Fuel costs spur airlines’ cuts in usage

Bottom line more of factor than EU emissions fees

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Even before the European Union recently hit airlines with a controversial new emissions fee on international flights, carriers already were pushing to reduce their carbon footprints in a bid to save money.

“Believe me, the airlines have plenty of reasons to make their planes more fuel-efficient,” Boeing spokesman Tim Neale said. “Aviation has many incentives, not just to be good citizens, but we have plenty of economic incentives.”

The airline industry’s focus on reducing its fuel-usage rates comes as prices are skyrocketing. Fuel accounts for nearly one-third of an airline’s expenses, according to Robert Herbst, founder of the industry website www.airlinefinancials.com, up from about 14 percent a decade ago.

“Fuel is the largest cost for any airline,” said Steve Lott, a spokesman for the industry group Airlines for America. “There is a huge incentive for airlines to reduce their fuel burn and become more efficient.”

The pressure only intensified when the European Union expanded its Emissions Trading Scheme (ETS) to include airlines at the beginning of the year. Now, carriers are charged for their emissions on flights to and from Europe, including large portions of flights flown outside the region’s airspace.

The plan requires the industry to cut its carbon dioxide emissions average from the 2004 to 2006 period by 3 percent in 2012 and 5 percent in 2013. Carriers, who initially would receive 85 percent of their emissions certificates free of charge, would have to bid for the rest.

U.S. carriers argue that Europe’s plan, which also was opposed by the Obama administration, is unnecessary. Airlines point out they have improved fuel-efficiency by 110 percent since the industry was deregulated in 1978, and the industry has committed to annual fuel-efficiency improvements of 1.5 percent through 2020, at which point it plans to cap emissions.

“The EU has ignored the long history of significant improvements that the industry has made,” Mr. Lott said. “We’re well down the path of reducing our environmental footprint. I think it’s important to recognize how far we’ve come.”

In an effort to cut fuel costs, carriers are flying lighter airplanes, and improving the air-traffic control system so there are fewer delays and more direct routes.

Fuel efficiency is influenced by the weight of the plane.

“The weight comes into play, because the lighter an aircraft is, the higher it can go,” Mr. Herbst explained. “The higher altitude they can get to, the less fuel they burn. The air is thinner up there, so [the plane] just doesn’t consume as much fuel.”

Airlines are turning to manufacturers such as Boeing and Airbus to design planes that weigh less.

“They want to seize any opportunity they can to make their planes more fuel-efficient,” Boeing’s Mr. Neale said. “That’s what the customer wants. They want products that lower their costs.”

To that end, Boeing is building its 787 Dreamliner to use 20 percent less fuel than the version it replaces. The company’s 737 MAX is 10 percent to 12 percent more fuel-efficient than its predecessor.

American Airlines, meanwhile, is expecting a large order of new aircraft from Boeing and Airbus to be about 35 percent more fuel-efficient than its current fleet.

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