It may seem like common sense that fuel has a big impact on air transport operations. Even though continually introduced new aircraft are bringing more efficient designs and engines as the years pass, fuel remains a top cost driver for air activities. In 2018 alone, fuel represented 23% of all operating expenses for Delta Air Lines.
This situation gets even worse in countries with a weakened currency, since oil and thus fuel, as a commodity, is generally negotiated in dollars, bringing a completely new challenge to the financial control of the operator.
Moreover, it can all get more difficult when it comes to the private aviation space, which does not count the economies of scale a big airline can achieve. The cost pressure of a business aircraft is much more critical, as fewer passengers mean similar costs spread among fewer paying passengers. In an industry where fuel usage is eventually measured not in liters, but in tonnes in the case of larger jets, the smallest of price differences between fuel suppliers can make a huge difference at the end of the day.
Controversial Fuel Tankering
That is why choosing the right fuel provider and strategy is a very tough task, but absolutely a necessary one. Fuel prices change on a daily basis and vary not just between two different airports, but also between different suppliers at the same airport.
In this sense, a widespread practice in the industry involves “fuel tankering”, where an aircraft takes off with more than the necessary amount of fuel from an airport in which a provider offers cheaper gas, thus saving money. While carrying excess fuel may be beneficial for an aircraft operator flying to a remote area or an airport with expensive fuel, it does have its drawbacks as well. According to a report featured in Quartz, the trade-off in cost savings are often more than offset by the increase in CO2 emissions with this practice.
Combatting High Fuel Costs with Technology
Another option to combat these challenges is to utilize new technology, such as Fuelworx, that helps guide the whole fuel management process. This means helping aircraft operators find the most convenient and cheap fuel providers from its own network of over 100 suppliers, while also planning the fuel consumption for the flight.
Technology like this can be immensely helpful, especially when operating to new airports, such as flying into Istanbul for next summer’s UEFA Champions League Final. With airlines and private aircraft operators always on the hunt for the most affordable fuel, as well as a world where the pressure for less CO2 emissions continues to increase, saving fuel is not just a matter of personal savings anymore. Environmental consciousness is here to stay, and aviation companies must continue to leverage new tools and technology to make their impact.