Fuel Cost & Ways to Reduce It Group 8 Zeynep İlayda KARAKUZU Mehmet Can ÜNLÜ Yağızhan ÖZDEMİR Çağdaş ŞAHİN Sergen VURAL

OUTLINE Fuel Cost of the Airlines Data -Air China -Finn Air -Spirit Airlines -Aeromexico -Scandinavian Airlines Ways to Reduce Fuel Cost Estimation of the Potential Savings in Fuel Resources

Fuel Cost 2016 = 3,312 million USD Total Cost 2016 = 14,709 million USD Fuel Cost % Share = (3,312/ 14,709) x 100 %22.5

%20.9 Fuel Cost 2016 = 571,214 billion USD Total Cost 2016 = 2,710 million USD Fuel Cost % Share = (571,214 / 2,710,069) x 100 %20.9

%23.8 Fuel Cost 2016 = 447,553 billion USD Total Cost 2016 = 1,880 million USD Fuel Cost % Share = (447,553/ 1,880,474) x 100 %23.8

%22.2 Fuel Cost = 5,864 million USD Total Cost = 26,396 million USD Fuel Cost % Share = (5,864/ 26,396) x 100 %22.2

%17 Fuel Cost = 761,876 billion USD Total Cost = 4,481 million USD Fuel Cost % Share = (761,876/ 4,481,743) x 100 %17

Ways to Reduce Fuel Cost 1-Use modern aircraft The older generation aircraft burn more fuel.With the average age of the PrivateFly fleet being under 5 years old, the fuel burn a modern private jet is substantially less than older aircraft.Many airlines are now replacing their legacy fleet with ne aircraft.For example the Boeing 787 burns a staggering %30 less than older,equivalent aircraft. 2-Buy fuel in advance or hedge Aircraft operators can negotiate with a particular fuel supplier to fix prices over a period of time. 3-Fly higher Aircraft engines are more efficient at lower temperatures which are reached at higher altitudes.Private jets can fly higher than airliners.Not many airlines fly above 40.000 ft,and that is the level at which most private jets cruise.

4-Fly direct 5-Reduce taxi time Zig zag routes adding more than 5% to the total fuel burn.As private jets fly higher,in less congected airspace,more direct routings are available. 5-Reduce taxi time Delays on the ground result in unhappy custuomers and increased fuel burn.Ensuring flight clearances are obtained before passangers board enables a swift taxi to the runway. 6-Taxi on one engine Not often used in the private jet sector,many airlines now only start their second engine minutes before take off.They taxi to the runway holding point using just a single engine,to burn less fuel while the aircraft is still on the ground.

Finn Air (FSC) Fuel Cost 2016 = 571,214 billion USD 1% of Fuel Cost = 5,712,14 billion USD Spirit Airlines (LCC) Fuel Cost 2016 = 447,553 billion USD 1% of Fuel Cost = 4,475,53 billion USD If there is 80 passengers per flight with 0.5 first checked bags per person, this would be an estimated fuel cost of 30 - 46 million dollars per year If there are an average of 275,000 passengers per day, this would mean 100 million passengers per year. If half of these pay the $25 baggage fee, American Airlines would collect 1.25 BILLION dollars in fees. This is way higher than fuel costs for these first bags.

Resources http://www.airchina.com.cn/en/investor_relations/images/financial_info_and_roadshow/2017/04/25/F554ED4E11C792B421F419738143B8E2.pdf http://ir.spirit.com/annuals-proxies.cfm https://investors.finnair.com/~/media/Files/F/Finnair-IR/documents/en/reports-and-presentation/2017/annual-report-2016-v2.pdf https://aeromexico.com/cms/sites/default/files/GAM_Consolidated_FS_English_Dec_16_0.pdf https://www.sasgroup.net/en/sas-annual-report-20152016/ https://blog.privatefly.com/6-ways-aircraft-operators-pilots-work-reduce-fuel-costs