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ICCT: US domestic airlines show modest improvement in fuel efficiency since 2010, top performers Alaska and Spirit widen lead

Fuel efficiency scores (FES) of the 13 largest US airlines on domestic operations in 2012. An FES of 1.00 corresponds to average in-use fuel efficiency in 2012; values above or below represent airlines that performed better or worse, respectively. 2010 industry average is also shown. ICCT. Click to enlarge.

The overall fuel efficiency of US airlines on domestic operations improved by 2.3% from 2010 to 2012, less than what is needed to meet US greenhouse gas (GHG) reduction goals, according to an analysis released today by the International Council on Clean Transportation (ICCT).

Alaska Airlines had the most efficient US domestic operations in both 2011 and 2012, the same position it occupied in a 2010 benchmark assessment published by the ICCT last year. (Earlier post.) Spirit Airlines ranked a close second all three years. Alaska and Spirit have widened their lead over other airlines since 2010, the study found, by deploying advanced aircraft and other technologies as well as through more efficient operations practices.

Other notable carriers in the study included Southwest and United, which both went through corporate mergers during the period covered. Southwest, ranked fifth in 2010, improved in efficiency terms in both 2011 and 2012 despite its merger with less efficient AirTran.

In contrast, United had a lower fuel efficiency score in 2012 than would have been expected given the 2010 benchmark performance of United and its merger partner, Continental.

Allegiant Air and American Airlines were the two least fuel-efficient carriers over the period surveyed. In 2012 both burned 26% more fuel than Alaska to provide an equivalent level of transport service—the same gap that existed between Alaska and Allegiant in 2010.

The study highlights key factors in airlines’ efficiency performance. Unsurprisingly, technology has a strong impact.

There’s a tremendous disparity in aircraft fleet age and fuel efficiency between airlines. Alaska is very efficient in large part because it operates a new Boeing fleet and uses turboprops on regional flights. In contrast, American and Allegiant use old, fuel intensive McDonnell Douglas aircraft and regional jets extensively.

—Dan Rutherford, the ICCT’s program director for aviation and one of the paper’s coauthors

The average age of aircraft in Alaska’s fleet was only seven years in 2012, compared to about 23 years for Allegiant.

Airlines also use the same types of aircraft more and less efficiently. Spirit is up to 34% more efficient on a passenger-mile-per-fuel basis with its Airbus aircraft due in part to higher seating densities and passenger load factors. An A320 flight on Spirit may transport 20 to 30 more passengers than one on another carrier. Other factors influencing Spirit’s in-use efficiency may include lighter furnishings and reduced baggage load due to its fee structure. Spirit’s Airbus fleet is also among the youngest for US domestic operations.

Although fuel accounts for about a third of airline operating costs, and fuel prices remained consistently high in the time period studied, the ICCT analysis found a poor correlation between efficiency and profitability.

Net operating profit margin (2010-2012) and 2012 FES, mainline airlines. ICCT. Click to enlarge.

The two most efficient carriers, Alaska and Spirit, had the highest net operating profit margins from 2010 to 2012. But the third most profitable airline was Allegiant, followed by Delta Air Lines, both of which pursue a strategy of operating older, cheaper aircraft rather than investing in efficiency.

The contrast between these four airlines challenges the claim that airlines try equally hard to improve efficiency due to the high cost of fuel, the study concludes, noting that there is a clear distinction between airlines that invest in fuel efficiency to minimize operating costs and those that seek to minimize capital investments. There is a trade-off between financial and environmental costs, with some airlines choosing the latter.

This study should interest anyone working to reduce the environmental footprint of the aviation sector. The persistent gap between the most- and least- efficiency carriers highlights that while some airlines are investing in fuel efficiency to minimize operating costs, others profit from using the cheapest possible planes. There can be a trade-off between financial and environmental costs, with some airlines choosing the latter.

—Dan Rutherford

Airlines’ in-use fuel efficiency is directly related to aviation’s climate impact. In the US in 2010, aviation accounted for about 11% of energy-related carbon dioxide emissions from the transportation sector (4% of the total). Globally, aviation GHG emissions are rising 3% to 4% annually, and are on a pace to quadruple by midcentury. Efforts to change that trend have moved slowly thus far.

A lawsuit brought by environmental groups against the Environmental Protection Agency to force EPA to regulate aircraft GHG emissions as it already does for cars and trucks remains in limbo, the ICCT noted, while the International Civil Aviation Organization (ICAO) is not expected to finalize international measures until at least 2016.



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