Does the Cost of Avgas Really Matter?

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Itís an article of faith that one reason flying activity is in the crapper is because avgas costs, on average, about $6 a gallon. Maybe thatís true, maybe it isnít, but like many of us in the aviation business, I suspect the high price of fuel is just one reason for declining flight activity and it may not be the dominant reason.

As we reported last week, Redbird aims to put some data on the theory with its novel experiment to sell fuel for a buck a gallon throughout the month of October. The logic here is that if flying activity doesnít increase by a certain amount, that will prove that the price of fuel isnít the major driver some of us think. The obvious weakness in this reasoning is lack of a baseline at certain price points so we have no idea if demand for avgas is elastic or inelastic. Where does the curve shallow or get steep? Is it $2 or $4.50? Thereís simply no data to inform a guess, thus Redbirdís survey questions will need to be cannily contrived to make any sense of this. In the end, it may not be possible to make any sense of it.

From our own recent fuel survey, we may have confirmed the beliefs of those who say fuel price isnít the driver we think it is. One of the questions on that surveyówhich weíll be reporting on shortlyóasked about mogas versus avgas. While there is widespread interest and support for mogas, not many owners are actually using it. The survey asked why. Only 5 percent of the respondents cited a lack of enough price difference between mogas and avgas as a factor in not using it.† No surprise that nearly a quarter said they donít use it because itís not available on the airport. Iím willing to bet Redbirdís experiment will reveal a parallel finding. Fuel price has an effect, but not to the extent we believe.

On the other hand, even if the Redbird project reveals that fuel price is a bigger factor than we thought, what to do about it? Jet A is a solution, but a slow developing one, given the size of the legacy fleet. Mogas is promising, but remains steadfastly unable to gain traction, despite strong interest in it. (More on that later.)

The fuel survey revealed another thing: Many pilots donít see why an unleaded replacement for avgas has to be more expensive. Why shouldnít we expect it to be cheaper? Because there are no visible market forces to make it so. Thereís no reason to believe the unleaded replacement will be cheaper to manufacture given how cheap lead is as an octane enhancer. Furthermore, the price you pay for avgas doesnít have much to do with the cost of producing it anyway. Bluntly, refiners put a fat margin on avgas because the market will bear it and competition, hobbled by limited suppliers and transportation challenges, hasnít worked to flatten out the price spikes.

Leaded avgas is really more of a specialty chemical than a fuel and that may prove more true of its unleaded replacement. It will likely sell in a market where Jet A will continue to erode the usefulness of aviation gasoline. No part of that equation points to lower prices. But we can all hope the unleaded replacement will bring more players into the market. Thatís not impossible, but I donít see it as likely.

Meanwhile, Iíll be watching Redbirdís loss leader experiment with interest. It may very well be the FBO equivalent of the Charge of the Light Brigade, but it†ought to make for some compelling news coverage. We can all use a little more of that.

Join the conversation. †Read others' comments and add your own.

Comments (42)

Fat profit on Avgas? You have no idea.

Refineries are so efficient and the costs are so low they could sell all the gas of all types for a buck a gallon forever and it would be an extremely fat profit.

There isn't 9 cents worth of crude oil in a gallon of any type of gasoline. No one talks about this but ask around, what is the refinery yield? You won't believe it. I didn't believe it until I got this from a guy who spends his days at a refinery.

Posted by: Steve Waechter | September 4, 2013 10:34 PM    Report this comment

How can you call flying expensive when our 152 which we got for 15K will cruise at 100 KTAS burning only 6GPH? That's better than 19MPG!

People THINK avgas is expensive because it's compared to mogas.

But 6GPH is $36/hr at $6/gal and when you compare that to a movie, a dinner, or even a long commute, is it so much different? $36 in fuel for an HOUR of flight? And when one of our local airports gets 91 or 93 unleaded (ethanol free) fuel, our cost is going to go down another notch.

Posted by: FILL CEE | September 4, 2013 11:25 PM    Report this comment

Typically how much of the $6/gal is tax?

On a slightly different tack, the Skyhawks on OpenAirplane are around $155/hr. OpenAirplane takes 10% leaving $140 to the FBO. 172SP's burn 10gph but that's tach time so figure an hour on the Hobbs burns 8gallons. If gas were $2 instead of $6 then that rental would be $120, a discount of 23%. At that price, I think most people would fly a little bit more but not a lot more.

Posted by: Dennis Lou | September 5, 2013 12:28 AM    Report this comment

But it's not just the cost of avgas, it's all kinds of energy.

The costs are being manipulated by the commodity market and Wall Street. There is no longer a relationship between cost of production (time and materials) and the sale price.

It used to be the oil company would drill for oil, refine it and sell it to us with a ROI that returned a proper amount to their shareholders. Now they pay 10 cents and because of contrived shortages they sell it based on the commodity price, which is wildly different from anything that could be supported by supply and demand.

My friend who works at a refinery said they were shut down. Why? No place to put any more crude oil, no place to put any more finished products, all the tanks are full. And auto gas was $4.89 a gallon. There is just no shortage at all.

The relationship is so far divorced from costs that we are now paying wild amounts for energy. They keep saying it's "supply and demand" but it's not at all. If supply and demand were in play they would be selling that gas at $1 a gallon to get it out of there so they could unload more ships of crude oil. But they don't.

The high cost of energy is taking money, large amounts of money from people who would otherwise have it to go on vacation, to pay their bills, to go out to a nice dinner, or fly their aircraft. Or to buy a new private aircraft.

Now it's being sucked up by the Oil companies as essentially a windfall that fell in their lap because of what is going on on Wall Street. Clearly there is no reason any oil company needs financing by Wall Street to produce their products. They aren't farmers. They have enough money to make their products.

But they are making money because rather than set the price themselves they have Wall Street setting the price for them, at such a high level they can't even sell what they have made. But they are OK with that. They didn't expect it to be this way but it is.

Posted by: Steve Waechter | September 5, 2013 1:50 AM    Report this comment

Please follow this link to a piece by Exxon on what comprises the cost of (Mo)gas.

http://www.exxonmobilperspectives.com/2012/01/27/what-am-i-paying-for-in-the-price-of-a-gallon-of-gasoline-2/?utm_content=what am i paying for in the price of a gallon of gasoline&utm_source=Outbrain&utm_medium=cpc&utm_campaign=Perspectives_-_Tier_1

This is why you see most integrated oil companies exiting/selling their refining assets to focus on the exploration and production. There is very little profit (if any) in refining alone.

Posted by: Geoff Reid | September 5, 2013 2:39 AM    Report this comment

I feel sure that the cost of Avgas in the USA at a current average price of $6.00 WILL be impacting the amount of hours people are flying as that is getting very expensive for the average renter pilot. It certainly is the case here in the UK where the price per imperial gallon ( =1.2 USG) of avgas currently rises every week by a small amount and as of today Sept 5th it is pound9.50 (sterling pounds), which at today's currency conversion rate of $1.56 = pound1.00 it has reached $14.82 per imperial gallon. This means that renting a PA28 Warrior is becoming prohibitive as typical rental at a pound150.00 per hour ( i.e. $234.00/hour) of which the fuel component alone is circa pound76.00 = $118.56. Sadly it is beginning to look that the demise of GA in the UK is fast approaching! Even Auto gas in the car to go to the airport here is now pound6.34 = $9.89per imperial gallon. Count yourselves lucky still in the USA and keep up the fight with government to keep your gas prices down. Here we additionally suffer ever more from our own government 20% sales tax on everything and from the interference of EASA with its bloated bureaucracy and never ending regulatory costs on GA. Be glad of the FAA and a strong AOPA and we look forward to going over to fly in your system - the best in the world.

Eric Sands UK

Posted by: Eric Sands | September 5, 2013 4:03 AM    Report this comment

Why do I fly less? Well, a roundtrip by Cessna 210 from home to the Bay Area for example costs $150 on Southwest Airlines and $450 in avgas alone. The time spent traveling is identical although the experience is infinitely better in the Cessna. But the cost differential is compelling. Unless of course I can take 2 or 3 passengers , but that is not always how the trip works out.

In 1990 the math was very different and the 210 won every time.

Posted by: peter vans | September 5, 2013 4:18 AM    Report this comment

I agree with your sentiment of how pilots expect unleaded avgas to be the same price or cheaper than leaded avgas.

It appears to me that we as an industry face a choice - if the goal is cheaper fuel, it will need to be based upon existing production streams of gasoline (i.e. some sort of certified 'mogas' or 92UL, or something similar) and airframes will need to be modified. If the goal is a drop-in replacement, it will likely cost more per gallon than 100LL.

By my way of thinking, if I'm right and unleaded costs more, and if the high performance airplanes and twins are the ones that need the octane, airframe mods and less expensive fuel would make more sense. Take a 421 for example - when you're looking at 45 gallons an hour, $1 - $2 per gallon would pay for one heck of an airframe mod.

Posted by: Josh Johnson | September 5, 2013 6:01 AM    Report this comment

"Refineries are so efficient and the costs are so low they could sell all the gas of all types for a buck a gallon forever and it would be an extremely fat profit."

I'm sure anyone in the oil business will get a good giggle out of this, so I assume you're being facetious. The reality is that the refinery or downstream end of the oil business is often a money loser or shows very slim profits; the profit is in the upstream side. This is why some companies have divested themselves of their refinery businesses.

This has only recently begun to change a little, thanks to cheaper domestic crude from the Bakken, Eagle Ford and other tight oil formations, plus cheaper natural gas feedstock. But it could flip back the other way in a heartbeat.

Posted by: Paul Bertorelli | September 5, 2013 6:07 AM    Report this comment

"There isn't 9 cents worth of crude oil in a gallon of any type of gasoline."

Really? Google the topic. You'll find hundreds of documents that all seem to agree that one barrel of crude oil (42 gallons) yields 19 gallons of gasoline (among other products). Take the 19; divide it by the 42. The resultant fraction is 45%. That means that the fraction of the barrel that produces gasoline represents 45% of the cost of the barrel of oil. With crude running about $110/bbl these days, the 45% component works out to $49.50. Divide that by the 19 gallon yield, and the crude component works out to about $2.60 per gallon.

If you analyze the 9 cents per gallon claim, you discover that at $110/bbl, you'd have to yield 1,222 gallons of liquid product from that 42-gallon barrel - and that 100% of the barrel would have to be refined into gasoline, which cannot be done. At the 45% component level, you'd have to somehow extract 2,716 gallons of gasoline from that 42-gallon barrel, to get 9-cent per gallon gasoline.

Posted by: Tom Yarsley | September 5, 2013 7:07 AM    Report this comment

At my FBO, we sell 91 octane unoxygenated auto fuel for $1.10 a gallon less than 100. The fuel comes with full documentation--octane rating, Reid Vapor pressure, makeup. We have very few takers. We could make the price differential $1.40 a gallon, but we use auto fuel in our own Piper Warriors, as well as Rotax-powered aircraft.

The problem is pilots continue to be uncomfortable with auto fuel. Part of the problem is well-founded--they don't know exactly what the fuel is. Others simply believe the old wives tale that "Auto fuel will hurt my engine." Some just don't like the smell of it.

For aviation auto be accepted, it has to LOOK like avgas. Dye it green. Use the avgas "odorizor" in place of the auto gas. It will give pilots assurance that it IS conforming auto fuel. Get the FAA behind it--try it for 5 years--and you will have "found" the replacement fuel for 80% of the fleet.

Posted by: jim hanson | September 5, 2013 8:47 AM    Report this comment

The reason why I'd expect (hope?) unleaded avgas to be cheaper than 100LL is because it can be sent through pipelines like mogas. Right now it has to be segregated because of the lead content, which raises the cost of transport. Take away the necessity to truck the fuel to locations and the cost should go down.

Posted by: Will Alibrandi | September 5, 2013 8:56 AM    Report this comment

Yes, the price of avgas matters a great deal. When I first started flying, avgas was $1.75 a gallon. To purchase 40 gallons of 100LL was $70.00. Now at $6.00 a gallon that same amount is $240.00! That is a huge impact on my monthly flying budget.

Posted by: Ric Lee | September 5, 2013 9:13 AM    Report this comment

I think GA is over with. We fly a Pietenpol with an A65 that sips fuel at 4 gallons per hour. We are using "cheap" car gas. The fuel cost is $12-$16 per hour. Flying the Piet is dirt cheap but more and more she sits in the hangar on perfect days. If it isn't the economics of flying, then what is it? Can someone explain this to me? The only thing I can figure is that something inside of people changed. Flying is the ultimate expression of freedom. I don't think that people are feeling it anymore. Maybe people feel like they are slaves to their McJobs.

Posted by: Andre Abreu | September 5, 2013 9:58 AM    Report this comment

Paul and Thomas, a gallon of crude oil produces various different products. They don't produce avgas and throw the rest away. It all counts. You can't do the math and ignore the rest like Thomas did.

Those other products are profitable too, nothing is wasted. So when the refinery runs it makes gas, diesel, lubricating oil, even asphalt from the same crude oil. So they sell it all, and some are much more valuable than gas or even avgas.

I have not researched the refinery profit vs crude oil production profits but I will look into it. I don't doubt that buying (or extracting) crude oil is more profitable than refining, of course it is, because no one knows what anything costs and the prices of crude are set on the commodity market by people who buy and sell things, contributing nothing,

It's completely different from how it used to be, a T&M and ROI calculation modified by a supply and demand factor. None of that goes into crude oil pricing anymore. Witness we have a glut of oil and gas and the price is at nearly an all time high.

If it were just illegal to buy crude oil without taking physical delivery it would not be possible to speculate on contracts like is going on now.

Why is there a commodity market? So farmers can sell their crops before they grow them. They get the commodity futures contract sold and that is the money they use to grow it.

Clearly oil companies don't need Wall Street to front the money to produce crude oil, they have more than enough money to do that.

So commodity traders take payments out of the system adding costs and contributing nothing, and the oil companies ultimately benefit from a product they themselves used to sell for $1 for $6. Now they might have $1.50 in it and they get a handsome ROI.

USA is a big country. We can't pay for gasoline like they do in Europe, we'd have to live like some countries do, 4 or 5 generations living in the same house, riding a bicycle, train or bus to get around. There is no way to make the US that public transportation compatible, it's just too big. Have you tried to take a bus in a place like Los Angeles? It can take hours and three buses to get from here to there. We're just not Manhattan island.

Posted by: Steve Waechter | September 5, 2013 10:22 AM    Report this comment

When weekend warriors flying certified four-bangers for 25 hours a year say they aren't flying because of the increase in the cost of fuel -- and a whole lot of them say that, in my experience -- I always want to see the maintenance condition of their aircraft.

Compared to my annual maintenance and upkeep expenses, even for my lowly 1979 Warrior, a $2 increase in a gallon of avgas is not a particularly material factor.

The increase in fuel costs is often an excuse, not a reason, for decreased flying. If it is a legitimate financial reason for decreased usage of a "cheap" GA aircrat, I strongly suspect the aircraft involved is being operated on a budget that is way, way too tight for proper maintenance and upkeep.

Obviously this equation could change pretty dramatically if you travel all the time in a six-cylinder or (God forbid) a guzzler twin. There's a reason you can get a used 310 for a song.

Posted by: DOUGLAS GARROU | September 5, 2013 11:03 AM    Report this comment

I can fly my family of three for about the same or slightly less cost in fuel than buying airline tickets. A lot of "pilots" would rather sit on the ground, make excuses, and complain than go flying.

Posted by: Russell Savory | September 5, 2013 11:19 AM    Report this comment

Steve, if you get around to adding up all the commodity prices on what a refinery might produce from a barrel of oil, you will wonder how they survive at all. (Some don't. Hess just closed one in New Jersey.)

For your research, you should start with Daniel Yergin's The Quest and follow that up with Energy Myths and Realities by Vaclav Smil. Yergin explains how how the financialization of the oil industry isn't a major driver in the cost of oil, although it is one factor.

There have been two siesmic changes in the past 20 years in the oil industry. The big one is demand shock. U.S. demand used to be a major driver in world prices, but it no longer is: BRIC demand is. It sustains high demand so the spikes that used to collapse oil prices don't happen anymore. The second big change is that the cost of exploration is now so high that even companies as large as Exxon couldn't afford to do these on their own, hence the merger with Mobil. And Chevron and Texaco and so forth.

A third volume I'd recommend is William Leffler's Petroleum Refining. It's an expensive book but explains in lay language how the refining industry works, with a good section on pricing and why the ebb and flow in the crude market can turn a profitable refinery into a loser overnight if the company isn't paying attention.

Once you've digested that, I doubt if you'd conclude there isn't 9 cents worth of crude in a gallon of gasoline.

Posted by: Paul Bertorelli | September 5, 2013 1:41 PM    Report this comment

I had not one but two refinery workers tell me this: When they refine crude oil it can produce 30x the amount they start with in finished products. Various products of course, some more and some less valuable. And some may be asphalt, could be cheaper. Some could be lubricating oil, much more valuable than gasoline. It's fractions, as you know.

But at $110 a barrel that makes the 9 cents cost of crude per gallon of finished product I mentioned. And yeah, they do get 1200 gallons of finished products out of a 42 gallon barrel of crude. Refineries are very efficient. Some of the products are light and some are heavy.

Are there other costs? Of course there are. Are the costs significant? Well, maybe they are. But surely not significant enough to cause energy prices as high as they are now.

But the fact remains that when the tanks are full and the refinery is shut down because of no place to put anything that should constitute a glut and supply and demand should dictate falling prices. I don't know what BRIC is, but if there is a glut and that somehow prevents avgas prices declining to $1, well that is ripe for investigation. I'll look into it.

If refineries are in business to refine and they can't because everything is full, they are not making money. But maybe if they have full tanks of crude they can make money whenever they can sell off some of the finished products, so they are in no rush.

There's an old saying, you can make money when you buy, or make money when you sell. Clearly they are doing it the way I like to, make money when they buy. The money is in the bag and they don't need to refine it, as long as they *can*, they are OK at least for a while.

These are very profitable companies, the most profitable in the world. I have to wonder if there is really a glut here in the US do we need to be importing oil right now? Maybe we should hold off until the crude gets back to $60. Not that everything is not fixed so we the end users will *not* benefit from that decline, that much is obvious.

There is no relation between supply and demand and the price of energy, and that disconnect has been created by people much brighter than I am. If that can be done away with I'd be for that, I think the oil producers should be trying eagerly to sell us consumers more, and the prices should reflect that. I'd like a return to that.

Posted by: Steve Waechter | September 5, 2013 3:19 PM    Report this comment

BRIC is an acronym for Brazil Russia India China. And combined, they certainly are a major driver of oil prices with their demand.

"There is no relation between supply and demand and the price of energy, and that disconnect has been created by people much brighter than I am." I'm not sure I would call them "bright", but they certainly are creative (and I'd say greedy, too). The "free market" doesn't seem so free when you can "buy" and "sell" commodities such as oil without actually taking delivery, and simply drive up prices by doing so. But, that's for a different discussion.

"A lot of "pilots" would rather sit on the ground, make excuses, and complain than go flying."

It certainly does seem that way. Two of my aircraft partners and I flew from CT to KOSH and back this past summer, and even including the unexpected cost of a replacement tachometer that decided to retire itself on the way out there, divided by three the cost was pretty close to what it would have been if I had flown there commercially. Except that flying there myself (even in a relatively lowly Piper Archer) was a lot more fun, even with the weather delays and diversions we had to make.

My point being, when you look at all the other things out there to spend my money on, owning an aircraft with three other pilots is a rather economic way to go, and well within reason of most middle-class people who have the desire to fly. But it can be hard to see this from the entry point most see GA from: the flight school. $150+/hr to rent an old C172 might be scaring people off before they start, wondering how they could ever afford to continue the hobby and what the point of starting it would be.

Posted by: Gary Baluha | September 5, 2013 3:42 PM    Report this comment

"And yeah, they do get 1200 gallons of finished products out of a 42 gallon barrel of crude."

Wow. I am honestly stunned by that statement. Got a source for it? Here's one from the U.S. Energy Information Administration: "A 42-U.S. gallon barrel of crude oil yields about 45 gallons of petroleum products. Source: Energy Information Administration, "Oil: Crude Oil and Petroleum Products Explained" and Annual Energy Outlook 2009 (Updated February 2010)"

So, yer pullin' my leg here, right?

BRIC, by the way, is shorthand for the developing world of Brazil, Russia, India and China, whose petroleum demand is rising. It's flat to declining in the U.S.

Posted by: Paul Bertorelli | September 5, 2013 3:54 PM    Report this comment

Paul,

I'm not sure where Steve is getting his information. A telling phrase he uses: "And some may be asphalt"

Sure, you can get 30x yield if you mix a cubic foot of oil with 30 cubic feet of rocks, call it "asphalt concrete" and declare the entire thing refinery yield.

The yield curve for *distillates*, that is, liquid products, is more or less what you've seen.

www dot eia dot gov/dnav/pet/pet_pnp_pct_dc_nus_pct_a.htm

Shows a refinery gain, including Asphalt (but just the "road oil" portion, that is, before mixed with rocks), to be about 6 or 7%. That's roughly in line with what you cited, 45 gallons out for every 42 gallons in.

Steve,

I suggest you get some serious clarification from the people you're hearing from in those refineries. Either you're deliberately misunderstanding them, or they're being very misleading.

Posted by: Joshua Levinson | September 5, 2013 4:23 PM    Report this comment

Paul, no, I am not pullin' yer leg. I was as surprised as you are at the stated yield.

Source is two guys who don't know each other who both work at oil refineries. They could work at the same refinery, I don't know where the lower level guy works. One is a pipefitter, low level. One is a refining engineer, he engineers the refining process. Real high level. They both said 30:1 was achieved. The engineer said "yes, that can be true".

You think they are somehow lying to me? Or I misunderstood? Because I don't think I misunderstood, but I suspect the companies in that industry are not too thrilled to have that information get out.

I saw a documentary on tv recently, it was called "How we invented the world". One episode about cars touched on a refining breakthrough something like 50 years ago which doubled the yield by boiling the crude oil. That was long ago, believe me they are working on that all the time.

My refining engineer guy said they recently did some engineering for the Saudis that will increase the yield yet again. After the Saudis deploy it and if it works OK they will do it at other refineries. He would have no reason to lie to me.

Posted by: Steve Waechter | September 5, 2013 4:40 PM    Report this comment

Steve,

There is absolutely no way that 30:1 can be achieved with distillates. The very laws of physics dictate it. Crude oil has, according to the wikipedia page on Energy Density, 37 MJ/L (megajoules per liter). 100LL has 31.59 MJ/L.

So, assuming you could turn one barrel of oil into nothing but avgas (impossible, but let's just assume it for now), the energy-equivalent volume for 1 gallon of crude oil would be 1.171 gallons of avgas.

The point is, whether it's alkylate, reformate, isomerate, or whatever, the base feedstocks of gasoline are distillates, meaning, they are simply separating out the components of crude oil, and applying minimal amounts of processing to them, not fundamentally changing the makeup. Add the needed additives, like TEL and scavenging agents, and you're done.

The only way 30:1 yields are being produced would be by creating things like plastics, when you're fundamentally changing the chemical makeup of the petroleum product. I'm sure you can come up with some absurdly low density plastics that would give you very high volume-based yields. Same with my asphalt argument above.

However, you're not going to get anything more than 5-10% by volume out when talking about fuels. You can't beat conservation of energy.

Posted by: Joshua Levinson | September 5, 2013 5:00 PM    Report this comment

I fly an average of120 hours each year In my Aeronca. I'd fly twice that amount if I didn't have a job. Passion and money are what's required to fly. When fuel gets too expensive I'll move to a Rotax engine so I can use auto pump gas with ethanol. I don't give a damn what fuel cost because I will never let it keep me on the ground. People who find excuses not to fly, in my opinion, have simply lost the passion or truly are priced out of the game. My vote is on the former. That's fine with me but I don't understand all the hand wringing about it. The industry is on its inevitable decline. The world changes and so do the things people care about. None of this changes my passion for flying and it shouldn't change yours. I'll fly my Aeronca across the country. I just can't think of anything that provides so much enjoyment as a recreation, well, perhaps sailing, but that's another story.

Posted by: jay Manor | September 5, 2013 8:00 PM    Report this comment

Some contributors in this space have interesting math skills...

The proposition that there's nine cents worth of crude in a gallon of gasoline is preposterous and unsupportable.

42 gallons of crude yields 19 gallons of gasoline - and lots of other stuff. If you're allocating costs (not profits) for the gasoline-yielding fraction of the barrel, the cost fraction is 19/42nds of the cost of the barrel. At $110 per barrel, that works out to $49.76. Divide that cost by the gasoline yield (19 gallons), and you get $2.62 cost per gallon. It really doesn't matter what you choose to do with the crude oil that you didn't turn into gasoline. Turn it into unobtanium and sell it for a million dollars a gram - it still won't affect the 19/42nds-of-$110 cost of the gasoline-yielding fraction of a barrel of crude.

Posted by: Tom Yarsley | September 6, 2013 6:41 AM    Report this comment

I don't see how the price of avgas is the reason for GA's decline. I started flying in 1960. At that time, avgas was 45 to 50 cents a gallon. CFI's were 4 to 5 dollars an hour. A nordo J3 cost 8 dollars an hour and a new Super Cub or Cessna 150 cost 12 dollars an hour. I was single and my weekly gross pay was 85 dollars a week. Regardless of the "official" CPI, a 1960 dollar is worth at least 10-12 dollars today. At the time, very few people had ever flown and there was a thrill and adventure in learning to fly. Also, not too many actually obtained their PPL. I received mine in 1963 and was one of about 5 issued at my airport that year. I had hoped for an airline job, but my uncorrected distance vision was not good enough. As an aside, a friend was hired as an FE on Connies by Eastern in 1963 and I believe his starting salary was $13,000. Contrast that with the salaries paid today. I don't see how you can attract young people with the pittance paid today.

Also, at that time, there was a possibility that an average person could actually afford a new airplane. In 1972, a new Cessna 172 could be purchased for $17,000. At OSH this year I asked the Cessna salesman how much a new 172 cost. He said if I were to buy now, $296,000, but the price is going to increase to $346,000 next year. This is the same 172, with minor embellishments, that has been produced for years. A piece of junk 162 is over $150,000. Also, don't buy the story that the glass cockpit adds so much to the price, I am a retired CEO of a small electronic mfg, and am certain that glass is cheaper to manufacturer than six packs and separate radios.

Posted by: Charles Haubrich | September 6, 2013 8:39 AM    Report this comment

Any refinery can make GAMI's new G100UL fuel, and no lead-isolated delivery system is required, though the issue of small volumes is still there. This could, in theory, create some price competition between local refiners where enough local G.A. volume supports it.

Posted by: PAUL HEKMAN | September 6, 2013 1:14 PM    Report this comment

Why bother with the G100UL--another "niche fuel"--when most of the fleet could use 91 octane "auto" fuel? Refineries already are "mandated" to produce "boutique" fuels--just to satisfy a bureaucrat's perceived "need." We need to get away from specialized fuels.

Though auto fuel has been around for years, and has a proven track record, many pilots avoid it--either because of "hangar flying stories" about it, or because of the auto odor, or because they are afraid that it doesn't "meet specs" for aviation fuel. All of those issues could be addressed by simply dying conforming fuel to an FAA standard fuel color--and using the same "odor" as avgas.

The new fuel could be produced by any refinery--shipped through pipelines--and the color and odor introduced at the loading rack.

Until pilots are convinced that it indeed meets FAA standards, they will continue to avoid it.

Posted by: jim hanson | September 6, 2013 2:37 PM    Report this comment

"Why bother with the G100UL--another "niche fuel"--when most of the fleet could use 91 octane "auto" fuel?"

Two reasons:

1. Although a minority of the fleet requires 100 octane fuel, that minority is responsible for the vast majority of hours flown and gallons burned.

2. A solution that does not work for all is no solution at all. It stinks of "I'm aboard, so pull up the ladder!"

I've already been victimized by an administration that obsoleted my perfectly good Loran navigator. Now they appear to be intent upon obsoleting my engine - and thus, my airplane. Where do I go to apply for my payment for the seizure of my property for public use or purpose? Is my check in the mail? Perhaps the government would prefer to furnish me with an appropriate diesel conversion kit, and the STC to go with it... Fat chance.

Posted by: Tom Yarsley | September 6, 2013 3:38 PM    Report this comment

I love flying but the way the fuel prices are out of control it's hard to fill up the plane and go flying. Just the maintenace is bad enough, and I do half the maintenance myself. So please don't tell me that the fuel prices are not the reason for the decline in flying. Happy flying if you can afford a tank of gas!!

A. Leon

Posted by: amado leon | September 6, 2013 5:22 PM    Report this comment

@Thomas Yarsley--you indicate that we should "all have one fuel". That's ridiculous--our engines were DESIGNED for different fuels--having one fuel is the "odd man out." Most of us don't need the high octane mandated by the "One Fuel Order" types--and in fact, most don't NEED it either. Taking care of 80% of the aircraft owners is a huge step.

Most of the aircraft that actually NEED 100 octane will either have a boutique fuel for those craft--or convert to diesel or turbine power. Those are the aircraft that have need for power to carry their larger weights--and the ability to carry the extra weight and complexity of diesel engines. Demanding that EVERYONE convert to a single fuel Is just wrong.

If a trusted 91 octane aviation-looking avgas existed--you would see more engines developed to USE that fuel--look at the new offerings from Rotax and Lycoming. If we could just settle down on a fuel, you might even see offerings of high-horsepower 91-octane engines being available. As it is, NOBODY is willing to do that work until a standard is set.

Posted by: jim hanson | September 6, 2013 5:53 PM    Report this comment

@ Thomas Yarsley in promotion of a single boutique 100 octane fuel--"A solution that does not work for all is no solution at all. It stinks of "I'm aboard, so pull up the ladder!"

Nothing could be further from the truth--in fact, by insisting that ONLY ONE GRADE OF FUEL be made available to satisfy the needs of a FEW--that is the selfish "If we can't include EVERYONE (whether they need it or not), we won't agree to ANY solution" attitude.

I own a variety of airplanes at my FBO (and for fun). They include Rotax 582 engines, 503 engines, Continental 85s, Lycoming o-320 (87 octane engines), O-320s and O-360s (100 octane engines), and an O-470. ALL of these have been happily running on auto gas for thousands of hours.

I also own a Cessna 206, Baron, and Cessna 414--NO autogas STC exists for these. I also sell auto fuel, 100 octane, and jet fuel in my FBO--with over 44 years in the business.

To say that "I'm on board, so pull up the ladder" is an insult. I'm vested far more heavily than a weekend flyer in finding a solution for the contrived "emergency" of loss of low lead 100 octane--but you don't see ME demanding "One fuel for everyone--whether they need it or not!"

We all wish that government would simply leave us alone--but that's not likely to happen. We need to get out in front of the issue--and making use of an existing fuel will not only cut costs and assure availability (two big issues in the debate), but will give powerplant designers a goad to work towards.

Posted by: jim hanson | September 6, 2013 6:06 PM    Report this comment

I responded to your earlier survey and I responded that I don't use autogas (it has ethanol and is oxygenated). Perhaps your survey was inaccurate in that it didn't ask the question accurately, but I would use any fuel that lowered the cost of travel if it was an authorized fuel. My Twin Comanche can use 90 octane and I would use it if it was available and approved for use (as Lycoming says that it is ok). $6 and $7 fuel has crippled the industry. Even at 16 GPH I spend $100 plus an hour to fly. I will be going on an 800 NM trip next week and I could have bought a commercial ticket for $149 each way.

Posted by: Pat Barry | September 6, 2013 7:02 PM    Report this comment

Remember that the cost of entry to aviation is a pilot's license. That is thousands of dollars. Then renting an airplane. There are other options for flying such as borrowing a friend's plane or building one but any way you look at it fuel will be a pretty small part of the whole cost. On the other hand I have seen airplane owners who pay a small fortune for the plane then complain about every dime they have to put into it afterwards. Even so I find it hard to believe that the cost of fuel would be driving the aviation economy.

Posted by: John Randall | September 7, 2013 8:02 AM    Report this comment

Jim:

Please re-read my comments carefully. I never advocated for one fuel - I advocated for one solution. As long as no current user of 100LL is orphaned by its banning, I'm fine with one "replacement" fuel or ten.

I did say that 91UL does NOT comprise a solution to the obsoleting of 100LL - because it leaves the biggest users of 100LL without a solution for them. (Full disclosure: "them" includes me.) I can admire your anger. But you're arguing with a ghost, because I never said "one gasoline for all."

I assert that if the government obsoletes my engine (and thus my airplane), they owe me just compensation. I don't think that I'm being unreasonable in that regard.

Posted by: Tom Yarsley | September 8, 2013 7:53 PM    Report this comment

"Remember that the cost of entry to aviation is a pilot's license." That's for newbies. For existing pilots, that cost is not a factor.

"I find it hard to believe that the cost of fuel would be driving the aviation economy." Hard to believe or not, I've spoken to several dozen pilots who have stopped flying for exactly that reason. Mechanics tell me of a high count of airplanes that no longer are being annual'd. My friends in ATC tell me of reduced traffic counts. The economy is tough; the pilot population is aging. High fuel prices are a contributing factor to reduced flying.

Posted by: Tom Yarsley | September 8, 2013 8:00 PM    Report this comment

The decline in GA operations is due to operational costs having increased more than 5 or 6 fold from 1980 and household mean income having increased only 3 fold. Simply, It is all expensive and there is less cash. The market is shrinking - we need a desperate and forceful national grass-roots pilot start program and get the young in the air. Sportys and EAA have the correct approach - and I am willing to contribute. The more people flying the less expensive it will get.

Posted by: Rafael Sierra | September 9, 2013 5:09 AM    Report this comment

The decline in GA operations is due to operational costs having increased more than 5 or 6 fold from 1980 and household mean income having increased only 3 fold. Simply, It is all expensive and there is less cash. The market is shrinking - we need a desperate and forceful national grass-roots pilot start program and get the young in the air. Sportys and EAA have the correct approach - and I am willing to contribute. The more people flying the less expensive it will get.

Posted by: Rafael Sierra | September 9, 2013 5:09 AM    Report this comment

For the new pilot, assuming that they get past the cost of initial training, the cost of fuel may be hidden in the rental cost of the aircraft that they fly; however, they may choke on the "minimum daily hours" (typically 3) if they decide to actually take one somewhere. So fuel costs lurk in the background especially if their goal is hour-building for a flying career.

Even if they somehow separate fuel costs through club or other aircraft ownership, the fuel cost most likely will have a strong influence on the type of aircraft they fly and the missions they attempt. Many middle-income earners will not really see how even an LSA will be a good choice in the family budget for leisure dollars in the foreseeable economic future.

For us older pilots who started flying 50 or more years ago, the impact of fuel costs has been a little like "boiling the frog'. Every year we have accepted a degree of inflation in the cost/gallon. Some of us have been driven to partially satisfy our thirst for hours in the air by flying somewhere to get cheaper fuel, justifying the mission by calculating how much was save.

Those of us that flew the more thirsty birds like the C210 may have finally realized that with all of the other costs and restrictions on aviation, the fuel bill at the end of a cross-country leg simply represented too much of a damper on any residual fun.

Fuel costs are the most visible component in the variable costs of flying. Annual inspections, tie-down or hangar fees, insurance etc are fixed costs that must be met if you own or share a plane. They are essential to being in the game at all so you pay up. Then, using the plane is optional. That is where the fuel costs can have their greatest impact in restricting flying hours.

A lot of us grey-beards are also on essentially fixed incomes. Retirement means cutting back. This is a point where aviation as an activity goes on the block.

In the end, like the frog, you jump, or not.... There will always be those that can afford whatever the fuel costs. Whether there will be enough of them to support a viable GA presence seems somewhat in doubt to me at least. Whether Redbird's customer base will be stacked with such people I expect remains to be seen.

Posted by: David MacRae | September 10, 2013 12:18 PM    Report this comment

Hey, I find a lot of interesting info on the Internet....like this thread which tells me there is only 9 cents worth of crude oil in a gallon of gas. Nine cents is 4.4 ounces of crude oil (assuming a $110 barrel). And the other 123.6 ounces comes from....???

Cool. When I was young the story was the 100-mpg carburetor that General Motors had developed but would not market because it would cut into their car sales. That also made no sense, either from a technical nor a financial standpoint. How can people believe this stuff??

Posted by: John Wilson | September 13, 2013 10:39 PM    Report this comment

I've been thinking about fuel prices for a while (and complain about the prices as much as anybody) and don't know why that should be the deciding factor in how much we fly. The ratio between avgas and auto gas doesn't seem to have changed that much. A recent Mac MacClellan column related when fuel prices were $.35/.60. A tenfold increase in both would give you $3.50/6.00, pretty close to current averages, yet we haven't stopped driving as much as flying. I guess it relates to how we view driving vs. flying as necessities. The prices of airplanes, on the other hand show a substantially greater increase as indicated in Charles Haubrich's comment. Then, of course, there is the general stagnation or decline in middle class incomes.

Posted by: John Worsley | September 16, 2013 1:46 PM    Report this comment

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