Think you’re budget conscious? Airlines lead the way

We’re not sure that Formula One motorsport could teach the airline industry much about speed (after all the top speed of a commercial airplane is probably three times faster that of a racing car) but it does looks as if they could teach them a thing or two about saving fuel and cutting carbon emissions.

This follows news this week that EasyJet is looking at trialling a hydrogen fuel cell system that is based on F1’s kinetic energy recovery system. This system captures the ‘waste’ energy created by the cars braking and converts it into electrical energy that can then be used when the driver needs extra power to accelerate.

EasyJet is hoping to adopt the system so that its aircraft needn’t use their main engines whilst taxiing – a manoeuvre which the airline has calculated accounts for up to four per cent of its fleet’s total fuel consumption annually and the equivalent of travelling about 4 million miles per year. Apparently, the average EasyJet aircraft typically spends 20 minutes of its total flight time on the ground taxiing which cumulatively adds up to a lot of wasted fuel and unnecessary carbon emissions.

Of course, EasyJet is not the only airline to be constantly looking for ways to reduce costs (although this one particularly caught our eye) as, owing to its very high fixed costs, the entire industry is constantly looking for ways to shave costs. We did some more research into the area and turned up some pretty strange strategies.

The most obvious strategy (and so least strange) is airlines concentrating on just one type of airplane or buying from just one manufacturer. Operating just one type in the fleet streamlines maintenance and training whilst buying from just manufacturer gives the airline significant leverage at the time they place the order.

As aviation fuel counts for over 70% of an airline’s costs, then fuel hedging saves them significant sums too, particularly if fuel prices vary dramatically. Hedging means taking a gamble against the future price of jet fuel. If an airline thinks that the cost of fuel is going to rise in the future, they sign contracts locking them into the current price for months or even years. If fuel prices double in the future, the airline would be buying fuel at last year’s cheaper rate. However, if prices drop, the airline is stuck paying their “locked in” higher rate.

Flying into cheaper airports can also save them tons of money too, but it can only work if the destination has two or more airports and the second one is relatively near to where you want to go. Famously, Milan has three airports; Linate, Malpensa and Bergamo, but the last two are both 45-50 kilometres from the city centre!

Keeping staff numbers to a minimum by outsourcing practically everything that moves also keeps the costs down. Increasingly this can include the flight crew too, who may work for an agency rather than be an employee.

So far, so normal. But now let’s consider some of the more unusual cost cutting measures.

Reputedly, Bob Crandall, a former CEO of American Airlines (and clearly its Scrooge- in-Chief) had the company remove a single olive from each in-flight salad they serve. The savings were reported to be as high as $500,000 per year and as low as $40,000.

British Airways is now saving £600,000 a year in fuel costs by descaling the toilet pipes on its planes. Unusually, that suggestion came from its own staff who were encouraged to contribute cost cutting ideas to an online suggestion box. (Perhaps they all knew a plumber?).

But the airline that we have the most sneaking regard for when it comes to finding ways to cut costs has to be Ryanair. Amongst the many areas its accountants have cast their beady eyes have been removing armrests (the airline decided against that one); reducing its inflight magazine from an A4 format to A5 (and making it double up as a menu), cutting the amount of ice taken on-board and encouraging its staff to lose weight. The motivation here, according to a company spokesman was they might then ‘appear in the annual Ryanair calendar.’

We suspect that EasyJet’s flight crew are happier that their employers are taking cost saving advice from Lotus Cars rather than Weight Watchers.

 

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