Airport Will Phase In Jet Fuel Price HikeThe price of jet fuel at Warsaw Municipal Airport will be going up gradually over the next year.
The aviation board on Tuesday agreed to a new fuel price structure that will generate more revenue needed to maintain the facility.
Airport operations rely on fuel sales, as well as a funding from the city and land leases, but revenues from fuel have been down in recent years.
Airport manager Nick King pointed to rising costs of maintaining the airport as a main reason and noted two other factors that have affected jet traffic and fuel sales in recent years.
Nationally, changes in tax policy for corporate travel introduced about nine years ago led to a decrease in jet travel, King said.
Locally, changes in the orthopedic landscape have had an impact. Years ago, the airport had three big corporate jet users – Zimmer, Biomet and DePuy. But in recent years, Zimmer and Biomet merged and other corporate decisions involving DePuy Synthes and Medtronic led to a decrease in the number of orthopedic jets based at the airport.
Overall, though, traffic related to orthopedics is only down slightly, King said.
Fuel sales at the airport have been recovering since hitting a low point in 2013. Part of that is from new customers, King said.
The revised fuel structure approved Tuesday is expected to generate an additional $281,000 annually if fuel sales remain constant, King said. That would nearly double the amount collected in 2017, according to paperwork provided by the airport.
Prices were not changed for aviation gas.
The change in price structure for jet fuel is the first in at least 20 years, King said.
Overall, the price for jet fuel will rise 60 cents per gallon for jets based at the airport. Transient jets will see a 90-cent hike when fully phased in.
The new price structure adds more levels in its scale of volume, with new slots for the smallest and biggest users.
The hike will be phased in at 20-percent increments beginning Oct. 1, and continue over the next four quarters.
Board member Gene Zale called the changed “way over due.”
The change will mean prices at the Warsaw airport will be more than other small nearby airports, but less than in Fort Wayne or South Bend.
The current advertised price at Warsaw for jet fuel for transient jet traffic is $3.95 per gallon. The price at Goshen is $4.15, Elkhart is $4.99, Fort Wayne is $5.08 and South Bend is $5.09
When fully phased in, the Warsaw price will be around $4.85
Eight jets are based at the airport, which is more than what is seen at other airports in similar-sized cities, King said.
“The cost of maintaining the airport is not going down. It’s going up and we need to do some things to align ourselves with some of these larger airports that have similar costs as our airport,” he said.
King predicted jet customers will not be concerned with the price hike, but do notice amenities.
“They expect smooth runways, smooth taxiways, fresh pots of coffee, clean bags of ice, courtesy cards that work,” King said. “We really need to up our game so we are giving as much service to our customers as we possibly can.”
In other matters, the board approved of plans for a fundraiser at the Silveus hangar for parents of Warsaw Community High Schools girls soccer team. The trivia contest will be Sept. 15.
The aviation board meets normally on the second Tuesday of the month. Beginning Sept. 11, the board will begin meeting at city council chambers instead of at the airport.
The change in location is needed so that the meetings can be streamed live on the internet and archived on the city’s website, King said.
