Airline Company Flight Plans
Briefing | By Rachel Paulk | August 13, 2008
Facing
an energy crisis at home and punitive new regulations abroad, some of
the largest airline companies are banding together to face the problems
these trends engender.
The leaders of three top aviation fuel management companies—Flight Sciences International, Sabena Flight Academy, and BMB Fuel Consulting Services—held a press conference Thursday, August 07, 2008, to announce their merger and the subsequent creation of Flight Sciences Global Partners.
Michael Miller, President of Miller Air Group in Orlando,
Fl, stated that “The airline industry is facing the toughest challenge
since 9/11, with fuel prices that have nearly doubled in the past year
and ten airlines that have shut down in the U.S. since January alone.
That’s why we’re here today.”
The merger resulted from the
companies’ understanding of the need for an international fuel
efficiency organization following the U.S.-based airlines’ difficulty
with handling skyrocketing gas prices and the European Union’s newly
released aviation emissions standards.
Robert Callahan, President of Flight Sciences, stated that he
did not believe airlines were doing as much as they could do to combat
high gas prices. Callahan pointed out that “Right now they’re rapidly
changing prices upward—they’re charging for pillows, coffee, and
everything that you do—but the basic problem is the price of fuel,” and
asserted that efforts to reduce prices needed to be seen in increased
fuel efficiency instead of increased fringe costs. Robert Kelland,
CEO of BMB Fuel Consulting, stated that while each plane carries
extensive sets of flight data, the airline companies weren’t taking
advantage of this information to conduct the more complicated data
analysis required to increase overall fuel efficiency—which is where
Flight Sciences Global Partners steps in.
Coupled with the fuel efficiency problems are the new European Union
requirements for airlines to track and reduce their level of carbon
dioxide emissions. The vote to include the aviation industry in the
EU’s Emissions Trading Scheme occurred July 8th; airlines are expected
to follow a timeline to have the trading scheme implemented by 2012. In
four years, the airlines must have a functional reporting and
monitoring program for their emissions, and the airlines will be
allowed 85% of their recorded emissions with 15% up for auction in a
cap-and-trade program.
Currently, the monetary amount for emissions is set at 30 euros per ton
of carbon emitted. According to Callahan, “Each ton of fuel makes over
three tons of carbon.” Patrick Van Dessels,
CEO of Sabena Flight Academy Consulting, stated that “We estimated the
impact of this new cost for the airlines at $5 billion euros per year,
[an] average of the first nine years,” yet mentioned this was only at
the initial implementation, as “trading could change the price.”
Despite the drastic increase in the price of oil and the increased cost
imposed by the EU on airline fuel’s emissions, the airlines have no
truly viable alternatives to oil-derived fuel. Stuck between a rock and
a hard place, Callahan stated that “Unfortunately, [airline companies]
are still going to have to use fuel.” Miller asserted that it could
take at least 15-20 years before an alternative energy was developed
enough to handle the demands of the aviation industry. In the mean
time, airlines will continue to pass the costs along to the customer as
the energy crisis intensifies.
E.D. The EU regulations, meanwhile, take effect in about four years,
and effect “airlines flying to, from and within Europe,” according to
the FSI press release. The scheme “will require airlines to track,
monitor and report emissions levels beginning in 2012.”
Rachel Paulk is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.
10 Comments | Post a Comment
Good post! Rising fuel prices are always a complete bane to airline companies!
To Last Minute Flights:
Thank you for your compliment. I had entirely forgotten my August 14 post, so much so that when I was notified of your recent answer, and started to read my post, I couldn’t even remember writing it. Just curious, how did you happen to read this quite old (August 13, 2008) AIM column at this late date?
Charlie
In times like these, shouldnt the Govt. take an added responsibility to cut down on flight taxes.
I think that the honeymoon days for flight travel are over and it will be tougher and tougher for people to board flights now.
It really does amaze me how Airlines are still in business with fuel prices the way they are. I would really like to see the numbers broken down as to the profits being made. The main goal is to keep making more fuel efficient aircraft that will go further on less and leave less of a footprint.
Each airline company can be worried about the increasing cost of the oil. But that is a fact. Our energy is reducing sharply. We need to find out other energy to substitute oil.
@IUggagerUitar
Well, i guess we can’t rely on solar energy of course.
I totally think that this is true to airline companies, the increasing cost of the oil is totally a major problem for them. For me, it could lead to increase of air fare, which I would assume, be a burden for those who’d rather take the plane then on by train, car or buses.
August 14 at 10:46 am | #1 | Link
As much as anyone with a heart must have sympathy with the U.S. Airline industry considering the high cost of fuel and having to deal with the ridiculous European Union stance on carbon dioxide emmisions charges, one must also remember the equally ridiculous and foolish business practices of the major U.S. airlines, which have run their companies for the past 20 years in a highly competitive market as if charging customers for tickets at bargain rates to get market share could cover their fuel and other costs. They also have allowed their service to deteriorate to unacceptable conditions and worst of all, have been guilty of allowing case after case of forcing whole plane-loads of passengers to sit on the tarmac for many hours with little or no food or drink, and reacted to innocent remarks from customers by accusing them of criminal acts, and causing arrests in unfair situations, so that the expense prediciment they now find themselves in meets with little sympathy from the public, both flying and non-flying, if not outright antagonism against these abusive methods. The result is that what used to be an airline system that prided itself on the type of people it had for customers now finds itself in much the same prediciment the Greyhound bus industry found itself many years ago, where ill-clad “bums” and hippy types and squalling brats seem to be the common customer base and the average airline clientle finds itself surrounded by low-class customers they do not want to be associated with. Those of us in our 60’s and 70’s or older remember the days when the railroads still furnished much of the transportation for the country but the opening up of the airline industry to the type of people who could afford the ridiculously low prices has lost the airline industry its former customer base and and standing. I can see the day coming when the United States railroads will be able to competitively run high speed railroads like Japan and Europe and take over much of the travel base for the public and the airline industry may rue the day they tried to outdo the bus lines in charging the low rates that got them into the fix they now find themselves. The airline industry needs to get back to running their companies like the good old days.
uwcharlie