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On March 09, 2021

Fuel Efficiency at C-level: what every Top Manager should know

As we hopefully face the last months of this pandemic that has caused an unprecedented crisis in the aviation sector, forward-looking airlines (Air France, EasyJet, Jetblue, United Airlines, etc.) have accelerated their commitment towards a more sustainable aviation. 

How can they do that in a post-pandemic scenario that will be more competitive and cost-sensitive than ever?

Cost reduction for survival in today's context

Benjamin Smith, CEO of Air France KLM, recently stated that “the COVID-19 crisis is forcing the airline industry to reinvent itself. Only those businesses that can transform themselves quickly, deeply and sustainably will survive”.

Thus, your top management is surely looking for ways to reduce your operational costs without compromising operations. And what is the number one cost of an airline and the only one you can reduce without impacting your service? Fuel.

A proper fuel efficiency program will boost your current fuel savings and identify new areas of improvement. You will reduce your fuel bill by up to 5% with absolutely no impact on your customers. With the right tools and support from fuel experts, you will benefit from a positive cashflow 3 to 6 months after starting. The typical savings will be over 20 times higher than the project's cost, which makes an excellent return on investment ratio.

A particular example: Cebu Pacific has saved over 35 million Euro with their fuel efficiency program since 2017. Discover how >>

Here is a selection of useful resources to learn more about the benefits of using a fuel efficiency tool.

You need to keep in mind the increasing importance of being environmentally friendly.

Society is increasingly aware of ecological issues, and this is already conditioning traveling choices. Scandinavian Airlines’ CEO, Rickard Gustafson, states that “this is an existential question for us. If we do not clearly articulate a path to a sustainable aviation industry, it will be a problem”. Indeed, aviation represents 2 to 3% of the worldwide CO2 emissions, and this will increase by 45% in the next 15 years if no action is taken.

Individuals and state pressure to reduce polluting emissions has risen over the last years, pushing airlines to find ways to diminish them.

An enhanced fuel efficiency policy will not only allow you to preserve some valuable cash but will also develop an eco-friendly image for your brand that will be appreciated by your passengers.

Additionally, off-setting schemes like CORSIA and EU-ETS represent additional workload and taxes for your organization. Choosing a tool that allows you to reduce, and easily compute your emissions and create your reports will allow you to save time, effort and money.

“Solutions exist that are logical more than just ecological, that can create jobs and generate profit while also reducing polluting emissions and preserving natural resources”, said Bertrand Piccard.

The spread of a fuel efficiency culture within your organization will yield long-term benefits.

Every department in your organisation must be engaged in the fuel efficiency program, pilots being the main drivers. You will need everyone flying in the same direction and aware of the benefits that their efforts yield to increases morale and motivation.

Your fuel efficiency program will yield a valuable positive cash flow and set up a permanent cost reduction for the years to come. In parallel, your green initiatives will attract eco-conscious passengers, increasing your revenue. Together, these two facts will allow further investment in new digital technologies such as those based on Big Data, Artificial Intelligence, and Machine Learning that will allow you to take your performance even one step further.

As a quick takeaway, remember that a fuel efficiency program will help you reduce your number one cost without affecting your service quality while developing your eco-friendly image. With a quick positive cash flow and a high return on investment, you will be able to finance further improvement projects.

Isn’t this what an innovative and forward-looking airline would do?

 


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