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AirTran gets efficient after launch of FuelPlus EFM

Before FuelPlus, AirTran managed its fuel needs via Excel spreadsheet, which only was updated when the airline received data to add into the file. It was a low-fare airline with a basic system, little different from other airlines around the world.

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However, until it adopted FuelPlus, the Orlando-based airline did not know what was possible, or if a system could track all the transactions in the complicated U.S. airline fuel market. "We weren't paying market rates, we were paying too much. And we had duplicate invoices and few ways to track them", said AirTran's Director of Fuel Todd Hunter, who joined the airline in 2007 from Northwest Airlines.

Since March 2008, when AirTran began using FuelPlus, AirTran has worked hard to generate $10 million in new efficiencies - from just the first six months of using the system. It eliminated duplicate invoices, and the airline now has an analysis level that lets Hunter and his small team see where its money is going. And, more importantly, whether it is being spent in the right areas. "FuelPlus disciplined me to question every single line on every single invoice. It caused me to ask ‘why'", Hunter said, noting that the airline was charged taxes in one airport that should not have been charged. "In the past, we just paid the invoices. Now we don't."

While Hunter is confident that the biggest airlines, like Lufthansa and KLM, have added to the expertise of FuelPlus, he also believes the enterprise fuel management solution works for medium and small airlines as well. "FuelPlus is perfect for an airline like ours. I don't care how it works, but it's very user friendly", he said. "We like FuelPlus because it was built for airlines. There are a lot of things airlines do that other industries don't do." AirTran is able to see its inventories more clearly and knows exactly what its prepayments and fuel levels should be, which has become more critical during 2008 when schedule changes are more rampant among U.S. airlines.

AirTran faces a U.S. market where the fuel process for airlines is more complicated than in Europe or Asia, where single invoices are normal for single airport transactions. In the U.S., it is not uncommon to have separate tank suppliers, pipeline transmission contracts, into plane vendor contracts, and multiple fuel suppliers at a single airport. AirTran had as many as 600 invoices in a single month from one location, Ft. Lauderdale. "Every airport has its own way of doing things, and it used to take all my time just to track everything", Hunter said.

In addition, FuelPlus is helping the airline budget and forecast better than ever before. "It's a system that's easy to learn - there's nothing difficult about it", said AirTran Fuel Analyst Darren Hill. With its newfound capabilities, the airline has become more proactive with contract bidding and watching its vendors.

AirTran has only begun to learn how to use the system's many options and reports, according to Hunter. As his team eliminates as many paper invoices as possible, they can turn their attention to being more aggressive in the fuel market. AirTran is already giving good feedback to FuelPlus, including suggestions on how to better adapt FuelPlus to the various state-specific tax rules that only exist in the United States.

 

About AirTran

AirTran Airways, a subsidiary of AirTran Holdings, Inc., a Fortune 1000 company, is ranked number one in the 2008 Airline Quality Rating study. The airline offers more than 700 daily flights to 57 destinations and operates North America's newest all-Boeing fleet, has friendly service, Business Class, and complimentary XM Satellite Radio on every flight. The airline operates more than 140 Boeing 737-700 and Boeing 717-200 aircraft.

(published on 09/13/08)

 

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