Chevron’s General Aviation 'Aligns its Assets with Supply Strengths'

Responding to an inquiry from ANN late Tuesday, Chevron General Aviation General Manager Keith Sawyer has responded with an official statement on their behalf. ANN's inquiry was necessitated by the receipt of reports and documents alleging that Chevron was poised to pull out of a significant part of the GA fuel market and cut a number of programs that benefitted the industry.

Couched as 'part of its downstream restructuring efforts' Chevron confirmed changes to its GA business 'to adapt to changing market conditions and to successfully compete in the marketplace.'

“After an extensive review of our General Aviation business, we are changing our business model,” said General Aviation General Manager Keith Sawyer. “We are aligning our aviation marketing assets with our manufacturing (refining) system to focus on the areas where our supply reliability is strongest.”

Effective June 1, 2010, General Aviation will only market Chevron- and Texaco-branded aviation fuels in the following states: Alabama, Arizona, California, Florida, Georgia, Idaho, Louisiana, Mississippi, Nevada, Oregon, Texas, Utah, and Washington.

Chevron states that it will, "continue to be a leading manufacturer of jet fuel and aviation gasoline but is changing its branded distribution channel to reduce costs while continuing to serve the aviation industry. Chevron will utilize its major distributor, Hiller/Air Petro, to sell aviation fuel to the general aviation market."

“We are pleased that Hiller/Air Petro will continue to represent the Chevron and Texaco brands. This organization is well-established with a team of knowledgeable, experienced aviation professionals who offer a superior level of customer focus,” stated Sawyer.

General Aviation will withdraw from marketing Chevron- and Texaco-branded aviation fuels in 27 states (approximately 200 locations). These states are beyond the distributive reach of Chevron’s refinery system. The planned market withdrawal will be completed by November 15, 2010. Chevron states specifically that, "These actions have no impact on product supply. Aviation customers should not experience any impact as a result of this transition."

Industry experts voice concern about this change in business strategy, noting that GA fuel supplies are already seeing constraint and increased pricing that could signal "significantly higher fuel prices this summer. One analyst suggests that "$8-$9 gallon fuel prices are not out of the question if this supply and pricing pressure persists and other sources of supply are not made available." Other analysts insist that the future of GA fuel supplies rests on the development and certification of alternate fuels that can be run without extensive modification to the current GA fleet... and that several programs do exist to meet that spec IF the industry and regulatory entities step up to see these programs through to commercial reality and availability.

ANN will update the story as data and information becomes available.

FMI: www.chevron.com