BIA fuel model changes approved

Posted May 27, 2009, at 11:45 p.m.

BANGOR, Maine — City councilors approved a series of orders on Wednesday that would create an open-access fuel model at Bangor International Airport, providing airline carriers with more options and potential cost savings when buying fuel.

The changes, which were unanimously supported by staff and councilors, also would establish Irving Oil as the new supplier of commercial fuel at BIA, replacing Exxon Mobil.

Exxon Mobil, which had an exclusive contract with BIA for nearly 40 years, will still provide fuel through its subsidiary, Western Petroleum, for the airport’s general aviation terminal.

Finally on Wednesday, the city agreed to buy Exxon Mobil’s assets at BIA — namely 13 fuel trucks — for $1.1 million in order to facilitate the new open-access model.

“We think the agreement with Exxon is fair given their assets,” City Manager Edward Barrett said Wednesday prior to the City Council meeting.

Airport Director Rebecca Hupp said earlier this week that the agreements approved by the City Council represented a lot of hard work and create a model that is the best of all worlds. Barrett and city councilors praised Hupp and other BIA staff for their efforts.

“I know this went smoothly tonight, but it really took a bit of work,” Councilor Geoffrey Gratwick said.

The changes will go into effect July 31.

Earlier this year, Exxon Mobil told the airport that it would not renew its contract, largely because of a recent change in the state’s unitary tax law that required the fuel provider to pay more taxes. The fuel giant did offer to transfer that exclusive contract to Western Petroleum, one of its main subsidiaries. Instead, airport officials and city staff began discussing other options and quickly settled on the open-access model, which allows customers of BIA to find their own fuel at their own negotiated price.

Airline carriers view an open-access fuel model favorably because it creates competition among fuel suppliers and therefore lowers prices, according to Hupp. Carriers flying in and out of BIA would be able to buy their own fuel and store it at the airport for a fee or buy from Irving, the airport’s new supplier of record. BIA has enough storage for 3 million gallons of fuel, which Hupp said is more than enough to accommodate its customers and store fuel for sale by the airport.

While Irving will be the supplier for commercial aircraft, Exxon Mobil, through Western Petroleum, will remain the provider for private and corporate aircraft. Hupp explained that keeping the Exxon Mobil name was important for that segment of BIA’s business, which accounts for 1 million gallons of fuel sales annually.

erussell@bangordailynews.net

990-8167

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