The Cranky Flier » Fuel

Cranky on the Web (March 21-25)

CF — Sat, 26 Mar 2011 10:45:40 +0000

Fuel hedging no guarantee for airlines – CNN Out of the Office
Following up on last week, this week I wrote about fuel hedging and why airlines don’t actually have fuel prices locked in, for the most part.

How Not to Design a Website, Courtesy of a Lousy Indonesian Airline – BNET Headwinds
PT. Tri-M.G. Intra Asia Airlines out of Indonesia may be best known for its position on the EU blacklist (if it’s known at all), but really it should be known for a truly awful website.

US Airways Takes Its Frequent-Flier Program to the Next Level – BNET Headwinds
US Airways has added “special dividends” to keep people flying even after they’ve reached status. It’s a low cost way to keep people flying.

In the Trenches: The Agony of Credit Card Fees – Intuit Small Business Blog
Trying to compare credit card processors is like trying to grab a fistful of air. It’s impossible.

How Some Airlines Thrive Without Global Alliances – BNET Headwinds
Alliances may be for the cool kids, but there are plenty of airlines doing just fine without. Look at Alaska, JetBlue, and Hawaiian, for example.

Cranky on the Web (March 14 – 18)

CF — Sat, 19 Mar 2011 10:45:36 +0000

Fuel ‘surcharge’ a fare increase with a fancy name – CNN.com Out of the Office
This week, it’s time to talk about fuel prices. They’re going higher and so are fares, but the two aren’t completely related.

In the Trenches: The Good and the Bad of Paypal – Intuit Small Business Blog
I’ve been using Paypal since the beginning for Cranky Concierge, but there is some good and some bad in that.

Approaching Gloom: Airlines Slow Growth, Fill Fewer Seats in February – BNET Headwinds
Things started to slow down in February and some airlines couldn’t even fill the seats they offered.

O’Hare, Airlines Both Win as Feds Waste Money on an Expensive Expansion Project – BNET Headwinds
O’Hare’s expansion is moving ahead thanks to another infusion of federal funds.

Topic of the Week: Oil Keeps Rising

CF — Fri, 25 Feb 2011 11:45:49 +0000

Oil prices are rising over $100 an that ain’t good for airlines. It’s certainly going to mean rising prices as well. Discuss.

Why Algae Won’t Fly Anytime Soon

CF — Wed, 30 Sep 2009 14:48:42 +0000

We’ve heard people talk about biofuels for quite awhile now, and algae has always been promoted as one of the best possible hopes for mass production. It’s renewable and it doesn’t take from existing food supplies. But will we actually be seeing algae-powered airplanes in the near future? Probably not. I spoke with OriginOil President and CEO Riggs Eckelberry about the state of algae oil product, and it was a really interesting discussion.

The use of algae oil as fuel is not just hype. It has been proven that it can be done, and according to Riggs, it has a “fairly compact footprint.” Part of the issue until now has been figuring out the best way to extract the oil.

In Riggs’ words, in the current process, “they literally cook the water out. It takes a huge amount of energy to do that. Eventually it turns into a 10% water content which is an extremely dry meal. Then they combine it with hexane to extract the oil.”

So it takes a lot of energy and the use of chemicals to get anything done, and that’s not exactly a sustainable process. OriginOil’s process is different in that it separates the lipids from the biomass and then the algae sinks to the bottom while the oil sits on top of the water. You can see a time-lapsed video of this happening on their website.

They don’t need any chemicals or energy to do this. All they need is a ton of water, which presents problems of its own. At least the water can be reused. After the process is complete, the water simply has to be refiltered and it can be used again and again with limited loss in the process. They’ve also found that you can harvest a certain amount out of a batch every day and it grows back by the next day. Right now, they can pull out about 12.5% per day.

So, now that the processes are improving, can we use this on airplanes? I doubt it. Riggs gave me some numbers to put things in perspective. Let’s say you have 1 acre. On that acre, you probably will have about 40% of it as actual tank capacity for growing. In that environment, you will turn out about 63,000 gallons per year for that acre. How many airplanes can that power?

It’ll keep a 747 in the air for about 18 hours. That’s it.

So at this point, you need a LOT of land to power a fleet of aircraft. It’s just not feasible right now. But there are plenty of other uses that are good for algae and that can help take some demand out for petroleum. Things like specialty chemicals and health foods can work very well.

Riggs was certainly up front about this. “It’s not a very pretty picture. The best the industry has reported, and some are skeptical, is $8 per gallon of oil and some people think it’s more like $12 or $14. It’s still very, very high.”

There is some good news, however. Costs can come down significantly in environments where the right conditions already exist: wastewater treatment plants. Think about it – a ton of water flows through wastewater plants every day, and they can grow algae while that’s going on. Then the cost is very low for production, but again, the quantities won’t power the airline industry.

In Riggs’ mind, we’re probably about 5 years out from having a sustainable algae oil industry, but he’s confident we’ll get there. In order to get algae to power airplanes on a large scale, there’s a lot left to do.

This Week on BNET (June 22 – 26)

CF — Sat, 27 Jun 2009 14:57:37 +0000

US Airways’ Charlotte to Honolulu Flight Might Just Work
At first glance, the new US Airways flight from Charlotte to Honolulu seems pretty awful, but it may actually end up being smart.

Alaska Fills the Void in the Austin to San Jose Market
American pulls out and a couple days later, Alaska moves in. This might be smart.

Continental’s Biofuel Test Results are Good
Continental’s biofuel test results mirror those of Air New Zealand. They’re good.

Frontier to Become Subsidiary of Republic
Frontier announced yesterday that it plans to come out of bankruptcy as a full subsidiary of Republic.

What is Republic’s Strategy?
Now that Republic has stepped out in a big way with its Frontier purchase, what exactly is its strategy?

787 First Flight Delayed . . . Again
Did you hear that scream from airline exec offices around the world? The 787 is delayed once again.

United Pilots Prepare for Scope Battle
Pilot negotiations at United are heating up and Scope is about to take center stage.

Malev Orders Sukhoi Superjets
The Superjet got a big order, but is this the start of something big?

This Week on BNET (June 1 – 5)

CF — Sat, 06 Jun 2009 14:42:43 +0000

United Shakes Up Marketing and Distribution Groups
Dennis Cary is out, Graham Atkinson is back in, and marketing and distribution areas and getting makeovers.

Continental’s May Numbers Prove April’s Improvement Wasn’t a Trend
May numbers are out for Continental and they don’t look so hot. No surprise, of course, but still not fun to watch.

Just How Well Did Biofuels Perform in the Air?
Air New Zealand released results of its biofuel test in January, and the results are incredibly impressive.

Online Travel Agents Permanently Drop Booking Fees
Those temporary online travel agent booking fees have been made permanent.

US Airways May Revenue Looks a Lot Like Continental’s
US Airways released its May unit revenue numbers and the results aren’t pretty. No surprises, just not pretty.

Indianapolis Airport Facing Revenue Shortfall
Indianapolis built a new terminal last year, and now with traffic falling, the airport is facing a budget crunch.

Change Happens Slowly at American, Other Large Organizations
Here’s a fun example using American’s website design showing how hard it can be to effect change at a big company.

British Airways 777 Accident at Heathrow Linked to Delta Incident

CF — Thu, 05 Feb 2009 15:23:51 +0000

We all remember the BA 777 that lost power and crash-landed at London/Heathrow, right? Last September, an interim report was put out on the accident saying that ice buildup blocking the fuel flow was the likely culprit. Now Boeing is not only agreeing with that conclusion, but it is saying that it caused another 777 incident on a Delta aircraft. According to Boeing, the problem is only occurring with Rolls-Royce powered aircraft.

I’ll try not to get too deep into the weeds here, but there’s a place in the engine where fuel passes in tubes right next to engine oil. The hot oil warms the cold fuel and the fuel cools the oil so everything is in good shape. Apparently, the Rolls-Royce engines are not always able to adequately heat the fuel if it’s too cold, so ice has formed and blocked the fuel flow temporarily. In the BA accident, it was so close to the ground that there was no hope of recovery. In the Delta incident, the plane was cruising, so they were able to restart it without any serious issues.

It’s odd to see this report come out before the investigations are finished, but Boeing must have seen something that it really thinks needs to be fixed. The chance that this could cause another accident is slim, especially now that they’ve recommended some operational changes (like, fly lower where it’s warmer if necessary) that will help avoid the problem. But if you’re nervous about flying with a Rolls-Royce engine on the 777, let me try to put your mind at ease. Here is the breakdown of which airlines do not fly Rolls-Royce powered 777s. (This isn’t a comprehensive list, but it should cover the biggest operators.)

Non Rolls-Royce Powered 777s

Air Canada
Air France
ANA
Continental
JAL
United

Air New Zealand (777-200s), American, British Airways (some), Cathay Pacific, Delta (all but the Long Range aircraft), and Singapore are just a few examples of airlines that fly Rolls-Royce engines on their 777 fleet. I wouldn’t hesitate to fly on any of these planes right now, but I thought it couldn’t hurt to give a little peace of mind for those who feel a little nervous.

This Week on BNET (Jan 26 – 30)

CF — Fri, 30 Jan 2009 15:01:33 +0000

Southwest Reports Q4 Loss on Hedges
Hedges and other “special items” brought Southwest down to a Q4 loss, but it was the announcement on growth that had people turning their heads.

Southwest Sees Strong Revenue Performance in Fourth Quarter
Is that no-fee strategy working for Southwest? The airline has definitely seen some strong revenue gains.

Allegiant Sees 23.4 Percent Operating Margin in Fourth Quarter
When your net income increases by more than 300 percent, you’re probably on the right track. Allegiant has put out some strong results.

Delta Has Substantial Fuel Hedges for 2009
Other airlines are backing out, but Delta still has the majority of its fuel hedges for 2009.

November Complaints Show Specific Airline Weaknesses
Complaint numbers weren’t huge in November, but there were some areas that stood out for different airlines. Let’s take a look.

DOT Denies Virgin America Request for Confidentiality
Virgin America has now officially been denied confidentiality for its traffic numbers. Within the next few days, we’ll see how they’re really doing.

New Indianapolis Terminal a Burden In the Short Term
Indianapolis has its brand new terminal, but airlines are cutting flights. Is it simply the economy or is there more to it? I say there’s more.

Changing Demographics of the Orange County – San Francisco Route
Southwest and Virgin America will dramatically increase capacity between Orange County and San Francisco, so we’re going to see some big changes on this route.

Airline Earnings Reports Require a Foreign Language Translator
With all the special charges these days, it’s not easy to get to the bottom of an airline’s earning report.

This Week on BNET (Jan 19-23)

CF — Sat, 24 Jan 2009 15:29:24 +0000

Report: Investors Looking to Abandon Virgin America
Financial Times is reporting that Virgin America’s US investors may be looking to bail out. What does this mean for the future viability of the airline?

American Flight Attendants Begin Aviation Safety Action Program (ASAP)
American’s flight attendants have agreed to improve safety with an ASAP, the very same program the pilots pulled out of. What gives?

2008 Full Year Traffic
A slightly belated look at full year 2008 traffic for US airlines.

Delta On-Time Performance Lags in November
November was a great month for most airlines, but Delta and a couple of its regionals landed at the bottom of the pack. What happened?

Hawaiian’s Mainland Flights Have a Rough November
Hawaiian’s overall numbers look good, but there were some big problems getting mainland flights in on-time.

United’s Ugly Fuel Hedges Impact Fourth Quarter Results
Fourth quarter results are starting to pour in, and United showed some serious cash losses due to hedging gone wrong.

LaHood is Confirmed; Opposes New York Slot Auctions, Supports Controllers
Ray LaHood is now going to be running the show at the DOT, and he’s been saying all the right things so far.

This Week on BNET (Jan 12 – 16)

CF — Sat, 17 Jan 2009 15:31:48 +0000

Airlines Successfully Test Biofuels in Droves
Air New Zealand and Continental have both recently tested jatropha on actual flights, and the results have been extremely promising.

Alaska and Horizon Says December Storms to Cost Up to $13 Million
Those December storms that hit the Pacific Northwest are hitting the bottom lines of Alaska and Horizon. This one hurts.

Former Southwest Spokesman Ed Stewart Joins Delta
Ed Stewart thought he was done with this industry, but nope. He’s baaack. And he’s going to try to help Delta’s PR efforts.

Will Airlines Like the Disappearance of the Perimeter Rule in Washington?
With McCain trying to remove the perimeter rule, which airlines are likely to want it and which ones won’t?

Will Airlines Like the Disappearance of the Perimeter Rule in New York?
Yesterday we talked about Washington, but today, it’s New York. Which airlines should love and which airlines should have the perimeter at LaGuardia?

Mesa Reports a Delayed Loss for Its Fiscal Fourth Quarter
Mesa released it’s long-delayed fourth quarter earnings and it ended in a loss. What’s worse, there are a lot of potential pitfalls for the carrier going forward.