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Old 01-27-2011 | 12:17 PM
  #7  
geosynchronus
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Joined: Oct 2010
Posts: 29
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From: Corporate Captain
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I agree with you about the relationship building, it's a sorry state of affairs.

The realized savings numbers are still a little fuzzy to me; which isn't saying much. I get confused easily!

I do not see it as a realized savings, but more of a threat. The FBO says buy our fuel at X price, or we will charge you, say $200.00. If you purchased the minimum amount of fuel, and subsequently the FBO discounted your fuel bill by $200.00, then I would see it as a realized savings. Most of the time, that profit margin is built in to the price. They either get it by the gallon or they get it by an arbitrary charge.

I actually add the cost of the ramp fee to the total cost of the fuel as if I had purchased it at our home base. Here is an example:

Home base fuel cost per gallon: 3.88
Destination fuel cost per gallon: 4.79
Ramp fee in dollars: 200
Gallons to waive fee: 150
Home base x gallons 582
Destination x gallons 718.5
Difference 136.5
Ramp fee savings(-) -63.5

If the ramp fee savings number is close to zero (neutral) or negative, I plan on purchasing fuel. If the ramp fee savings number is higher (say over $200), I then plan on tankering if possible.

This does not calculate the cost of carrying the fuel, that's another issue. This is just a quick purchase guideline that we use. It's in a spreadsheet, but I could not embed it here.

Here is a crystal clear example that screams "tanker" at an FBO that starts with an "S" and ends with an "e"

Home base fuel cost per gallon: 3.88
Destination fuel cost per gallon 6.71
Ramp fee in dollars: 400
Gallons to waive fee: 300
Home base x gallons: 1164
Destination x gallons: 2013
Difference: 849
Ramp fee savings(-): 449

Cost to waive ramp fee: $449

Last edited by geosynchronus; 01-27-2011 at 12:31 PM.
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