FuelClub Discount

Air New Zealand is looking to save more than $100 million in fuel costs a year as it puts smaller planes on services to London.

Surging oil prices are causing airlines around the world to brace for slower growth, tighter earnings and deeper cost cutting.

Last week Air France KLM warned it would have to expect a 1.1 billion euro ($NZ2.25 billion) rise in fuel costs, squeezing profits this year and forcing it to find 150 million euros in savings.
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Airline executives forecast bankruptcies, job cuts and increased ticket prices yesterday as Air France-KLM plunged the industry into further gloom with a warning that its profits would fall by a third under the weight of rising fuel costs.

Shares in the Franco-Dutch carrier were marked down 10 per cent to ?16.74 amid fears that its fuel bill would be ?5.7 billion (?4.5 billion) this year, up from ?4.6 billion in 2007.

The warning from the world’s biggest airline by revenue provoked fresh turbulence in a sector already unsettled by Wednesday’s announcement from American Airlines that it would charge passengers to check in luggage in an effort to generate additional revenue. With Qantas, the Australian flag carrier, putting up the cost of international flights by 4 per cent and Japan Airlines also set to raise its fuel surcharge, executives predicted fewer passengers and a bleak outlook for the industry.

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The 20 largest U.S. airlines posted an operating loss margin of 0.02% in the fourth quarter of 2007, the first loss after six consecutive profitable quarters, according to a monthly report by the U.S. Department of Transportation Monday.

The report measures the operating margin — profit or loss as a percentage of total operating revenue — of 20 large-network, low-cost and regional carriers in the USA. The industry last posted operating losses in the first quarter of 2006.

Sharply rising fuel costs contributed significantly to the loss. The 20 carriers spent 29% of their operating expenses in the fourth quarter of 2007 on fuel, compared to 13.5% five years earlier in the fourth quarter of 2002.
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Phoenix-based Honeywell Aerospace has formed a partnership with Airbus, JetBlue Airways and others to find a way to make jet fuel from renewable sources, such as algae and a hearty arid plant called jatropha.

The technology could help break the airline industry’s tie to high-cost fossil fuels, leading to more profitable operations and lower fares. It also could help temper global warming by reducing greenhouse gases emitted by aircraft.

The green fuel will be tested in Phoenix in an auxiliary power unit made by Honeywell. The small turbine engines provide electricity to the aircraft when the main engines are off. Honeywell Aerospace has been working on developing engines that burn alternative fuels.
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Malaysia Airlines (MAS) will adjust fuel surcharge if oil prices continue to soar as crude oil price skyrocketed towards US$127 per barrel, said executive director and chief financial officer Tengku Datuk Azmil Zahruddin.

“If oil prices continue to increase, then, yes (the fuel surcharge will be increased),” he told a briefing yesterday when asked on the possibility of MAS increasing its fuel surcharge.

Other airlines that recently increased fuel surcharge are British Airways, Thai Airways, American Airlines, United Airlines, Delta Air Lines and Singapore Airlines.
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A fuel surcharge by airlines on North American flights may rile customers, but observers say it was inevitable and may even help carrier earnings in the short run.

WestJet Airlines Ltd. and Porter Airlines slapped a fuel surcharge on all their flights yesterday as the price of oil continues near all-time highs. The move follows a similar levy by Air Canada last week. WestJet customers will now have to pay an additional $20 on short-haul flights, $30 for medium-haul and $45 for long-haul flights. Porter Airlines pegged its increase at $20 one way for the Ottawa-Toronto route, and $40 one way on all other routes.

“We’ve hung on as long as we could, as long as our low-cost structure allowed us, but we’ve now reached that point where we introduced that surcharge, at a level that we think is good for us,” WestJet spokesman Richard Bartram said yesterday.
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