Sunday, June 13, 2004

Airlines scramble to lower fuel use

Small measures can pay off big when oil is dear

By Brad Foss
The Associated Press

Pilots for Ted, United Airlines' low-fare carrier, flew 14 mph slower at cruise altitude over the Memorial Day weekend.

At American Airlines, planes flying trans-Atlantic flights now carry less emergency fuel, to lighten their loads.

And at JetBlue Airways, pilots are using one engine instead of two to taxi along congested runways.

With high oil prices stifling the airline industry's recovery, U.S. carriers are finding ways to cut back on the amount of fuel they use, placing an emphasis on fuel efficiency not seen since the 1980s energy crisis.

Some carriers said they recently lowered their fuel-burn rate in the air and on the ground by as much as 3 percent on certain routes. That is not nearly enough to counter the industry's anticipated loss of $3 billion in 2004, but the amount saved is not chump change either for a business that spends roughly one out of every seven of its pennies at the pump.

"That money goes right to the bottom line. That's why we're being so aggressive," said Steve Forte, senior vice president of flight operations at UAL Corp.'s United Airlines. The bankrupt carrier aims to trim its anticipated $3 billion jet fuel bill this year by 0.5 percent by focusing sharply on efficiency.

United's Ted reduced the maximum flying speed of its planes from 530 mph to 516 mph over the Memorial Day weekend, saving about 3,000 gallons of fuel while sacrificing "very little" on its on-time performance, Forte said. United is considering making the change fleetwide.

Big changes difficult

The relative fuel efficiency of any airline depends mostly on the age of its planes, the length of its routes and the number of seats sold per flight. While critical, these factors cannot be easily, or inexpensively, changed.

But there are plenty of rather simple ways for airlines to burn less fuel. One well-known strategy is to carry less weight.

To that end, American Airlines, the nation's largest carrier, in late May began flying trans-Atlantic flights with half as much reserve, or emergency, fuel in its tanks. This lightens the load AMR Corp.'s jetliners need to shuttle back and forth - each gallon of jet fuel weighs 6.7 pounds - and the move is expected to save the Fort Worth, Texas-based company about $10.5 million in 2004.

With authorization from the Federal Aviation Administration, American now flies to Europe with a fuel reserve of 5 percent instead of 10 percent. Several other carriers, including United and Continental Airlines Inc., are seeking similar FAA authority.

The FAA requires pilots to plan for 45 extra minutes of flying in case of delays or the need to divert to another airport. But American's pilots last year carried enough reserve fuel, on average, for 99 minutes of extra flying. The company's pilots, who make the final decision about how much fuel they need for each flight, have recently gotten that figure down to 90 minutes, producing about $19 million in savings for the year, Wagner said.

Other carriers have slimmed down by pulling heavy ovens and serving trays off flights where no hot food is served, and by reducing the amount of water and ice they carry.

"I think that $40 oil is a wake-up call," said Gary Kelly, the chief financial officer at Southwest Airlines Inc., which is in better financial shape than most airlines because it has hedged 80 percent of its fuel costs in the mid-$20-a-barrel range.

Other steps airlines are taking before and after flights to reduce fuel spending include:

• Using one engine while taxiing on runways.

• Plugging into electric generators at terminals to keep planes powered between flights.

• Filling up their planes' tanks in cities where prices are lowest (so long as the extra weight does not undermine the benefit gained by purchasing cheaper fuel).

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