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Page added on October 25, 2013

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US airlines supersize their rides, packing people onto bigger planes

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Want to gauge how well US airlines are doing in controlling fuel costs? Try the word “gauge.”

US airlines all reported solid quarterly profits this week and again touted how they were able to hedge, refine, design, merge, cut or slim their way to fuel-efficient gains. That includes the term “upgauging” — basically the equivalent of supersizing snack meals for an industry that all but removed snacks, at least the free ones.

Delta Air Lines President Ed Bastian explained in the company’s earnings conference call: “We’ve been adding a bit of capacity in the US, but that’s coming through the form of an upgauge strategy, which is…very cost-effective and in fact, reducing the amount of flying we’re doing in terms of volume, but increasing the size of the aircraft.”

In other words: still one container, but a bigger drink. That leads to less fuel than adding another plane to meet higher passenger demand than the same time last year. So while capacity rose 2.6% for Delta on the quarter, expenses only rose 2%. And planes remain packed near record levels.

Delta’s fuel expenses declined $81 million and its per-gallon rate of $2.97 was among the lowest of all the airlines. The airline is generally considered among the most aggressive in fuel control efforts: it bought the 185,000 b/d Trainer refinery in Pennsylvania last year that finally showed a quarterly profit, although only $3 million. It moves swiftly on hedging positions, sometimes showing big losses, but not in the third quarter with $67 million in gains. It was the first to do a megamerger, with Northwest in 2008, and has a newly formed partnership with Virgin Airlines.

But all US airlines have been flying in that same direction since the recession. United Airlines, for example, this week unveiled slimmer seat designs it will roll out to 500 planes. The design was “focused on customer comfort, revenue generation and fuel efficiency,”  President Jeffrey Smisek said in an earnings call. Fuel-saving seats? Well, that comes just months after United became the first to trial a new winglet design to streamline airflow and save nearly $200 million in annual fuel costs for the fleet.

Jet fuel prices fell slightly on the quarter but remain more than three times higher than a decade earlier and have grown into more than a third of airline expenses.

Capacity was finally returning into the system, but cautiously. Scott Kirby, president of US Airways, which is maneuvering to merge with American Airlines into the world’s biggest, shows a gauge of that thinking: “Most of our capacity growth in the past couple of years has been through adding gauge to aircraft and utilizing our aircraft more and putting more seats on the airplane. That’s been very efficient.”

And President Gary Kelly of Southwest Airlines, working through the third year of its merger with AirTran when crude oil was $80/b, not the $100/b of today: “We’ve been trimming flights across the country,” he said in an earnings call. “(But) it’s very misleading considering that the gauge, it’s changing dramatically. So you’ll be seeing 717s replaced by 737s in the trips. In other words, the trip count won’t equate to the seat count and I’ll just ask you to stay tuned on that.”

Platts



7 Comments on "US airlines supersize their rides, packing people onto bigger planes"

  1. DMyers on Sat, 26th Oct 2013 1:04 am 

    A full analysis should include the energy and resources invested in a 737, from start of production to take off, compared to a 717. In a general sense, the idea of taking the same number of people in fewer trips rings a bell.

  2. BillT on Sat, 26th Oct 2013 2:50 am 

    Actually, they do not mention that they also are reducing the seat width from 17 1/2 inches to 16, allowing another person per row. I’m a normal slim person so it is still ok with me, but if you get a seat next to a ‘lard bucket’, you will be pinched by the ‘overflow’. That’s why I like a window seat. At least the ‘overflow’ can only be on one side. I think they should start requiring anyone over a standard size to buy two seats so they have room. Coming soon, I am sure.

  3. BillT on Sat, 26th Oct 2013 2:53 am 

    BTW: When does the first plane come out with coffin racks that they slide you into and then knock you out for your 12+ hour flight? Soon I’ll bet. Actually, that may be better. A nice rest and no use of the lav or food & drink.

  4. DC on Sat, 26th Oct 2013 7:29 am 

    The most wasteful, heavily subsidized and energy intensive way to move a person from point A to B ever devised.

    Somthing like 90% of the actual energy a plane uses is taking off, landing and keeping its own mass suspended in the air. Like the gas-burning car, only a tiny fraction of energy burned is actually used to move the person. And that doesn’t even get into the emergy of the airports, hour long+ drives to said airports(in private cars nat), subsidies and so on.

    I dont see anyone working on rebuilding the rail system-do you? All I see are breathless announcements of more planed airport expansions everywhere, and of course, mega highways to connect those airports to the suburbs where all those fat air travellers come from.

    What coherent systems we have….

  5. BillT on Sat, 26th Oct 2013 10:30 am 

    Actually, DC, over a long distance,flying is less energy consuming than autos. Especially if traveling alone.

    A 747 burns approximately .01 gallons per mile per person. That gallon will take that person 100 miles at 500 miles per hour. Assuming that the use is double with take-off, that is still 50 MPG or double the average car and crossing the Pacific or Atlantic is difficult by car.

    True, short hops between cities is an energy waste, usually, but they will be the first flights to be cut as fuel prices grow.

  6. TruckerMark on Sat, 26th Oct 2013 5:26 pm 

    Another whiner about people bigger than himself, eh Bill T? Actually Southwest went to the thinner seats last year and they get an extra couple of rows of seats using them too.

    You know Bill, I was 6’5″ and 190 lbs at the age of 18, but 215 lbs by the age of 21. By the age of 33 I was 240 lbs and still not fat. My trouble didn’t start until age 40 when high-fructose corn syrup and GMO corn became all the rage, and then over the next 7 years I gained 90 lbs, 50 lbs of that trying to quit smoking.

    Now I am the size of an NFL lineman and I am happy to pay extra for the longer leg room seats offered on certain airlines like Jet Blue and United, though I am still a Southwest kind of guy at heart too. Now discrimination is illegal in America based on a whole lot of reasons, and I think that one of them needs to be physical size too.

    Did you know that I am the same weight as one of my great-grandfathers and the same height as several other ancestors as far back as the Civil War too? I am afraid that’s the way that it goes sometimes, some of us have big ancestors and some of us don’t, so why do you think that any business in America should be allowed to discriminate against anyone based on their physical size, considering that some might discriminate against size-challenged people too?

  7. DC on Sat, 26th Oct 2013 7:27 pm 

    That might be ‘sort’ of true in a trivial sense Bill, but again. I suggest you look how much energy is required to get there-the total system cost. Its definatatly NOT .01g/p/mile. You, like a number of us here, are very good at looking at total systems cost. The idea that jets are that ‘efficient’, is simply only considering the tip of the air-travel iceberg. The fact is, like I pointed out, all those jets spend vast majority of there energy simply fighting gravity, and taking off and landing.

    Travelling across the oceans by ship is orders of magnitude more efficient than anything powered by a jet engine. If its efficiency AND air-travel you want. Then we should be looking at propeller-driven planes again or airships even-not jets. Jets are wonderful way to make non-renewable fuel vanish to get obese and ignorant people to the magic kingdom in a hurry.

    Why? because we want them done and back at their real jobs asap. To breed and consume and waste resources on utterly trivial garbage.

    Most air-travel is completely unnecessary and discretionary. Not all-but most. Something I know you understand better than most.

    747’s cannot be considered ‘efficient’ by any measure. Only marginally less wasteful than their predecessors at best.

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