Private 2 ATP Career Center Article: Soaring Fuel Cost



All around the world fuel is on a rise. Since crude oil passed 100$ a barrel, airlines have increased thier fuel surcharge which is charged to passengers to help off set rises in fuel prices. This recent rise in fuel costs has forced the airlines to start looking for ways to be more fuel effecient, such as retrofitting planes with winglets. Winglets are vertical extensions of wingtips that can improve a airplanes fuel efficiency by 3%. Other changes have come in the airlines schedule.

Alaska Air has recently changed its schedule between Seattle and six cities in California to try to get more premium-paying business travelers. The airline is also trying to cut down on costs by trying to complete the phase-out of its remaining MD-80's this year, due to the high fuel cost. Alaska's vice president of finance Brad Pedersen recently said "We're looking at the fall schedule now to see if there are further opportunities to pair unprofitable flying and perhaps retire some of the MD-80s a couple of months sooner than currently planned."

Airline Insurance has been on the rise since 2001 after the terrorist attacks on September 11, the threat of terrorist attacks on has caused the insurance prices to raise ten-fold. Insurance prices still remain high even though there hasn't been a attempt on a plane in a few years.

With airliners competing for passengers in this huge market, many airlines are trying any tactic they can to lure passengers to fly. Jet Blue recently launched a refundable fair campaign to lure more people to fly after a video of a flight surfaced, where the passengers were stuck on the run-way for 8 hours, hurting the companies sales.

The recent fuel prices are putting pressure on aircraft producers to come up with more fuel efficient aircraft. Boeing is planning on introducing the new 787 Dreamliner which it planned on releasing in May 2008 but had to push back to early 2009, after production problems. The 787 is a mid-sized, Twin Engine, wide-body, jet airliner. The airliner will be more fuel efficient than earlier Boeing models, and will also be the first airliner to be mostly constructed of a composite material. The 787 is 20% more fuel efficient than other models Boeing has made. The new 787 has already became the fastest selling wide body airliner with 600 orders all ready placed by July 8 2007, after it had its first rollout ceremony.

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