Fuel is usually an FBO's largest source of revenue, and pilots compare prices more than almost anything else. Two FBOs a few miles apart can post prices that differ by dollars per gallon. Here's what goes into that number and how FBOs set it.

What a gallon costs the FBO

Product cost

The price the FBO pays its fuel supplier, usually tied to a market index and updated frequently. FBOs affiliated with a fuel brand buy through that brand's supply network; independents may buy from distributors.

Freight

Getting fuel from the terminal to the airport. Airports far from a supply terminal pay more, which is one reason remote airports often have higher prices.

Taxes

Federal excise tax applies to aviation gasoline and jet fuel, at different rates depending on the fuel and the type of operation, plus state and sometimes local fuel taxes. Taxes can be a significant share of the final price and vary from state to state.

Flowage fees

Many airport sponsors charge FBOs a fuel flowage fee per gallon sold, as part of their lease. It's one way airports fund operations.

Operating costs

Fuel trucks and their maintenance, the fuel farm, quality control testing, line staff, training, insurance and the building. Much of this is fixed, so it's spread across every gallon sold.

Setting the price

Margin per gallon

The simplest model: cost plus a margin. FBOs set a target margin per gallon, often different for avgas and jet fuel, and adjust as cost changes.

Posted (retail) price

The price advertised for walk-in customers. It's what most piston pilots pay and what shows up on fuel price apps and websites.

Contract fuel and discounts

Larger customers rarely pay the posted price:

  • Contract fuel sold through fuel card and contract fuel programs at pre-negotiated prices.
  • Volume discounts for operators that buy large quantities.
  • Based-tenant pricing for aircraft hangared on the field.
  • Waived or reduced fees (handling or facility fees) when a minimum quantity of fuel is purchased.

Self-serve vs full-service

A self-serve pump usually sells for less than full-service, because it needs no truck or line staff. Many FBOs run both: self-serve for piston aircraft that want the lowest price, full-service for jets and anyone who wants to stay in the lounge.

Pricing strategies that work

  • Know your competition. Pilots check prices at nearby airports before they decide where to stop.
  • Be transparent. Post prices online and keep them current; pilots avoid airports where the price is a surprise.
  • Price the whole visit. Ramp, handling and overnight fees affect where pilots stop just as much as fuel. Clear rules about when fees are waived win repeat customers.
  • Make it easy to order ahead. Pilots who can order fuel and services before they arrive are more likely to choose your FBO, and you can plan your line staff around them.
  • Watch your margin, not just the price. A price war on fuel only works if volume rises enough to cover the lower margin.

Frequently asked questions

Why is fuel so much more expensive at some airports?

Fuel prices depend on supplier cost, freight distance, state and local taxes, airport flowage fees, the FBO's operating costs and local competition. Remote airports and those with a single FBO often have higher prices.

What is a fuel flowage fee?

A per-gallon fee an airport sponsor charges FBOs and fuel sellers on fuel sold at the airport, usually under the FBO's lease.

Why is self-serve fuel cheaper?

Self-serve pumps don't need a fuel truck or line staff to fuel the aircraft, so the FBO's cost per gallon is lower.

What is contract fuel?

Fuel sold to operators at pre-negotiated prices through a contract fuel program or fuel card, usually below the FBO's posted retail price.