Compared to past years, the price of oil today is reasonable and fairly stable. So, it may seem a bit unusual to talk about managing fuel consumption now. But considering the recent Economic Performance of The Airline Industry report from the International Air Transport Association (IATA), airline spending on fuel will grow to $129 billion, fuel expense will comprise 18.7 percent (on average) of an airline’s total operating expenses and oil prices will continue to rise during 2017.
It doesn’t take much of an increase in oil prices, like the ones noted in the IATA report, to erode your already thin margins. And, you can’t really judge the true impact of fuel consumption on your operation without taking emissions into consideration as well. In addition to rising oil prices, new global emissions schemes are going to increase your costs.
That kind of unpredictability is the best reason to think about how you can better manage fuel costs today. Are you truly ready for the unpredictability ahead? If you’re trying to manage your flight operations and/or fuel consumption data using disparate systems that don’t talk to each other, much less synchronize data in a meaningful way, the answer is likely no.
Challenging Internal and External Factors
That was the situation for Brazil-based GOL Airlines, which flies primarily throughout South America. The airline operates 124 aircraft that cover approximately 860 daily flights. What the airline didn’t enjoy were the number of internal and external factors that stifled opportunities to better manage fuel costs, including:
- Minimum takeoff fuel requirements of between 6,000 kg and 4,500 kg of fuel (internal)
- At least two airports planned as alternates, adding the need to carry extra fuel to cover a minimum distance of 200 NM (internal)
- Weather/ATC additional fuel standards of between 1,000 and 700 kg (internal)
- 10 percent contingency fuel (external)
- ATC preferential routes (external)
- South America’s decaying airport infrastructure, including lack of key navigation technologies (RNP, AR, ILS) as well as fuel service in many locations (external)
These operating conditions led to high fuel consumption rates and the corresponding emissions output. In addition, GOL had to deal with unfavorable exchange rates against the dollar, which drove fuel expenses and operating costs even higher.
GOL responded to its unproductive fuel consumption the way any airline would. It looked for answers inside its vast amount of operating data. But the airline faced the headwinds of differing reporting systems for load sheet, operational reporting, QAR, flight plan, fuel uplift and fuel price. It took time to gather all the data, and once it was gathered, it was difficult to consolidate the data into a single database, much less integrate all the critical factors to provide meaningful insights.
Unprecedented Fuel Optimization
The best decisions are born from the best information. If GOL was to continue to grow and thrive as an airline, it needed better data for better decision making. This would not only give the airline more control over a significant and unpredictable expenditure to control the bottom line today, it would be critical for managing future growth. What GOL found was Jeppesen’s Fuel Dashboard.
Fuel Dashboard began in 2011 as a concept developed by Ian Britchford, Director of Fuel and Flight Analytics, to defend against the crushing blow that fuel prices were having on profitability across the industry. Since that time, Fuel Dashboard has been continually refined until, in 2015, the capability to include flight plan optimization was added.
The result was a single fuel management and flight planning tool that:
- Puts all fuel efficiency activity in one place
- Improves fuel analysis
- Allows for more informed decision-making
- Fully optimizes flight plans
- Creates flight crew buy in (one of the most important factors in fuel management)
“This is really going beyond optimization,” explained Britchford. “We’re helping airlines understand how to plan more effectively. No one else in the industry can do anything like this, and it’s a huge advantage for our customers.”
Jeppesen’s Fuel Dashboard makes good on the promise to simplify an airline’s ability to optimize fuel burn because it:
- Collects and processes all available fuel data in a single platform
- Tracks all known fuel savings initiatives
- Evaluates flight plans against 180+ different parameters
- Identifies and displays trends and opportunities in a format that’s easy to understand and allows for faster, more informed decision-making
To date, Fuel Dashboard is optimizing the fuel consumption for 28 airlines, operating more than 1,500 tails of 21 different types. On average, Fuel Dashboard has helped identify potential fuel savings of 4.3 percent — creating a combined $8 billion in savings.
“From what we calculated — based on actual customer data — we know that the Fuel Dashboard identified an average of 4.3 percent savings, and the capability to evaluate optimized flight plans has been calculated to bring a further potential 1 to 2 percent,” explained Britchford. “Seeing as fuel can sometimes be as high as 25 percent or 30 percent of an airline’s operating costs, even 0.5 percent is a significant impact on fuel consumption. And there is, of course, a direct correlation between fuel savings and environmental savings.”
Which is exactly what GOL needed to combat its high fuel consumption. According to Britchford, “In 2016 alone, GOL Airlines reported to us that they saved 5.2 million kilos in fuel.”
Wind, weather, mechanical issues, flight crew illness, ATC — the list of commercial aviation’s unpredictable factors is extensive. With Fuel Dashboard from Jeppesen, you can remove fuel burn and emissions fees from the list. And you increase your margins at the same time. Learn more about Fuel Dashboard by contacting your representative.