March 03, 2008

Fuel Tax At ORH

One month before Allegaint's last flight, August of 2006, the Airport Commission voted to rescind the City of Worcester tax on fuel sold at ORH. Click here for the board minutes. Specifically under 6)

The Worcester Regional Airport Commission, in an effort to encourage more Commercial and General Aviaiton activity at the airport, hereby rescinds the vote of August 15th, 1989 which recommended to the City Manager the adoption of Mass General Laws 64J section 13 relative to imposition, payment, collection and distribution of a tax on the sale or use of aircraft fuel in the City of Worcester and recommends to the City of Worcester that he request the City Council to do the same at their next meeting.

Before the issue could be brought up to the City Council, Allegiant was gone and I do not believe the issue was ever brought up to City Council. I assume then the the City of Worcester still charges a tax on the sale or use of aircraft fuel in the City of Worcester? One can only assume that based on fact this was considered the month before Allegiant left ORH, that it must have been an issue with Allegiant. Can anyone enlighten us as to what the rate of tax is?

Lastly please note this interview with Allegiant CEO Maury Gallager in Flight Global. In particular this comment:

That new approach must also apply to fuel services. "Fuel is a pain in the ass," says Gallagher, but it represents 40% of Allegiant's expenses. "So I'm in the fuel business." Airports should not "outsource and forget" fuelling services. "A monopoly fueller is a serious competitive handicap. We literally have a number of cities we won't go into because of this. They are not just making a living off us they are making a killing off us, and we are just not going to do it."

At ORH we have a monopoly fueller, Swissport, and the CEO of Allegiant not only calls it a "serious handicap", but "we won't go into" cities like these. Now add to the fact that fuel represents 40% of the Allegiant's expenses and City of Worcester added their own tax on the fuel, I think it is pretty clear why Allegiant left ORH.


Anonymous said...

very interesting article WW..I am of the opinion that the heavy hitters are just not looking at the City of Worcester like the City of Worcester see's is fairly evident that Allegient got sold on Worcester some how..perhaps like me, and so any others who have plunked down money and roots only to be greatly disappointed with the direction or should I say lack of direction and because they are heavy hitters they have been able to take the loss and move on the supermarket on Grafton Street...

Anyway, very interesting read WW..I appreciate the efforts you put in to keep this blog updated on such important subjects

Anonymous said...

I think paulie hit the nail on the head. Allegiant shocked everybody and said "we're as mad as hell and we're not going to take it anymore" and pulled up stakes.

If fuel was an issue then, imagine what it must be now.

Mr Gallagher from Allegiant indicated one of the hideen costs. What would other costs be and could we allure other airlines to Worcester if the costs could be lowered or subsidized if fuel could not be.

My two cents (after inflation)

Bill Randell said...

Herein lies the problem. The guys, and girls, from Allegiant are very smart. They focus on secondary cities like ORH and they left after nine months.

If you were an airline considering ORH, would you take a chance on ORH when Allegiant could not make money here?

We need to follow the path started by Stewart 10 years ago and now by MidWay today. Privatize ORH. Put together and RFP and let the world know "Airport For Sale (or Long-term Lease)".

Anonymous said...

Again, let us not forget that our then supposedly pro business mayor, Mr Murray, basically kicked Allegiant in the +++ on the way out the door.

Fuel supply/sales at ORH, unfortunately like Cable TV service for the city, has to be provided by a monoply supplier. There is no room, financially for more than one supplier or player, because they would just cannibalize each other with duplicated expenses and both would eventually die off. Could you imagine two suppliers at ORH now.........I mean who are they going to sell fuel to?

Even if Allegiant went into the futures market and purchased fuel for delivery at a future date, they still need a Swisssair to deliver the fuel to them.

I cannot think of any way to overcome this handicap, short of the city subsidizing fuel costs........which goes agaisnt some basic principles that I believe in.

Of course we could always take some of that community block grant money that comes from Washington and divert it from canals and low income housing and subsidize ORH fuel costs or we could make the Hand It Over Theatre ante up the $200,000 fee waiver that was granted to them (a private business) and use it to subsidize fuel costs (and air travel) which will benefit a much larger group of people than the theatre ever will. Unfortunately, a photo op of a pol standing beside a jet being fueled, just doesnt have any legs.......unless you're Joe Kennedy and his $600,000 salary from Citizens Oil Company (a non profit). Hey about a Citizens Oil equivalent for ORH fuel to beneift the Worc. area flying public??

Does anyone think it would do any good to send to the city council a list drawn up by the blogging community here that PRIORTIZES the issues facing Worcester that the council s/b addressing? No one down there will tackle any of the real issues facing the city b/c it means making hard decisions.

Saw the pothole truck this morning actually using hot ashpalt to patch a street that was last paved in 1979. Oddly enough there was no police detail with the truck and the 2 DPW laborers. Now if that was Paulie's Pajama Pothole Patchers Platoon doing the work, 2 police detail officers would be mandated. Inconsistency? Discrimination? Legalized Extortion?

Anonymous said...

"Can anyone enlighten us as to what the rate of tax is?"

I bet a call to Swissport would answer that question. They're the people collecting it.

Anonymous said...

The Pillsbury Doughboy (aka TMurrs) shows his amazing business acumen:

Also, I flew into Barnes-Westfield Airport this weekend. Amazing service. Their terminal is maybe 90 days old and they have two FBOs. Yes, TWO. I even ran into a fighter jet pilot hanging out in their bar/restaurant. Yes, RESTAURANT. I was going to ask for a rental car when the FBO guy told me that I could borrow one of theirs! They even offered me some pizza. Don't even get me started on how courteous the Barnes tower was... they couldn't have been nicer!

BAF > ORH in my opinion as a GA pilot.

No more excuses for the airport management. If BAF and CEF can do it, I want it to happen at the hillport! It is embarrassing that little cities like Chicopee and Westfield are showing up Worcester big time.

Anonymous said...

Oh, and MORON ALERT from the TAG article I posted:

"District 1 Councilor Joffrey A. Smith said Allegiant’s pullout should not be viewed as a negative reflection on Worcester Regional Airport.

Instead, he said, it reflects the lack of a quality partner the city had in Allegiant."

Anonymous said...

"It is embarrassing that little cities like Chicopee and Westfield are showing up Worcester big time."

take a ride up to Haverhill this is becoming the Newbury Street of the Merrimack Valley...

Anonymous said...

Trying to figure out some simple math for why Allegiant may have left.

If you type in Worcester Airport fuel it will bring up an Airnav site and gives a current fuel price of $5.99 since Feb 24,2008 for two different types of fuel.
From jahns statement of Allegiant using 2000 gal of fuel X $5.99= $11,980.

I think Allegiant charged about $79 a flight one-way if I remember the ads correctly---divide that price into $11,980= 151 passenger needed per flight.

I'm sure fuel was cheaper over a year ago and my math may be simplied, but 151 passengers each flight for a Florida destination seem like alot.

Is there an easier way to check other airport fuel prices to compare

my two cents (after inflation)

Bill Randell said...

My Two cents:

I am not even sure if the planes that they flew seated 151 passengers.

Think it was more in the 125 passenger ranges.


Anonymous said...

I thought their prices were more like $99 one way.

I would speculate that being the biggest fish in Swissair's pond, that Allegiant may have rec'd some quantity discounts on the fuel??

Even at $99 per head times 125 heads, that's still only $12,500 at 100% capacity and Allegiants load factor, depending on who you believe, averaged somewhere around 80% to 90%

Then of course there are a few other minor items like pilot & crew salaries and benefits, landing fees, and those birds do run millions of dollars a piece before you even fuel them or staff them or repair them, so they have debt service too. Afterall, unlike the citys snow removal budget, which was underwater by mid december this season, one has to consider ALL the costs when they have to report back to the Allegiant CEO and Board of Directors. Allegiant doesn't have a rich Uncle Massport and they dont have NINJA mortgagor status, so they dont qualify for "Foreclosure Counseling" either.

Anonymous said...

"Allegiant doesn't have a rich Uncle Massport and they dont have NINJA mortgagor status, so they dont qualify for "Foreclosure Counseling" either."

root canal and a broken tooth from a fight 20 years ago that finally got me taken out yesterday..$1250.00...all I could think of as I was writing the check was the huge amount of folks around me in my neighborhood who would have gotten this needed work done for nothing to to them:>)

Anonymous said...

Allegiant's February numbers...

Press Release Source: Allegiant Travel Company

Allegiant Reports February 2008 Traffic
Tuesday March 4, 9:28 pm ET

LAS VEGAS, March 4 /PRNewswire-FirstCall/ -- Allegiant Air, LLC, a wholly owned subsidiary of Allegiant Travel Company (Nasdaq: ALGT - News), today reported preliminary passenger traffic results for February 2008. Allegiant Air, LLC expects to report February 2008 average fuel price in the middle of this month.

Scheduled Service

Feb. 2008 Feb. 2007 Change
Passengers 326,159 204,593 59.4%
Revenue passenger miles (000) 301,189 194,581 54.8%
Available seat miles (000) 348,678 240,446 45.0%
Load factor 86.4% 80.9% 5.5 pts
Departures 2,580 1,752 47.3%
Average stage length (miles) 908 926 -1.9%

Total System*

Feb. 2008 Feb. 2007 Change
Passengers 357,802 229,202 56.1%
Revenue passenger miles (000) 330,398 229,276 44.1%
Available seat miles (000) 393,957 287,853 36.9%
Load factor 83.9% 79.7% 4.2 pts
Departures 3,119 2,079 50.0%
Average stage length (miles) 852 933 -8.7%

*Total system includes scheduled service, fixed fee contract and
non-revenue flying.

About the Company

Las Vegas-based Allegiant Travel Company (Nasdaq: ALGT - News), is focused on linking travelers in small cities to world-class leisure destinations such as Las Vegas, Nev., Phoenix, Ariz., Fort Lauderdale, Fla., Orlando, Fla. and Tampa/St. Petersburg, Fla. Through its subsidiary, Allegiant Air, LLC, the Company operates a low-cost, high-efficiency, all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel related services. ALGT/G

Note: This press release was accurate at the date of issuance. However, information contained in the release may have changed. If you plan to use the information contained herein for any purpose, verification of its continued accuracy is your responsibility.

For further information please visit the company's investor web site:

Reference to the Company's web site above does not constitute incorporation of any of the information thereon into this press release.


Source: Allegiant Travel Company

Harry Tembenis
Worcester, MA

Anonymous said...


The airport has a fine FBO

Listed as 5 star concierge service in the Telegram and Gazette

Never experienced a problem with my experience at the airport.

I do agree it could use a restaurant

Anonymous said...

It is feasible to have more than one service provider/FBO. Look at New Bedford Airport, they have 3.
The land bid they proposed could very well have been pruchased by another company with the intention of providing full aviation services.


Anonymous said...


Wouldn't another fuel business create unecessry competition?

From the sound ofit the airport barely can provide business for one.

In the end, wouldn't it be airlines and other pilots that would be hurt by he price wars?
Maybe maybe not. If New Bedford can support three in this economy, maybe it brings in more planes!

my two cents (after inflation)

Anonymous said...

I usually get a better deal at surrouding airports, regardless of any fuel tax.

I would fly more into WRA if they positioned themselves as a friendly airport. I went into Northampton after the new management took over and a big sign says "The Home of Friendly Flying". They took great care of me and I would go back there if I had a reason. The previous owners left much to be desired.

Granted that 7B2 is a private field, but WRA needs to go through a similar transformation.