Squeezing value from every drop

Squeezing value from every drop

Airlines are stepping up development of information systems designed to cut fuel consumption as the air transport industry grapples with rising oil prices that have forced route cancellations and pushed up ticket prices.

Carriers including Air New Zealand, Jetstar and Qantas are among the players looking to squeeze more efficiency out of their flight operations using powerful analytical tools and other technological advances. Online booking is also expected to reassert its role in helping to drive down airline costs but information technology departments are under the gun to deliver refined computer systems if budgets are cut.

Jetstar chief information officer Stephen Tame said that at present prices the carrier could save almost $7 million a year if it reduced fuel consumption by 1 per cent.

"It has a lot of information - it has the systems, the data warehouses," Mr Tame said. "We are providing data to the business on how much things cost, how much profit we make or what consumption we have.

"We have a lot of these measures already, it's a matter of leveraging the information that we have got and generating a model."

One system that Jetstar already has operating is a platform known as ACARS. It is used to send information to aircraft when they are within 200 nautical miles of a Jetstar terminal.

ACARS connects to onboard systems and weighs up numerous factors affecting flight times and adjusts fuel burn rates accordingly.

"You want to work out what is the most efficient way to land an aircraft in a given location - what the average wind speed is, the average headwind, tailwinds and what the average fuel utilisation is," Mr Tame said.

"A lot of this is formulated and needs to be looked at."

Jetstar's parent, Qantas, is another carrier digging deep into its archives of flight information to determine the most efficient routes and fuel consumption rates.

It is also preparing its computing platforms for the arrival of the A380 so that existing on-the-ground technology will be properly integrated with the enormous aircraft's on-board systems.

"Data warehousing ranks as one of the most critical applications for the fuel conservation department as it ultimately provides the department with powerful measurement and management metrics," Qantas chief information officer Jamila Gordon said.

"On the back of this, Qantas Airways' fuel conservation program is conducting extensive trend analysis of fuel burn data."

A spokesman for Air New Zealand said the carrier would continue to sharpen its focus around online booking systems because they gave carriers the lowest cost of sale.

Air New Zealand, Qantas and Jetstar stressed they had been using information systems to help minimise fuel consumption but added they were now looking for further gains.

But some analysts questioned if there was much more room for airlines to save on fuel through the use of analytical technology to better plan routes and schedules.

"[Carriers] have made major IT investments. A lot of the savings around the IT systems are coming through on the distribution side, which is why you've seen the distribution commissions that the airlines are paying continue to fall," said one analyst who declined to be named.

"They're fairly refined in terms of fleet management already because essentially it's a massive logistics exercise."

JPMorgan transport analyst Matt Crowe also said that IT budgets were set to come under renewed pressure as carriers chased cost savings.

"Airlines were already looking for cost savings but they'll be looking even harder with fuel prices the way they are."

That would leave information technology departments scrabbling even harder for money to invest in information systems as budgets were already tight with prevailing tough conditions in the sector, Gartner managing vice-president Bob Goodwin noted.

"Globally the challenges for technology are cost control. This is not a problem that technology people have brought on themselves, it's a combination of the airlines' historic difficulties ever since 2001, with high cost structures, overcrowded routes, too much competition, high labour costs, and now, colossally high oil prices."

"When the CIOs of airlines look at investment these days, they have to say, 'Well, do I even have the money to do anything, is it just business as usual, because I'm locked in place?' "

But help could be on the way as air navigation organisations invest in new flight planning systems that minimise the amount of time aircraft spend in the air.

A platform operating at Airways New Zealand has cut the amount of time planes spend circling Wellington airport waiting to land by 10 hours a month, helping to save about 456 tonnes of fuel a year. Airservices Australia is developing a similar platform.

The authority trialled "required navigation performance" (RNP) systems using on-board avionics and positioning data to give aircraft a much tighter and potentially more direct approach path.

Originally developed for use at airports with difficult terrain, RNP approaches are now in more widespread use, both to improve safety as well as to cut approach times.

Stage one, known as the "Brisbane Green" project, monitored 33 Qantas aircraft making RNP approaches and departures at Brisbane International from January 2007 until last January.

The trial cut 17,000 miles (27,359 kilometres) off the approach, delivering 4200 minutes in flight time savings and a cumulative drop in fuel use of 200 tonnes.

Time savings experienced by RNP-capable aircraft flowed to other airliners queuing or in holding patterns to land at Brisbane, and present planning is to have a national network of RNP systems in place by 2010.

A spokeswoman for Virgin Blue said the carrier was working with Airservices Australia to help refine aircraft routes.

"[Our] fuel management information system will contribute data to work we are doing collaboratively with Airservices Australia on a number of initiatives which will permit flights to be flown on the most efficient route," the spokeswoman said.

"Further efficiencies through the elimination of airborne holding are also being developed."

Fairfax Business Media

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