Saturday, May 24, 2008

Incredible rising airfares: the role of fuel

Airlines are hiking fees for all sorts of things these days, largely to deal with a single issue: the stupendous increases in fuel costs.

(Photo: The author and an Aloha Airlines passenger plane on the carrier's last day of operation. Fuel costs were blamed in part for the firm's demise.)

Our back-of-the-envelope calculations suggest that a flight from Honolulu to Maui or Kaua'i could burn as little as four gallons per seat. If the plane isn't full, it's more gallons per sold seat. If you're paying $49 for that flight, more than half the money is going to pay for the jet fuel.

Fuel exceeded labor as the largest airline cost in 2006, and that the year when fuel was crossing the $2 milestone.

Clearly, it's a big problem for airlines when fuel goes from $2 to $4 and appears ready to go to $5 a gallon, and there are equivalent hikes in lubrication and of the many materials and services that also have inherent fuel costs.

Jet fuel, much like kerosene and a heavier distillate of crude oil than gasoline, has gone up in some cases faster than the price of crude.

The International Air Transport Association ( reports that jet fuel has risen in cost 90 percent in the past year (effective May 16, 2008) and was costing airlines $3.90 a gallon.

IATA reports that “modern aircraft achieve fuel efficiencies of 3.5 litres per 100 passenger km.”

In U.S. terms, that works out to about 1.5 gallons per 100 passenger miles. But that's for the most modern planes. Some get far worse mileage than that.

Airline companies are designing planes to be dramatically more fuel efficient in response both to the cost of fuel and to the amount of carbon dioxide aircraft add to the global load. IATA says a couple of new aircraft are pushing for 1.3 gallons per 100 passenger miles. A Boeing executive was quoted saying the firm hopes the new Dreamliner 787 will get 1 gallon per 100 passenger miles, although most printed estimates put it closer to 1.3 gallons.

Airlines report how many seat miles they can fly per gallon—meaning how far they fly on a gallon of fuel per seat on the aircraft. Major U.S. airlines report a range of about 40 miles to 76 miles, with an average in the 50s. Hawai'i airlines, flying short routes, use a lot more fuel, due to more takeoffs per mile than most. Some airlines on short hops report numbers in the 20s.

Clearly, Hawaiian's big DC9 aircraft will get different fuel numbers than Mesa/go!'s smaller CRJ200s, but for illustrative purposes we'll go with 25 seat miles per gallon.

That means the 100-mile flight from Honolulu to Līhu'e costs about 4 gallons per seat. If the airline is flying paying customers in only 60 percent of those seats, it means 6.7 gallons per paid seat. (Again, caveats: If you fly less weight, you'll use less fuel, but we're talking broad numbers here.)

With aviation fuel at $4 a gallon, it means the airline is paying about $26 for the jet fuel to fly you to Kaua'i for that Hamura Saimin. And another $26 to fly you home.

If an airline can keep the planes 80 percent full, your seat gets charged 5 gallons or about $20 for the Līhu'e run.

Let's look at it another way. If two of you fly for the weekend to Maui, let's say you're burning 6 gallons for each person per flight, or 24 gallons in all. That would fill up most smaller cars twice. You could stay home and drive six times around O'ahu (assuming a 100-mile circuit) and burn about the same amount of fuel.

A long weekend in Vegas? Even if those planes are getting twice the seat miles per gallon of the interisland jets, think in terms of a couple of 55-gallon drums of fuel to fly your seat there and back.

(5,600-mile round trip at 2 gallons per 100 miles is 112 gallons. If the airline can get 1.5 gallons per 100 miles, it's 84 gallons, or $336 at $4 a gallon.)

It's no wonder you can't find that $300 West Coast flight any more.

Here is the U.S. Department of Transportation's rundown on anticipated efficiency of various forms of transportation:

It shows that even in 2020, the government is still only looking at an average of about 60 seat miles per gallon, or 1.66 gallons to 100 miles.

© 2008 Jan W. TenBruggencate