- The Washington Times - Tuesday, June 6, 2006

PARIS (Agence France-Presse) — Less water in the lavatories and more frequent washes for the aircraft — these are two small steps being taken by some airlines to cope with a big increase in fuel costs.

Airline companies are exploring every way of compensating for a surge in the price of fuel in the past two years in line with the rise of oil prices.

This was one of the main messages to emerge from an International Air Transport Association conference of 265 world airlines.

Participants in the conference that ended yesterday agreed that the air-transport business must learn to live with, and overcome, high fuel costs.

The vice president of Shell Aviation, Xavier Le Mintier said yesterday, “The price of a barrel of oil will remain high. Most analysts expect it to be $60 to $70 per barrel to the end of 2010.”

The average price of a barrel of oil this year is expected to be $66.

IATA calculates that this means that the bill for fuel for the air-transport sector will amount to $112 billion or triple the figure it was in 2002, or 26 percent of operating costs.

The airlines are continuing to put downward pressure on other costs, which they have cut by 13 percent over five years.

Among the ways available to contain the fuel costs are renewal of existing fleets of aircraft with more fuel-efficient planes. The chief executive officer of German airline Lufthansa, Wolfgang Mayrhuber, said: “The new planes which are available offer serious opportunities to reduce our consumption.”

The European aircraft manufacturer Airbus said that its A380 model used 12 percent less fuel to carry 35 percent more passengers while reducing operating costs by 20 percent.

Other methods being used by airlines are to reduce the amount of weight carried and to reduce air resistance caused by friction by means of regular plane washes.

The chief executive of Mexicana airline, Emilio Romano, said, “We changed carpets, we took off some water from lavatories and took away dents from aircraft.”

IATA is also working on obtaining optimal use of airline routes.

IATA Director General Giovanni Bisignani said, “One minute saved on each flight amounts to a saving of $4 billion per year.”

IATA is seeking agreement from China for a new route to reduce the time of the journey between China and Europe by 30 minutes.

The organization also advises airlines to limit their exposure to changes in the price of fuel by hedging their positions on futures markets.

There is even talk of airlines clubbing together to buy fuel. The chief executive officer of Malaysia Airlines, Idris Jala, said, “It might be a good idea to suggest IATA forms a buying-house and get volume discounts.”

However, this idea might be hard to get off the ground owing to competition and antitrust policies. Mr. Bisignani said IATA could not consider such a proposal.

To cut other costs, IATA is putting the priority on replacing paper tickets with electronic booking arrangements.

By the end of 2007, the paper ticket should be an item of the past. This alone is estimated to save more than $3 billion per year. An electronic ticket costs $1, and its paper parent $10.

Nearly half of all tickets sold are in electronic form, but only five companies have switched entirely to electronic tickets .

Among other cost-cutting measures in store are self-service check-in by passengers and luggage identification by radio signals to reduce loss, the cost of compensation and damage done to customer service.

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