mahikarnam

Many airlines across the globe are holding brainstorming sessions to arrive at ways to reduce their operating costs. While several airlines have been grounded, many others are finding it difficult to stay afloat, given the soaring oil prices, falling demand and problems of overcapacity in certain markets.

In India too, airlines are trying hard to bail themselves out of such turbulent times. With every increase in the price of Aviation Turbine Fuel (ATF), air-fares have also shot up. So much so that the passengers who had taken to air travel with the arrival of low-cost carriers in India are shifting loyalties back to rail and road.

ATF forms 40-50 per cent of the overall cost of airlines in India. Hence, reduction in fuel bills is the most important task for them. While actual price reduction is not in their hands and will entirely depend on the course global oil prices take, efficient fuel consumption might help airlines in the short to medium term.

Boeing, in its latest report India: 2008 Market Outlook, says that in a Boeing 737 type aircraft, fuel savings between 15,000-25,000 gallons per year per aircraft will result in a consequent saving of $92,250 (Rs 38.75 lakh)-$1,53,750 (Rs 64.58 lakh) per year per aeroplane. Similarly, for Boeing 777 type aircraft, saving of 70,000-90,000 gallons per year per aeroplane would mean $3,29,000 (Rs 1.38 crore)-$4,23,000 (Rs 1.78 crore) saved on fuel. While for 747 types 1,00,000-1,35,000 gallons per year per aircraft would save an airline $4,70,000 (Rs1.97 crore)-$6,34,500 (Rs 2.66 crore) annually per aircraft.

The US-based aircraft manufacturer has outlined suggestions for the airlines to achieve these numbers.
How to save fuel

At flight operations level, fuel burnt can be reduced through such steps as redispatch on longer flights to lower contingency fuel which reduces fuel-burn and increases cargo revenue. Aircraft loading should be such that centre of gravity is maintained in the mid to aft range, which helps minimise cruise drag. Optimum flap settings and altitude selection too reduce drag. Slower cruise speeds reduce fuel burn. Use of tinkering, where appropriate, reduces fuel cost.

Suggesting that airlines reduce operating empty weight (OEW), the manufacturer points out that they must cut down on passenger services and in-flight entertainment items, empty cargo and baggage containers and excess water. Coming to measures at the ATC level, Boeing lists out some more efficient terminal operations such as continuous descent approach and dynamic departures to minimise holding time at destination.

Close watch on airframe aerodynamics for issues like rigging, gaps and clearances, sealants, air leaks, external patch repair and paint condition gets up to 0.5 per cent fuel burn improvement. Checks on airframe weight as a result of dry insulation blankets and accumulated dirt, use of light hardware in terms of seats and carpets, and carbon brakes improve fuel burn up to 0.25 per cent.
Route optimisation

In order to improve operating profitability, Boeing in its report has said that route network and schedule optimisation could help airlines get short- to medium-term benefits on passenger revenues.

According to Dr Dinesh A. Keskar, Senior Vice-President, Sales, Boeing Commercial Aircraft: “At times airlines have to sell eight economy class seats to make one business class.” Therefore, reconfiguring with optimised business and/ or premium economy class could also show good results when it comes to revenues for a medium-term period. Participation in alliances and/or strategic code-share agreements could also boost passenger revenues for airlines.

Cargo is another area where airlines need to greater focus, especially high-value freight, says Boeing. This could help carriers increase revenues in the short to medium term. At the operating levels too, airlines will benefit on fuel costs with practices such as hedging on fuel prices.

Profitability can be improved by increasing the maintenance check intervals too. This will help reduce such costs by up to two per cent in the short term. Manpower optimisation by adopting cross-skill utilisation, mechanic-on-call and single certification system could also be looked at for a short- to medium-term period.

Many airline companies are still bleeding, even after reducing the number of flights and putting in place efficient fuel consumption measures in the last couple of months. This means more aggressive cost-cutting measures are called for. How Indian carriers manage these remains to be seen.