announced a £80 million loss
this week, blaming a combination of lower demand and skyrocketing fuel prices.
With the airline's fuel costs rising by nearly one third, the year-over-year loss underscores the importance of reducing fuel costs to enhance profitability for all airline carriers.
Virgin Atlantic claims it is at the forefront of the drive to increase fuel efficiency, launching a sustainability initiative in 2007 called Change is in the Air
The program aims to cut carbon emissions by 30% by 2020 through a variety of measures, including longer term solutions such as its sustainable aviation fuel partnership with low-carbon fuel provider Lanzatech.
The airline recently announed the latest step in their sustainability program, a fuel efficiency management tool that may save as much as £20 million and 92,000 tonnes of carbon dioxide a year.
The tool uses technology to accurately measure performance and prioritize fuel saving opportunities. The technologically advanced system, developed by OSyS
, collects 300 data points per flight, delivering a treasure trove of data to mine from areas like:
- How arrival delays and holding patterns are affecting fuel usage
- Pilot technique
- Fuel use on the ground
Corneel Koster, Director of Operations, Safety and Security for Virgin Atlantic, said:
"As an airline, aircraft fuel use is our number one environmental issue – as well as a significant financial one. This really is a very exciting phase in our commitment to drive fuel efficiency and carbon reductions.
"We have had initiatives in place for many years, which are generating significant benefits, however the OSyS tool will truly be a step change for us. We are bringing business intelligence on 300 data points together in an easy-to-use, single source to the teams in Virgin Atlantic who really influence our fuel use and are passionate about doing so efficiently and safely."
Other airlines are quickly realizing that green cred can not only be a compelling talking point with increasingly aware consumers, but a sure-fire way to reduce cost and increase the bottom-line. Some highlights:
- American Airlines saved 141 million gallons of fuel in 2011 through their FuelSmart program, which yields some very interesting efficiciences.
- British Airways set a goal of zero waste to the landfill by 2010.
- Delta Airlines claims to have reduced carbon emissions by improving fuel efficiency by 35 percent since 2000 and 10 percent since 2005 with a fuel-efficient fleet that performs at 55 passenger-miles per gallon - the same as a hybrid car with one person.
With the cost of fuel not likely to drop any further, these efficiencies are quickly turning into a competitive advantage.
Those carriers that are most quickly and effectively able to reduce their fuel costs will prove to be more competitive not only on a fare-by-fare basis, and also in overall profitability.