As I was watching CNN today, I came across a report on what airlines are doing to remain in business. More than 50% of an airline’s budget goes towards fuel, and 3 digit rising fuel prices are sending airlines on a direct path to bankruptcy. Airlines are doing anything they can to lose weight on an aircraft. From shaving a couple of grams on eating utensils to fine-tuning fuel estimates for each flight, every effort becomes more and more important as fuel prices make their way onto the center spotlight in what will soon become a transportation meltdown. Speaking about fine-tuning fuel estimates, I already spoke about this in a previous post.
But lets face it, while reducing the weight of your aircraft by 1% may save you hundreds of thousands of dollars, a fuel price increase of 1$ will destroy any efforts made to lower the spending. In other words, weight reduction alone will only push back the losses, but there’s a limit to how much one can reduce the weight on an aircraft. Aircraft are already as lightweight as they can be when they are initially designed. Lightweight means a lower fuel consumption, which is something that independent of the fuel situation at the time was always an important aircraft specification. What the airline industry needs is not punctual solutions based on stressing what has already been done, but a new and revolutionary method of approaching the business. Technological breakthroughs apart (bio fuels seem to be a good idea when it comes to saving the environment, but when it comes to saving money they are not nearly at a level where it would make a difference) the way one views airline travel is important. I am a strong supporter of the Southwest method of business, maintaining a uniform fleet, flying out of secondary airports and maintaining a route system based around taking people from where they are to where they want to be (a point to point system instead of a hub-based system, taking advantage of the routes with the most demand.)
Surely the financial reports of the airlines will show what’s being done right and what’s being done wrong. The International Herald Tribune reported on American Airlines’ and Delta’s Q2 reports, showing problems for both airlines. Both of these airlines maintain a hub-based system and fly a wide variety of airliners. Not surprisingly, Southwest Airlines is one of the few major American carriers that consistently reports profits.
Other things that could be done to improve the airlines’ financial position, I can think of a few:
- Promote more agreements such as the EU-US Open Skies agreement, opening up more airports to competition and ending all exclusive rights that some carriers maintain in airports for specific routes.
- Renovate fleets with newer and more fuel-efficient aircraft. What once seemed a stupid idea due to the large amounts of money needed now seems much more plausible seeing the current price of a barrel of oil.
- Improve ground handling and passenger loading. I recently read about a new system by which instead of loading the aircraft in rectangular blocks based on seating rows, the loading would be done with triangular sectors. The improvement in time is significant enough (around 20-50% if I remember correctly) to merit a further investigation by the industry.
- Air traffic control needs to be renovated, flight paths have to be reviewed and ground taxi procedures have to be changed. Too much time is lost on ground and in traffic patterns by aircraft. As a common saying goes, “a plane on the ground makes no money.”
- Too much pressure is placed on aircraft manufacturers such as Airbus or Boeing. Most people don’t know that the fuel economy of an aircraft depends mostly on the engine, which is not made by the same companies. The major aircraft engine companies (Pratt & Whitney, General Electic, Rolls Royce) need to begin to invest large sums of money into the fuel efficiency of their engines.
