Agricultural companies use the Warsaw Municipal Airport for a variety of tasks, from planting wheat to delivering insecticides to fields.
Airport officials now are looking at providing a discount fuel program for those agriculture-related flights. In turn, the program could increase fuel sales at the airport.
During Tuesday’s Warsaw Board of Aviation Commissioners, Airport Manager Nick King said he was approached by one of the airport’s current tenants who works with local agriculture leaders.
“We do not have a discount program set up for air tractors. I was approached about one specific company. Upon looking into (it), speaking with legal, we can’t offer one company a discount and not offer another company a discount since the FBO (fixed base operator) is government owned,” he said.
King provided board members with a draft of what they could look at doing as far as discounts for fuel with agri-flights.
“They could be spreading fungicides or insecticides. They could be planting winter wheat, rye, different things like that; or erosion control. We have a lot of different agri-flight companies use our airport, and having a separate fuel structure set up for those aircraft just makes sense,” he said, noting that the airport hadn’t been approached about it previously.
Doing some math, King came up with four options for the discount program, but left it up to the board to decide which direction to take.
“All of those cover our costs, obviously, plus put a little bit back in the bank to cover the guys’ time and their fuel incentive cost that we have built into our price as well. So all of those different discounts include that,” he said.
It’s up to the board what they feel is fair and appropriate, he told them.
Depending on the program price, King said there’s one company that could purchase 22,000 to 25,000 gallons in the six to eight weeks that they’re operating out of Warsaw.
“So it’s not an insignificant amount of fuel,” he stated.
Another reason to provide the discount, King said, is because “it takes almost no labor for our staff to fill these operations. We do not actually fill the aircraft. They have their own tanks. Once these aircraft start in the morning ... they have an exemption and they’re allowed to do hot refuelings.”
Some of the big operations have 1,500- to 6,000-gallon tanks.
“We fill them up, and then they fill their own aircraft. So it’s very little labor, which is another reason we can get that cost down so much,” King said.
Board member Dan Robinson said this kind of stuff usually ends up in negotiations. He suggested the board authorize King to negotiate a discount program at options 2, 3 or 4.
Board member Gene Zale suggested going with option 4. “The reason is, I’d like to see our profit go up a little bit. We’ve been in a hole for so long, I don’t like that. I don’t like to be in debt to the people that live in Warsaw, Indiana, I guess. I would say go with discount number 4 to start out with and try that for this year.”
Robinson said 4 would be ideal for the airport, but he wanted to give King some room for negotiation. Zale suggested King go with 4 first and see how it was received. Board Vice President John Yingling said he understood they’d start with 4, and then if that’s not acceptable, they go to option 3.
“The only devil’s advocate that I will also throw in there, just to think about, as we are doing this, this is not for one company. This is all air tractor flights in and out of Warsaw, and it is a small market and a small window. But if we can increase that business - we support agri-flights now. There’s companies that come in, we have people as far away as Texas flying equipment, with their trailers, that service our community,” King said.
“A lot of people don’t know this: We support over a half million acres of fields in agriculture out of our airport every year with all the different agri-flights that we have because there’s other counties around us that don’t have airports that have the ability, or they don’t have an airport.”
He said Whitley County doesn’t have an airport so many of the farm fields that get sprayed over there either operate out of Warsaw or Huntington.
“If we can have an attractive enough fuel discount for those flights, we may be able to pull more of those from the surrounding areas, for them to come and purchase their fuel from us,” King said.
After some further discussion, the board voted to authorize King to negotiate fuel discounts for agri-flights for the remaining six months of 2024. He will begin negotiations with option 4, and the board will re-evaluate the matter in 2025. Option 4 is $1.60 to $1.70 per gallon off the list price.
Moving on to another fuel topic, King said he has spoken with the airport’s fuel supplier and is working with them on providing self-serve fuel at the airport for 100 low lead.
“Sitting down and looking through piecing a self-serve farm together, where we would basically go out and source all the parts versus having a company build us a site-specific unit. Cost savings are 5 to 8 percent, if we did it ourselves versus having someone else do it. And with something like an above-ground 100 low lead fuel tank, I think it is far in the airport’s interest, for insurance, to have a special company build this. They literally bring them in on a crate and set them in place, and all we have to do is provide a concrete pad and power - 110 or 220,” King said.
He said while they might save a couple thousand dollars building it themselves, if it’s built incorrectly or something goes wrong, it could wind up costing the airport exponentially more.
King requested permission from the board to start soliciting quotes or requests for proposal to put in a self-serve fuel farm. The board gave their consent.
“Along those lines, I just wanted to let the board know we had a potential fuel release about a week and a half ago,” King said. “We were receiving a load of Jet A, and one valve was not set correctly and we were putting that fuel in the wrong tank. And so it was supposed to be going into our Jet East tank, it was put into our Jet West, which was not full but almost full.”
He said they don’t have a gallon amount.
“We’ve gone through our SPCC (Spill Prevention Control and Countermeasure). We’ve been working with IDEM and all the appropriate company bodies, but I just wanted you guys to be aware we are working through that process right now, and I’ll update you as we have more information,” King said.
Another request King asked of the board was their approval to get requests for proposals for new restrooms at the airport. He said they’ve done the best they could internally, but it’s to the point now where they need to have a professional company come in and remodel the restrooms.
Where the old men’s restrooms is, he said he’d like to remove the urinal and have a shower installed. A shower is one of the biggest requests the airport has from the corporate pilots.
Both restrooms would be remodeled, and King estimated the cost at around $50,000, including the installation of new plumbing.
“It would fix a lot of current plumbing issues that we have at the airport,” he said.
The board consented for King to get the RFPs or quotes.
The board’s next meeting is scheduled for 5:15 p.m. July 9 in the council chambers at City Hall.