Rani Awad’s fuel start-up has made rapid progress in its first year, establishing relationships in some difficult operating environments and now he is targeting the business aviation market
Launching a new fuels company is not for the faint-hearted. This is a tremendously competitive space, selling a commodity product that is highly price sensitive. A new jet fuels supplier needs good partners and it needs to get some scale fast. It also needs to find some unique selling points and add value to win new business. Rani Awad, founder and chief executive of Dubai-headquartered Atlantic FuelEx, has managed to tick all these boxes and a few more since launching his company in July 2011.
With commercial airlines his mainstay, he is now making inroads with business jets. Already he can cite Kuwait Amari with the presidential fleet and NetJets Middle East as customers. In the world of FBOs, Harrods Aviation, Sky Services, Rus Aero and Signature Flight Support all benefit from his assistance.
Awad already had deep experience of the jet fuel sector before setting up Atlantic. Formerly European manager with Jetex Flight Support, he was able to draw on a network of relationships across the industry that stood him in great stead in winning initial contracts for his business. He reckons that being based in Dubai is also a huge positive for the new start-up.
“Getting a new business off the ground is difficult anywhere, but you would be hard pressed to find a more supportive environment than Dubai. One of the great things about Dubai is that you have ready access as a new business to all the sources you need to set up your operation,” he says. The venture was well supported from the start by the Emirates National Bank, and the business had a good credit line from its major business partners, such as Chemoil.
From the outset, Awad’s aim was to build a fuels company that could provide a wide range of solutions for customers, rather than simply on fuel sales.
“My vision for the company from its inception has been to sell solutions rather than a product. The essence of what we do is to buy fuel from A and sell it to B. That doesn’t give you a lot of margin, so value-added services are absolutely key to this business,” he says. “We are focused on helping the suppliers at some 3,600 airports worldwide to get the product quickly when they need it. Plus we provide them with a range of services to analyse their fuel usage and costs as well as with credit services.”
Of particular importance to customer growth is the company’s position as the first supplier in the Middle East to use the Microsoft Office 365 online system which permits customers to monitor prices, manage accounts and place orders.
Also key to Atlantic Fuel’s growth through its first year of business has been scale. This meant being prepared to supply into difficult markets, a challenge Awad relished. Atlantic FuelEx owns 500 fuel trucks fulfilling the logistics of aviation fuelling from the borders of Afghanistan to all the country’s airports and military bases.
The company has also moved swiftly to build an extensive network of relationships across Africa. “We now have direct contact with 80% of the suppliers in Africa, plus the military bases there,” Awad says. Atlantic FuelEx provides military bases across the globe with about 80% of their requirements for JP 45, a high-performance jet fuel mainly used by the military. “Our relationship with military bases has grown extremely rapidly. For example, Atlantic FuelEx recently set up an agreement with the US Government to supply fuel to all the military bases outside the US,” he says.
My vision for the company from its inception has been to sell solutions rather than a product
One of the major value adds that Awad looks to provide in Africa, for example, is to facilitate the use of fuel card schemes across Africa. “If you hold a fuel card as a pilot at London Heathrow, you will have no problems getting the job done. But at many African bases, and at numerous other places around the world, fuel sales are done on a strictly cash basis. We are working very hard with FBOs and incumbent fuel services companies to get them to accept cards from our major fuel partners,” he says. Awad is looking to get the cards accepted on military bases.
Atlantic FuelEx has also struck a deal with AeroCard, which specialises in the design, implementation and management of commercial billing and payment systems, and which entered the aviation market back in 1980. Atlantic FuelEx will be partnering with AeroCard for a programme to the Middle East.
Awad says that he has been delighted with the successes the company has achieved in its first full year of business. This November the company will inaugurate a new operational centre in Dubai and plans are already well in hand to add three more representative offices, in Miami, Istanbul and Stuttgart. “We are underscoring the fact that we are truly a worldwide fuels service company with a dedicated 24×7 team well able to support our customers wherever they happen to be,” he says.
Atlantic has also forged a strategic partnership with IATA to provide the organisation with its fuel tendering menus. “We analyse the tender and look to offer them a comprehensive fuel package at selected airports,” Awad says.
In the tendering process, Atlantic’s reach in Africa, Russia and the Middle East gives mainstream fuel partners more options to provide complete packages to their large carrier clients. “For example, BA might have a tender in Kisumu and Nairobi in Kenya, and a fuel supplier might only have the ability to supply in Kisumu. We can provide facilities in Nairobi and the joint package can win the contract,” he explains.
Another major plus is the ability to settle in local currency. “Take an airline that has to settle in dollars. We have a network in most African countries that enables us to settle in the local currency. By using us, the airline can then settle in local currency and avoid some very painful foreign exchange losses. The currency difference can amount to as much as 17 or 18 cents on the dollar and total annual savings for one of our carrier clients has already reached in excess of $2 million in the course of a year,” he says. The FX risk in fuel is huge and in the majority of countries across Africa paying in local currency will generate substantial savings, providing Atlantic with yet another value add service to provide to clients.
“We are growing at a very brisk pace and our global reach is winning us contracts around the world. However, we are also very tightly focused on maintaining the highest possible standards of service for clients and at developing the breadth and depth of our service offering. 2013 promises to be at least as exciting as 2012 as we continue to win customers and extend our global network in this extremely challenging market,” Awad concludes.