Airline Jet Fuel Consortiums

Presented by Daniel L. Muchow Quarles & Brady LLP and Michael Sveen Aircraft Service International, Inc.

Presented to
AIRPORTS COUNCIL INTERNATIONAL - NA September 25, 2010

Fuel Consortiums General

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At many airports across the United States a common fuel system is shared among the airlines serving those particular airports. This common, multiple-user system concept provides a more efficient and cost-effective alternative to having an array of exclusive-use fuel systems on the airport. To operate and manage common fuel systems, airport Fuel Committees are established. With representation from each member airline, the Fuel Committee serves as the governing body in matters concerning the common-use system.
ATA Guidelines for the Organization and Operation of Airport Fuel Committees, July 1997

Fuel Consortiums Overview

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Common Use Fuel System at Airports Storage and Delivery of Jet Fuel Airline Representation on Fuel Committee Consortium Does Not Own Fuel Airlines execute their own fuel trades No employees Independent contractor operates fuel system Often organized as legal entity (LLC, Corp., etc.)

Fuel Consortiums - Overview

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Airlines share cost of the fuel storage and delivery system Annual fuel committee meetings and special meetings Exclusive System at Airport (preferred) Non-members can use the Fuel System Fuel Consortium operates on "break-even" basis, similar to a Co-op or non-profit arrangement

Fuel Consortiums Rationale

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Efficiency Eliminate multiple systems at airport Quality Control Single system assures high quality fuel Cost Containment Allows better control of costs associated with the fuel distribution infrastructure Security of Fuel Supply off-Airport impacts GOAL Sufficient quantity of high quality fuel at the Airport at all times

FUEL CONSORTIUMS ISSUES FOR AIRPORT LEGAL COUNSEL

Need for single fuel/hydrant system vs. Federal Aviation Act "Exclusivity" Provision Environmental Liability Current vs. Past Fuel Consortium Not A Profit Center Technical Expertise Fuel Consortium as Partner Long term lease & legal entity Financing and off-Airport supply

PHL --Fuel System Expansion & Modernization Project

Presented by Michael Sveen, Aircraft Service International, Inc.

What Does this Mean?

Add additional capacity at the fuel storage facility Install a hydrant system Install new pumps and filtration Expand with an additional fuel supplier

Why An Expanded & Modernized Fuel System?

Keep pace with PHL growth

Reduce congestion in the AOA Provide a more safe & environmentally friendly service to PHL

How Will This Project Support PHL Growth?

Decreased turn times Increased efficiency of operations Increased ability to add passenger traffic Reduced cost of operations

Fuel Truck Imprint

Loaded 15K Tanker A321 A320 A319 737-300 Stationary cart Ramp Space Required (Sq. Ft.) 767 6,820 757 6,110 A320 5,270 Tanker Needs: 930 Stationary Cart Needs: 53 Weight (lbs.) 141,400 181,000 162,000 154,000 138,500 1,700

How Will Hydrants Solve Congestion In The AOA?

Less trucks More room for others Stationary Carts Less vehicles driving

Stationary Cart Imprint

How Will Hydrants Be Safer And Better Environmentally?

Reduced potential for accidents Decreased incidents of fuel spills Reduced vehicle emissions

Questions?

Airline Fuel Consortiums

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