Editorial

A business deal has been struck that will create the largest chain of fixed-base operations in the nation. Butler Aviation is merging with Page Avjet Corporation. Butler will remove its shingle from its 20 FBOs, and Page's will go up in its place. When the merger is completed, Page will operate some 38 FBOs as well as several former Butler airline refueling franchises.

The new super-size Page FBO network can mean good things for pilots. For one, there is strength in Page's numbers; each FBO location is made stronger by its inclusion in the Page family. Also, Page has a good reputation for service while Butler has long been held in low regard — although under its most recent management, headed by William W. Boisture, sincere and effective measures to improve service were taking hold. Pilots can expect to see consistently good service at the various Page locations, including the former Butler FBOs.

One immediate benefit of the merger may be the disappearance of Butler's ramp fee program. Early this year, Butler began charging transient pilots a service or ramp fee if they do not buy fuel. Prior to the merger, the service fee program was in effect at seven Butler FBOs: Baltimore-Washington International (BWI), Chicago's Midway and Merrill C. Meigs, Louisville's Standiford, San Francisco International, La Guardia (LGA), and Chicago-O'Hare International (ORD). (The fee had been in effect at LGA and ORD since 1990.)

At BWI, for example, a Bonanza pilot who parks on Butler's ramp but does not buy fuel is charged a $10 service fee. This is in addition to an $11 landing fee and a $10 parking fee if the airplane sits longer than three hours. The service fee is waived if the pilot buys a minimum of 20 gallons of fuel. If the Bonanza's tanks won't take 20 gallons, the fee will be waived if the pilot at least asks that the tanks be topped off. The service fee for a heavy corporate jet is $125. It is waived if the pilot buys at least 250 gallons of fuel.

Butler said when the service fee program was announced that it would balance the imposition of the fee by lowering fuel prices. True to its word, the company has twice lowered fuel prices at BWI, from a high of $2.40 a gallon to $2.29 a gallon.

Imposing a service fee on the one hand while lowering fuel prices on the other is what Butler calls "unbundling." It's a fancy word for stripping the cost of providing various FBO services out of the price of a gallon of fuel. Why "unbundle" fuel prices? Butler argues that it must recoup the cost of providing free FBO crew and passenger services — line attendants, red carpets on the ramps, posh lounges, clean restrooms, ice, crew cars, telephones, and flight planning and conference rooms — through fuel sales. Yet only 55 percent of transient pilots who stop at Butler FBOs buy fuel, so they are the ones who actually pay for amenities used by all.

Okay, that sure seems unfair to those pilots who are buying the fuel, but it's always been that way. Why change now? Butler's answer is that business is on the decline. Traffic is down, and many of those who are flying are doing it in ever more fuel-efficient aircraft. Add to that the increasing cost of doing business, in particular the cost of complying with federal regulations regarding the storage and handling of fuel, and you've painted a picture with a lot of dark clouds and no silver lining. After much study and consultation with everyone affected, including pilots — Boisture met with AOPA President Phil Boyer on the issue — Butler went ahead with the great unbundling.

Needless to say, it's a controversial fix to the problem of declining revenues and increasing costs. Very few FBOs have followed Butler's lead. Competitive pressures are an obvious impediment. If an FBO imposes a service fee, its competitor across the field will trumpet the fact that it has not. That hasn't been much of a problem for Butler because it is the only FBO at most of the airports where the service fee is in effect. Also, many FBOs sell fuel to more transients than does Butler.

One can understand and have sympathy for Butler's predicament. Any business must be given a chance to make a reasonable return on its investment, and Butler worked hard to make its service fee program as inoffensive as possible. At the same time, it has to be recognized that a service fee is unfair to those pilots who neither asked for nor need a lavish FBO and its services. A parking spot for the day, a telephone, and perhaps a bathroom will do just fine, thank you. And one wonders if the service fee would even have been necessary if in the past Butler had fostered a better relationship with its customers so that more would have bought fuel.

We'll soon find out what the future holds for FBO service fees. The Butler name was due to go away in September. Page has said it doesn't plan to invoke the fee program — when it took over the Butler FBO at LGA in June, before the merger took place, it immediately eliminated the service fee — but company officials haven't completely ruled out the possibility of imposing them if times get worse.