Fuel costs are one of the most significant cost factors for airlines. According to IATA, the airline industry’s fuel bill is estimated to have totaled $188 billion in 2019.
That means fuel expenses account for almost 25% of an airline’s operating expenses. For decades airlines have been trying to reduce costs by applying various measures: Process improvements, new aircraft, hedging, etc.
Electronic Fueling (eFueling) helps airlines to optimize processes and save money — but isn’t primarily about reducing fuel-related costs.
So bad news first: With eFueling, your airline’s fuel costs won’t vanish.
However, during the last years with discussed with clients, how eFueling can contribute to reduce fuel-related expenses.
Based on those discussions, we implemented an additional functionality with our eFueling solution.
We like to call this functionality the “No Fuel Indicator (NFI).”
But what’s this No Fuel Indicator about, and how does it help your airline to save money?
eFueling — the platform behind
The main goal of our eFueling solution is to connect airlines and into plane agents/airports and provide a data exchange platform for both stakeholders.
From an airline perspective, this data exchange platform is used to send fuel orders, receive process milestones from the IPA, and exchange delivery slips and receipts.
The No Fuel Indicator reflects an additional functionality we’ve implemented, which covers a specific process.
The core idea behind is that an aircraft (or to be precise the cockpit crew at the plane) is enabled to send messages directly to the Into Plane Agent at the destination airport whether refueling is required or not.
How does the no fuel indicator work
Our eFueling solution is connected to an airline’s ACARS system.
Subsequently, the cockpit crew can swiftly send an ACARS message to the IPA, providing information whether refueling is required or not.
These messages are usually already sent once the aircraft takes off at the departure airport but can be updated while being en-route and finally confirmed once the aircraft is approaching at the destination airport.
The following illustration explains the process graphically
How does that help to save money?
Many IPAs charge airlines for being available at the on-block gate/position — regardless of refueling is needed or not.
And from an IPAs perspective that perfectly makes sense, since they had the effort to send a fuel truck to the position.
However, if the cockpit crew can send a message that no refueling is required, the IPA does not send a truck to the position. Subsequently, the airlines are not charges since no the IPA hasn’t provided any service.
Does that make sense for all flights?
I guess you already know the answer: Of course not.
Especially when talking about medium- and long-haul flights refueling is always required.
Conversely, it only makes sense for short-haul or domestic flights.
That means the approach is especially relevant for airlines operating a bunch of short-haul flights or a huge domestic network.
What about the bottom-line?
This strongly depends on the number of flights the No Fuel Indicator can be applied to — and the number of connected airports.
Large network carriers can quickly achieve 6 to 7 digit savings annually.
Compared to the enormous amount of fuel-related expenses, this probably sounds like peanuts.
Nonetheless, you have to bear in mind that the savings can be achieved with almost no additional effort.