As mergers, consolidation and a stressed operational environment reshape commercial aviation, fuel efficiency has risen to the top of airline business concerns. Not only is it the industry's single biggest expense, but economic and environmental pressures are forcing carriers to watch fuel consumption like a hawk.

According to Airlines for America's (A4A) January 2012 state-of-the-industry report, the fuel price per gallon has been the greatest cost input increase of the past decade, up 267% between 2000 and the second quarter of 2011. A4A points out that even as airlines use less fuel, they must pay more for it. In 2010, U.S. airlines used 47.4 million gallons of fuel a day, totaling $38.8 billion that year, based on an A4A analysis of Bureau of Transportation Statistics data. The numbers for November 2011 show airlines used 48.3 million gallons of fuel daily, up about 1.9% from 2010, but paid $49.8 billion to fill their tanks, up more than 28%. Moreover, A4A notes jet fuel prices have been climbing steadily since mid-December 2011.

Searching for new ways to economize on fuel has become a priority of the highest order. Whether adopting best practices via mergers, as United and Continental have done, or looking to technology for solutions, airlines are looking into all corners of their operations to push down fuel costs.

Management strategies

For many carriers, fuel economy management is a cross-departmental effort. For example, Alaska Airlines' fuel conservation steering committee is jointly chaired by Fred Mohr, VP maintenance and engineering, and Gary Beck, VP flight operations. American calls its program Fuel Smart, and it's led by Bill Clough, manager of strategic programs for operations strategic planning. Delta tracks fuel efficiency through collaboration among its flight operations, environment and safety, and fleet groups, as well as management. United Continental's fuel-efficiency program reports to a fuel council, including management who review the carrier's portfolio of initiatives once a month.

United and Continental have seen governance of their fuel-saving efforts change with their merger. Joel Booth, managing director of fuel efficiency, says that an International Air Transport Association audit undertaken post-merger confirmed organizational design changes the legacy carriers planned to make. His group has grown and refocused: While he used to include keeping an eye on fuel in his management of operational engineering, load planning, dispatch technology and flight dispatch support, he now solely concentrates on fuel-efficiency initiatives.

The merger also helped identify the subsidiaries' strengths, Booth says. “As we completed the merger and began to look at historical best practices, we really identified the strength in the Continental area in fleet replacement and aircraft modification, and the strength on the United side was really around looking at how we plan and execute flight policy and procedure.” United, he notes, also brings specialized knowledge in engine-build know-how. These areas of expertise have been instrumental in continuously improving its 700 aircraft merged fleet.

Continuous improvement derives mostly from better ways to gather and analyze data. Booth's group is fielding a Sabre flight-planning program across both subsidiaries. The other “bedrock, foundational piece” of a best-in-class fuel efficiency program, he adds, is a fuel management information system, which will help his team analyze gaps between planned and actual data points, such as routings, altitudes, flight speed, etc. “It's the next-level mentality about operational efficiency,” he says. He anticipates that program will come fully online by June. “We achieve a big level of business efficiency by automating a lot of that,” he says, “and it allows my team to spend more time on an, if you will, entrepreneurial approach, where they're out finding more things that can deliver more value.”

United Continental is not the only airline investing in new technology. JetBlue in January announced a contract to deploy Passur Aerospace's integrated traffic management platform systemwide to optimize fuel costs, and Virgin Atlantic Airways' fuel efficiency manager, Claire Lambert, says implementing a new fuel management system will be her main focus this year. It “will enable us to gather even more data about our fleet and enable us to make further improvements in fuel efficiency through various initiatives, including reduced APU [auxiliary power unit] use, improved flight planning processes, and pilot technique,” she says.

on the ground

Most airlines use single-engine taxi procedures as much as they can. But airport conditions and taxi times sometimes make single-engine taxiing impossible; for example, at small airports with typically shorter taxi times, it isn't feasible. But when it's doable, it works. For example, Alaska says its initiative, now in operation systemwide, saves 260,000 gallons of fuel per year, based on 2009 figures.

Airlines also aim to limit use of the other engines on board: APUs. According to United Continental, APUs use 40 to 100 or more gallons of fuel per hour, while terminal systems or ground power units (GPU) use less than five gallons of fuel per hour, making APU usage prime for reduction.

Alaska Airlines and subsidiary Horizon Air, which continue to push for FAA approval for on-demand APU use, says media relations spokeswoman Marianne Lindsey, make use of a common alternative: They connect aircraft to preconditioned air (PCA) units at gates. Alaska says its PCA units burn about 10 times less fuel than a typical Boeing 737's onboard APU. JetBlue also highlights PCA unit use: Of the 177 gates at airports JetBlue regularly serves, 115 have PCA units (62 gates do not) and 129 gates have GPUs, while 48 do not.

Indeed, APU reductions could yield some of the biggest fuel cuts in future. American's Clough says reduced APU use in 2011 generated some of its biggest year-over-year fuel savings. He was still tallying data from the fourth quarter of 2011 as of mid-January, but says that American expects to add about 2 million gallons to its 2010 figures for a total of more than 4 million gallons of fuel saved through reduced APU use in 2011. American aims to realize further savings from APU reduction in 2012 by working with management at airport gates and maintenance hangars. Clough projects at least another 1.5 million, perhaps 2 million, gallons of fuel savings from the initiative.

Creating efficiencies on the ground is key even as airlines renew their fleets, he points out. “Even though our new airplane engines are much more fuel-efficient in flight, the APUs burn about the same amount of fuel as our current APUs,” Clough says. “Our new fleet will help dramatically reduce our fuel usage in flight, where most fuel is burned, but there will still be an opportunity to continue to save fuel when the airplanes are on the ground.”

United Continental also is looking for continuous improvement from reduced APU usage. Leaders at its hubs have begun yellow-belt Lean Six Sigma projects to speed ground operations and cut APU usage beyond the 10-minute and five-minute year-over-year reductions achieved by United and Continental, respectively, in December 2011.

Replacing ground service equipment (GSE) vehicles with electronic or alternatively powered units also trims fuel consumption. Alaska Airlines takes part in the Port of Seattle's GSE Consortium, which set a goal to add electronic vehicle charging stations at Seattle Tacoma International Airport (Sea-Tac) by the second quarter of this year, and plans to increase its electric GSE fleet. Delta has converted about 10.5% of its GSE vehicles to electric power; it owns more than 1,250 electric-powered or emissions-free GSE vehicles and added more in 2011. More than 3,600 of United Continental's GSE vehicles (about 26% of its total GSE equipment) run on electric or alternative fuels. The airline also uses GSE to move aircraft between gates as often as possible, rather than relying on the aircraft's engine for repositioning.

American went a different route, choosing high-speed Goldhofer tow tractors that Clough says saved more than 4 million gallons of fuel in 2011 to move aircraft between terminal gates and line maintenance hangars. The German-made tractors are fuel-powered, Clough says, “but they burn substantially less fuel than an aircraft would taxiing over.” He expects additional gains this year. “We do a pretty good job of putting them to use at the times of day or the evening when we have a lot of activity that you need to go over for preventative maintenance checks, but we still believe we can increase that more.”

With the advent of environmentally friendly, self-contained systems (and third-party services) such as those from Pratt & Whitney and Lufthansa Technik, airlines are taking advantage of the reduced drag and subsequent fuel savings regular engine washing helps realize. Engine wash systems use calibrated nozzles to direct heated, pressurized water into the inlet and through the gas path while the engine is spinning (but not running) to clean it and remove deposit buildup from gas path blades for lower exhaust gas temperatures, better performance and fuel savings.

Delta TechOps spokeswoman Ashley Black says the MRO washes all of Delta's engines with Delta-manufactured equipment on a routine, time-controlled basis, with a few exceptions (the GE90-powered Boeing 777 and IAE V2500 MD-90); previously it washed engines as needed in response to poor exhaust gas temperature margins. The benefits of the regularity speak for themselves: In 2011, Delta washed 1,261 Delta engines and 33 contract engines, and it achieved $1.6 million in fuel savings. This year, Delta aims to expand the engine wash program to its Airbus and Boeing 747 fleets.

American attributed 7.3 million gallons of fuel saved in 2011 (based on third-quarter data) to engine washing. It started the program about four years ago but stepped up its efforts in the last two years, Clough says. Maintenance staff at six primary sites and three or four other auxiliary sites wash American's engines about twice a year using a variety of equipment American has purchased as well as leased tooling from EcoPower.

JetBlue engines are cleaned with an eco-wash process that saves up to 1 million gallons of fuel annually and eliminates carbon dioxide emissions by 21.9 pounds for every gallon of fuel saved, says spokeswoman Allison Steinberg.

United says it saves up to 3 million gallons of jet fuel per year—the equivalent of 28,000 metric tons of carbon dioxide emissions—via routine engine washings, while Continental's fleet has brought a 1% improvement in fuel efficiency. Booth sees the engine wash program as one of the airline's biggest areas of opportunity. “When you look at the wider network, the more airplanes … in more hubs, we need to align the equipment that we're using and make sure we're optimizing the frequency, the locations, and the benefits that we're getting from our engine wash program,” he says. “It is something that I think we're good at, but with a bigger network and the technology that's available, either internally or externally out there [I think] that we can optimize that program even more.” Some of the engine wash work for United now takes place at Pratt & Whitney in Orlando, but 90% of United's engine washings and all of Continental's are done in-house.

Alaska also has an engine-wash program in place to help with exhaust gas temperature margins, and while spokeswoman Lindsey says the airline knows it has achieved some improvement on fuel savings, she could not provide specific figures.

in the air

Younger fleets mean better fuel economy. Alaska and JetBlue boast the youngest fleets of U.S. carriers. By August 2008, Alaska had replaced the last of its MD-80s with Boeing 737NGs (which consume 18% less fuel), and Horizon flies all Bombardier Q400s; the Alaska fleet age averages 7.5 years and Horizon's 5.8. JetBlue operates 120 Airbus A320s and 49 Embraer E-190s with an average age of five years.

Virgin Atlantic also operates a young fleet—8.4 years old on average. It added 10 Airbus A330s in early 2011 that are 9% more efficient than the aircraft they replaced, and has ordered Boeing 787s, on average 25% more efficient than similar-size aircraft in the current fleet. The next addition will be more Airbus A330s this year, says Lambert. She adds that the 787s still are expected in 2014, but she did not have any details on dates.

Airlines known for older aircraft are investing in the latest technologies. American placed a huge order in July 2011: 460 Boeing and Airbus aircraft worth more than $38 billion. That comprises 260 Airbus A320s—130 of them A320neos, to be equipped with the CFM International Leap-X engine or the Pratt & Whitney PW1100G PurePower, slated for delivery from 2017—and 200 Boeing 737s, half with the more fuel-efficient Leap-X, expected between 2013 and 2022.

Delta also plans huge turnover for its aging fleet (at present, the average age of its 722 aircraft is 15.6 years). It plans to remove 130 of the least fuel-efficient units by mid-2013: It will retire its entire DC-9 fleet (24 DC-9-50s, as of January 2012) by the end of this year, replacing them with MD-90s; it is phasing out its Saab 340 turboprops, which will exit the fleet this year; and while they won't be eliminated entirely, Delta has been reducing the number of 50-seat regional jets it operates. In the meantime, it is updating its image: It concluded its 2011 narrowbody fleet RFP with a firm order for 100 Boeing 737-900ERs and an option for three more, to be delivered between 2013 and 2018.

United Continental expects a 32% increase in fuel efficiency from fleet investments, including a 20%-plus gain from 132 aircraft—50 Boeing 787s, 57 Boeing 737s and 25 Airbus A350s—it has on order through 2019. It plans to add 19 more 737-900s this year, Booth says, along with five or six 787s.

For fleets not ready for retirement, performance enhancement packages can add efficiency, notably for long-range 777s. For example, Delta retrofitted its 777-200ERs with a performance enhancement package expected to yield 1% fuel burn improvement, Black says. It involved modifying the outboard aileron droop and the environmental control system, making ram air improvements, and installing smaller wing vortex generators.

Twenty Continental 777s have been modified with a performance improvement package that amplifies the airplane's aerodynamics, says the carrier's parent company, which plans to modify 52 United 777s as well. And, working with Rolls-Royce, Virgin Atlantic modified the turbine blades for the Trent 500 engines fitted to its Airbus A340-600s, to boost fuel consumption by 1%.

Airlines continue to install blended winglets, which promise fuel-efficiency benefits of 3-5%. All of the eligible aircraft in Alaska's fleet of 117 737s (-800s/-400s/-700s/-900s and -400 Combis and -400 freighters) have winglets, which have cut its fuel consumption by 100,000 gallons per aircraft per year, for a total of 2.2 million gallons saved annually, based on 2009 figures. That's about 10% of the airline's total fuel savings from all of its initiatives. United Continental's fleet includes more than 300 mainline aircraft equipped with winglets.

American's Boeing 737 and 757 winglet installations were completed in-house by the third quarter of 2007 and the first quarter of 2009, respectively. Its Boeing 767 winglet installations are in progress at its maintenance base in Tulsa, Okla. Clough says another nine or 10 winglet-equipped aircraft were added in 2011, equal to about 3 million gallons per year of additional savings. Based on figures from the third quarter, American projects fuel savings for the full year of about $39 million from winglets alone.

Delta put winglets on its 737NGs and some of its 767-300s, 757-200s, 747-400s and A330-200/-300s, says Black. These were installed in-house and by a third party. The 737-900s that Delta ordered will come with winglets, and Black notes that Airbus narrowbodies, if Delta chooses to buy any more, would have the sharklet option beginning in 2013.

New aircraft certainly will bring automatic fuel savings with them as they enter the world fleet. But, as American's Clough so astutely points out, many other things can be done, on the ground and in the air, to generate further gains. Small steps, such as turning off the APU five minutes sooner, and big ones, such as engine modifications, all affect the bottom line. And a healthier bottom line makes everyone in the cross-divisional enterprise of fuel economy management happy.