fuel ports are opened, and fuel is pumped in with a conventional pump.
- The term pre-paid may refer to both taxes and credits. There are vendors where the fuel reseller does not have established credit; therefore, the vendor requires estimated charges be pre-paid prior to uplift. Pre-paid may also refer to taxes, where the expectation is that a supplier must pre-pay the taxes to the jurisdiction authorities upon fuel delivery rather than on a periodic basis.
- A fuel shortage may occur because a seller does not have sufficient fuel to meet the requirements of all its customers. An allocation may be used by the seller to meet demand.
- Single-Point Fueling
- Single-point fueling is used on some aircraft types and for jet fuel exclusively. For single-point fuelling, a high-pressure hose is attached and fuel is pumped in at min. 40 PSI and a max. of 45 PSI.
- When fuel prices differ between airports, it might be worth putting in more fuel where it is cheap, even taking into account the cost of extra trip fuel needed to carry the extra weight. A flight planning system can work out how much extra fuel can profitably be carried. Note that discontinuities due to changes in flight levels can mean that a difference of as little as 100 kg (one passenger with luggage) in zero fuel weight or tankering fuel can make the difference between profit and loss.
2. Aviation fuel types vary, so it’s important to know what will and will not work for your particular aircraft
- A high-octane fuel used for aircraft and racing cars. The term Avgas is a portmanteau for aviation gasoline, as distinguished from mogas (motor gasoline), which is the everyday petroleum spirit used in cars. Avgas is typically used in aircraft that use reciprocating engines. Avgas is treated with blue dye, and is dispensed from nozzles with a diameter of 40 millimeters (49 millimeters in the USA). The aperture on fuel tanks of piston-engine aircraft cannot be greater than 60 millimeters in diameter.
- Aviation Biofuel
- Aviation biofuel is used for aircraft. The International Air Transport Association (IATA) supports research, development, and deployment of algae fuels. IATA’s goal is for its members to be using 10% alternative fuels by 2017.
- Jet A
- A fuel based on unleaded paraffin oil (Jet A-1). It is similar to diesel fuel, and can be used in either compression ignition engines or turbine engines. Jet Fuel is clear to straw in color and is normally used in the U.S.
- Jet A-1
- A kerosene grade of jet fuel, widely available worldwide, with the exception of a few countries that utilize other types of fuel such as TS-1 or JP-8. Jet A-1 is suitable for most turbine-engine aircraft, has the same flash point minimum as Jet A (38°C), but a freeze point maximum of -47°C.
- Jet B
- A jet fuel in the naphtha-kerosene region that is used for its enhanced cold-weather performance. However, Jet B’s lighter composition makes it more dangerous to handle. For this reason it is rarely used, except in very cold climates. It is similar to diesel fuel, has a clear to straw color, and can be used in either compression ignition engines or turbine engines.
- A kerosene-based jet fuel that has slightly higher volatility (flash point is 28°C minimum) and a lower freeze point (<-50°C) than Jet A-1. TS-1 is the most common jet fuel grade available in the Russian and CIS states.
- A kerosene-based jet fuel specified and used widely by the U.S. military. It is similar to commercial and business aviation’s Jet-A. It was first introduced at NATO bases in 1978, and its NATO code is F-34. JP-8 is specified by MIL-DTL-83133 and British Defense Standard 91-87. It is projected that JP-8 will remain in use until at least 2025.
3. Certain aviation fuel additives may not always be available at international locations
- The air inside your fuel tanks contains moisture. This moisture has the potential to turn to ice during flight operation or even on the ground. An anti-icing additive helps eliminate this problem and gives added security in case of fuel heater system breakdown.
- The formation of water inside a tank creates an environment that allows the growth of bacteria and fungi. Left unchecked, this growth can pose a serious danger to aircraft and passengers. An active biocide/fungicide additive is designed to prevent such growth and dangers occurring. This feature is particularly valuable for aircraft operating in humid conditions.
4. Understanding local aviation fuel taxes gives you options in terms of minimizing or reclaiming these costs while remaining in compliance with local regulations
- City Tax
- A Sales or Excise Tax where the jurisdiction is the city.
- County Tax
- A Sales Tax where the jurisdiction is the county or province.
- Diesel Motor Tax
- See Motor Fuel Tax.
- The European Union value added tax (“EU VAT”) is a tax encompassing member states in the European Union VAT Area. Joining in this is compulsory for member states of the European Union. As a consumption tax, the EU VAT taxes the consumption of goods and services in the EU VAT area . The EU VAT’s key issue asks where the supply and consumption occurs, thereby determining which member state will collect the VAT and what rate will be charged. We previously discussed EU VAT Exemptions on Jet Fuel and VAT Recovery.
- Federal Excise Taxes (or Excise Duty)
- Also known as Mineral Oil Tax (MOT) and TIPP, these are taxes/duties charged in a number of EU member states, as well as by other non-EU member states, on all non-commercial (for reward) flights. The charges range from 1.30 to 3.50 USD per USG and are VAT chargeable for all operators who are not exempt from VAT. We previously discussed MOT Exemptions on Jet Fuel and VAT Recovery.
- The GST is a Goods and Services Tax, similar to the Value Added Tax. We previously discussed GST Recovery.
- Harmonized Sales Tax or blended combination of the PST and GST is a Canadian tax similar to the Value Added Tax. We previously discussed HST Recovery.
- Provincial Sales Taxes (PST), levied by the Canadian provinces, are similar to the Value Added Tax.
- Motor Fuel Tax
- (Also known as a petrol, mineral oil, gasoline or gas tax, or as a fuel duty.) An excise tax imposed on the sale of fuel. In most countries, the fuel tax is imposed on fuels which are intended for transportation. Fuels used to power agricultural vehicles, and/or home heating oil, which is similar to diesel, are taxed at a different, usually lower, rate. In the United States, the fuel tax receipts are often dedicated or hypothecated to transportation projects so that the fuel tax is considered by many a user fee. In other countries, the fuel tax is a source of general revenue.
- Pollutant Tax
- Also known as an Ecotax (short for Ecological taxation). An Ecotax refers to taxes intended to promote ecologically sustainable activities via economic incentives. Such a policy can complement or avert the need for regulatory (command and control) approaches. Often, an Ecotax policy proposal will attempt to maintain overall tax revenue by proportionately reducing other taxes (e.g. taxes on human labor and renewable resources); such proposals are known as a green tax shift towards ecological taxation.
- Taxes that must be prepaid at the time of delivery rather than on a periodic basis.
- Sales Tax
- A consumption tax charged at the point of purchase for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale. A portion of the sale may be exempt from the calculation of tax, because sales tax laws usually contain a list of exemptions. Laws governing the tax may require it to be included in the price (tax-inclusive) or added to the price at the point of sale.
5. Know what fuel fees you’ll be subject to at given locations
- Airport Fees
- Fees paid to the airport for use.
- Airport Hydrant Fees
- Fees paid to take fuel from the hydrant rather than a truck. Requires aircraft to reposition and increases on ground complexities; such risk may require additional fees for aircraft to be towed to hydrant.
- Cleanup Fees
- Fees charged to aviation to cover the airport’s portion of the cleanup from ground contamination. Fees are typically fixed.
- Defueling Fees
- Fees charged to remove fuel from an aircraft.
- Environment Fees
- Fees established to partially fund compliance programs that improve air quality, reduce storm water pollution, and ensure compliance with other public health related programs. Fees are typically fixed.
- Inspection Fees
- Fixed fees paid for certifications of specific requirements.
- Into Plane Fees
- Fixed fees paid to the supplier to load fuel into an aircraft.
- Oil Spill Fees
- See Cleanup Fees.
- Overtime (Out of Shift) Fees
- Fees paid due to the time of the fueling.
- Storage Fees
- A storage fee provides revenues for programs designed to expedite the cleanup of leaking underground petroleum storage tanks. The fee applies to certain petroleum products placed into underground storage tanks, including aviation fuel. The fee is based on a rate per gallon.
Aviation fuel types and availability of fuel additives vary across the globe. It’s best practice to know the terms and their corresponding definitions to avoid confusion. Operators are subject to a whole range of fuel uplift and delivery fees when re-fueling at the home base and within the international arena. Best practice is to know what these fees are in advance. Meanwhile, be prepared for an assortment of potential fuel taxes that can go hand-in-hand with the fuel uplift process. Some of these taxes can be exempted at the pump under certain conditions, while others may be reclaimed later. Take the time to understand aviation fuel terminology before you go and consult your 3rd-party provider for any questions or requests you have.
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Next week, we will cover Aviation Fuel Terms Used during a Business Aviation Trip.
Category : Best Practice
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