Airfield Fuel Pricing

[neutron]

At Newcastle, the airport charges a commission on every litre of fuel supplied on the airfield. The current prices are as follows:
AVTUR 49.55 ppl inc commission of 1.05 ppl
AVGAS 106.26 ppl inc commission of 8.19 ppl!
(excluding vat)
My questions are: 1) Is it common practice for major airfields to do this & 2) Is it legal or justifiable to charge differential rates, discriminating against piston engine aircraft?

[18greens]

Isn't it a function of the amount you buy.

The average avgas uplift is 50 litres whereas the average jet uplift is more like 500 litres (or more). It takes the same effort to pump the two. Perhaps that accounts for the 10 times differential. If they didn't make a profit on the fuel why would they sell it? The have to pay for the fuel farms and trucks etc.

Whats more amazing is that they let you know what the commission is.

[neutron]

We are not talking about fuel suppliers' profit here. At EGNT Samson supply most GA fuel and naturally make a profit per litre of fuel sold. The airfield commission is simply a charge levied by an airport operator for allowing fuel to be supplied on that field in the same way that an airport may charge car-hire companies a levy on every car hired from an airfield!

[18greens]

Ahhhh. In that case dunno.

[niknak]

The answer is, yes the airport can make a commission charge on fuel and yes, it is common practice at major airfilds in the UK.

The main reason for the difference in the commission is that most airports sell significantly more Jet A1 than they do Avgas. In Newcastles case, I would imagine that they sell at least 10 times more A1 than avgas, but they still have the storage and operating costs of a commodity which sits there and probably costs more to store and dispense than any profit which may be made on it.
At most airports, Jet A1 sales subsidise the costs of providing avgas.

[dwshimoda]

And at £1.25 a litre, it's still 5p a litre less than I'm paying!!!

[Mark 1]

At most airports, Jet A1 sales subsidise the costs of providing avgas
Niknak - I don't think that could go unchallenged.

What is the incentive to sell Avgas at a loss? With 30-40p/litre retail mark-up, most smaller airfields rely on the income from 100LL sales to keep going.

What do you base your assertion on?

[niknak]

Mark,

I said that the majority of airports, not smaller airfields.
The difference is very obvious, airports tend to attract more turbo prop and jet aircraft, wheras the smaller airfields rely on avgas fuelled aircraft.

I can assure you that, what ever the situation, the mark up to the fuel supplier of Avgas, is less than 10p per litre, and often a lot less.

[neutron]

Just to clarify the point, the airfield is NOT supplying or selling the fuel. They are simply choosing to charge a commission for every litre of fuel that they allow a private company to sell on their airfield, the fuel supplier's profit is not in dispute here.
neutron

[RVR800]

98 octane Low lead is for sale at Tesco at well under a pound