Clinton McKenzie
9th Nov 2016, 08:11
I suspect others may find themselves in, or have already been thrown into, a frustrating situation that I'm guessing has been caused by BP allowing its bright-eyed bean-counters to implement an idea that's good in theory but disconnected with practical reality.
The story so far...
Aerorefuellers in Albury has for some time been providing the service of arranging for the issue of various brand Carnet cards for aircraft owners. People could make a single application to Aerorefuellers and Aerorefuellers obtained and passed on Air BP, Mobil, Shell and Aerorefuellers' own Carnet cards. I've been using these cards for years, and Aerorefuellers issues one invoice and you make one payment per month, irrespective of the mix of brands of fuel you purchase. Aerorefuellers pays the individual fuel companies. (And let me record, publicly, my thanks for Aerorefuellers' service. I should also declare that I have no direct or indirect pecuniary interest in Aerorefuellers.)
Then Shell bailed out of issuing Carnet cards for all the 'little-end-of-town' transactions. However, that isn't a problem operationally, because Shell bowsers now accept normal credit cards. (Thank you Shell for a practical solution.)
Then Aerorefuellers recently wrote to its customers to say that Air BP was no longer prepared to issue Carnet cards through Aerorefuellers, and owners now have to apply direct to Air BP.
Application submitted accordingly.
Letter received from BP this week: Please arrange for a $10,000 bank guarantee in favour of Air BP.
After I stopped laughing, I called the number specified in the letter, in response to the invitation: "please do not hesitate to contact the undersigned". There was no signature, but rather the typed words "Credit Services". I guessed that that was not a person's name, unless s/he was fortuitously christened with a very unusual name that matched his/her eventual vocation. The usual telephone menus, confused telephonist and music on hold for protracted periods ensued, but I was eventually put through to an earnest youngster whom I assume works in BP's "Credit Services".
The youngster provided a very accurate explanation of how credit assessments are done and why a bank guarantee might be required. I explained that I knew all of that, and that I guessed the family company that owns the aircraft and in whose name the application was made in my case has no credit history or rating, because it's never borrowed money. All of its bills have been paid with its own money.
Yep. That would be it. A company that only pays with its own cash would typically be required to provide a bank guarantee.
I asked: You do realise that there has been an Air BP Carnet card issued to the company for the aircraft for years, and that the bills for that card have always been paid, don't you?
Answer: Yes, but Aerorefuellers have been paying BP's bill, not your company.
Touché.
Riposte?
Me: So you think Aeroefuellers would simply keep paying BP's bills for fuel purchased on that card, year after year, if Aerorefuellers' bills to my company weren't being paid? Maybe Aerorefuellers would have taken action to cancel the card if the company hadn't been paying reliably?
Youngster: Errrrmmm.
I asked: Do you really think that I'm going to arrange for a $10,000 bank guarantee in BP's favour, to get a card to buy a few thousand dollars worth of BP fuel each year? Do you understand the implications for all the people in similar circumstances?
You can guess the answer: That's the requirement.
I felt like suggesting that BP should require mortgages of real property as well, to hedge the risk of the guarantor bank failing. However, I restrained myself because there was a risk of the youngster getting a bright idea.
I also asked, though I also said I anticipated the answer would be "don't know": Do you know if BP bowsers will be modified to take normal credit cards?
The answer was as anticipated.
**Big sigh**
There is nothing wrong with BP confirming the creditworthiness of the persons to whom BP issues Carnet cards. It's just ordinary, prudent business risk mitigation. But in this case there was a very simple and practical way to achieve that outcome in respect of holders of cards issued through Aerorefuellers: Just ask the holders for consent to Aerorefuellers disclosing the details of its transactions with the holders. Or BP could just make the reasonable assumption that the holders of cards issued through Aerorefuellers had been paying their bills, otherwise Aerorefuellers would have taken action to cancel the cards.
Or BP could simply ditch Carnet cards for the little-end-of-town and instal credit card payment facilities on its bowsers. It is evidently technically and commercially possible and practical.
I have compiled a list of aerodromes that my friends and I often visit where the only fuel bowsers are BP's, in anticipation of not going there any more. I wonder whether BP has any insight into what effect this could have on the local economy of those places if lots of others do the same thing. Would BP would even care?
For instance, I will miss the relaxing lunches in that nice cafe run by the nice ladies in the Broken Hill terminal, and I anticipate they will miss our business. I could pay Ross, the local refueller, by credit card to fill the aircraft, but I'm not prepared to pay the 20c per litre surcharge for the privilege. A nostalgic wave as we overly will be the more likely choice, because my home base to YLEC is a comfortable hop, with a 24/7 credit card bowser at both ends (though it would be nice to have DF back at YLEC!). Or maybe this is just part of the death throes of traditional GA and I'm a nobody at the margins. *shrug*
Here's hoping that BP bowsers will be modified to accept normal credit cards. However, given that BP's decisions so far seem to me to be disconnected from practical reality, I'm not going to hold my breath.
Radio Check Air BP: Please contact planet Earth.
The story so far...
Aerorefuellers in Albury has for some time been providing the service of arranging for the issue of various brand Carnet cards for aircraft owners. People could make a single application to Aerorefuellers and Aerorefuellers obtained and passed on Air BP, Mobil, Shell and Aerorefuellers' own Carnet cards. I've been using these cards for years, and Aerorefuellers issues one invoice and you make one payment per month, irrespective of the mix of brands of fuel you purchase. Aerorefuellers pays the individual fuel companies. (And let me record, publicly, my thanks for Aerorefuellers' service. I should also declare that I have no direct or indirect pecuniary interest in Aerorefuellers.)
Then Shell bailed out of issuing Carnet cards for all the 'little-end-of-town' transactions. However, that isn't a problem operationally, because Shell bowsers now accept normal credit cards. (Thank you Shell for a practical solution.)
Then Aerorefuellers recently wrote to its customers to say that Air BP was no longer prepared to issue Carnet cards through Aerorefuellers, and owners now have to apply direct to Air BP.
Application submitted accordingly.
Letter received from BP this week: Please arrange for a $10,000 bank guarantee in favour of Air BP.
After I stopped laughing, I called the number specified in the letter, in response to the invitation: "please do not hesitate to contact the undersigned". There was no signature, but rather the typed words "Credit Services". I guessed that that was not a person's name, unless s/he was fortuitously christened with a very unusual name that matched his/her eventual vocation. The usual telephone menus, confused telephonist and music on hold for protracted periods ensued, but I was eventually put through to an earnest youngster whom I assume works in BP's "Credit Services".
The youngster provided a very accurate explanation of how credit assessments are done and why a bank guarantee might be required. I explained that I knew all of that, and that I guessed the family company that owns the aircraft and in whose name the application was made in my case has no credit history or rating, because it's never borrowed money. All of its bills have been paid with its own money.
Yep. That would be it. A company that only pays with its own cash would typically be required to provide a bank guarantee.
I asked: You do realise that there has been an Air BP Carnet card issued to the company for the aircraft for years, and that the bills for that card have always been paid, don't you?
Answer: Yes, but Aerorefuellers have been paying BP's bill, not your company.
Touché.
Riposte?
Me: So you think Aeroefuellers would simply keep paying BP's bills for fuel purchased on that card, year after year, if Aerorefuellers' bills to my company weren't being paid? Maybe Aerorefuellers would have taken action to cancel the card if the company hadn't been paying reliably?
Youngster: Errrrmmm.
I asked: Do you really think that I'm going to arrange for a $10,000 bank guarantee in BP's favour, to get a card to buy a few thousand dollars worth of BP fuel each year? Do you understand the implications for all the people in similar circumstances?
You can guess the answer: That's the requirement.
I felt like suggesting that BP should require mortgages of real property as well, to hedge the risk of the guarantor bank failing. However, I restrained myself because there was a risk of the youngster getting a bright idea.
I also asked, though I also said I anticipated the answer would be "don't know": Do you know if BP bowsers will be modified to take normal credit cards?
The answer was as anticipated.
**Big sigh**
There is nothing wrong with BP confirming the creditworthiness of the persons to whom BP issues Carnet cards. It's just ordinary, prudent business risk mitigation. But in this case there was a very simple and practical way to achieve that outcome in respect of holders of cards issued through Aerorefuellers: Just ask the holders for consent to Aerorefuellers disclosing the details of its transactions with the holders. Or BP could just make the reasonable assumption that the holders of cards issued through Aerorefuellers had been paying their bills, otherwise Aerorefuellers would have taken action to cancel the cards.
Or BP could simply ditch Carnet cards for the little-end-of-town and instal credit card payment facilities on its bowsers. It is evidently technically and commercially possible and practical.
I have compiled a list of aerodromes that my friends and I often visit where the only fuel bowsers are BP's, in anticipation of not going there any more. I wonder whether BP has any insight into what effect this could have on the local economy of those places if lots of others do the same thing. Would BP would even care?
For instance, I will miss the relaxing lunches in that nice cafe run by the nice ladies in the Broken Hill terminal, and I anticipate they will miss our business. I could pay Ross, the local refueller, by credit card to fill the aircraft, but I'm not prepared to pay the 20c per litre surcharge for the privilege. A nostalgic wave as we overly will be the more likely choice, because my home base to YLEC is a comfortable hop, with a 24/7 credit card bowser at both ends (though it would be nice to have DF back at YLEC!). Or maybe this is just part of the death throes of traditional GA and I'm a nobody at the margins. *shrug*
Here's hoping that BP bowsers will be modified to accept normal credit cards. However, given that BP's decisions so far seem to me to be disconnected from practical reality, I'm not going to hold my breath.
Radio Check Air BP: Please contact planet Earth.