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.”

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