Asian airlines – How to survive high fuel costs

Malaysia’s The Star newspaper recently reported that Asian jet fuel buyers are paying the highest premiums to get supply since 2008 – $1.01 a barrel above the benchmark.

The article reports that the main cause is Asia’s booming aviation industry, which makes up over one-third of the global air passenger market and gains on average just over 1% in market share each year. In March this year, passenger traffic in the region rose by 12% on the previous year, according to data from IATA.

While these high jet fuel prices are good news for refiners, it’s a concern for airlines because as we know, fuel is one of an airline’s largest expenses, usually accounting for 18-30% of its operating costs.

 

Controlling fuel costs

The value of jet fuel cannot be controlled by the aviation industry of course, but there are other ways that airlines can reduce their fuel bill and remain profitable, even in challenging market conditions.

As we explained in our last blog, better fuel management brings substantial savings for many reasons. For example:

  • More accurate fuel planning and budgeting leads to buying only the fuel you need at the right time, with fewer storage and adhoc purchase costs
  • Automated fuel tendering means you save time and make the right choice of supplier
  • An optimized dispatch operation reduces your fuel consumption
  • Automated invoice verification ensures you don’t over-pay or double-pay for your fuel.

That’s why leading carriers such as Lufthansa, British Airways and Etihad have invested in fuel management software.

 

Calculate your potential savings now

 

How much could you save?

By changing how your airline conducts fuel planning, tendering, contract management, operations monitoring and accounting, we’re confident that you can save 2-3% of your fuel bill.

For a medium sized airline, that equates to millions of US dollars. For a larger airline, even more.

These changes can be made far more quickly and affordably than other fuel efficiency measures, such as buying new aircraft or retraining pilots to fly aircraft differently. In fact, we have a specialized aviation fuel management system that will do most of it for you.

 

With fuel prices reaching a ten-year high and demand set to continue, now more than ever, Asian airlines need to better manage their fuel consumption and operate more efficiently. Fuel management software is a good way to do that. Try our ROI tool today and start building your business case.