Saving money is at the top of every airline’s priority list at the moment. Even before COVID-19, airlines constantly tried to reduce fuel costs. In this article, you learn about a little feature that’s (up to now) only used by a few airlines. However, this small software feature helps airlines to save up to $1mil — annually!

Airline Fuel Costs

Fuel Costs Are One Of The Most Significant Cost Factors For Airlines

Let’s start with the numbers first. Fuel expenses account for almost 25% of an airline’s operating expenses. According to IATA, the airline industry’s 2019 fuel bill totaled $188 billion.

Undoubtedly, a massive number. Therefore, almost every airline has applied various measures over the last decades to shrink these costs. Process improvements, new aircraft, fuel-efficient engines, or fuel hedging are just a few examples. 

However, there’s one approach only a few airlines are utilizing but helps to save up to $1 Million annually. We like to call it the NFX function.

The Problem Many Airlines Are Facing That Leads To Unnecessary Fuel Costs

Before we dig into the NFX function’s details, it is crucial to understand many airlines’ problems. The fueling process still reflects a mainly manual and verbal process. Pilots order fuel verbally, fuel provider hand-over paper-based fuel slips, etc. And that leads to a very particular problem.

Airlines Pay Fuel Provider Although They Are Not Refueling!

That verbal and manual process leads to an insane fact: Airlines have to pay the fuel provider, although they do not need to refuel the aircraft. Don’t believe me? Here’s why: Whenever an aircraft arrives at an airport, the responsible fuel provider sends out a fuel truck. Your first thought is probably, “that makes sense.” Actually, it makes sense for many flights but disregards particular flights!

The Problem Starts With Tankering Flights!

Many airlines operate a considerable amount of tankering flights. What’s that? Fuel tankering is a practice whereby an aircraft carries more fuel than required for its next flight (trip fuel + reserve) in order to reduce or avoid refueling at the destination airport. And tankering flights are no rare event. Eurocontrol calculated that alone in the European Union, 2.1 million flights can perform fuel tankering — annually!

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    Here Are The Unnecessary Fuel Costs

    Since most of the airlines cannot communicate digitally with its fuel provider, the provider will send out a fuel truck even in case of tankering flight. And therefore, the airline has to pay. How does that look in reality:

    • Tankering flight arrives at the airport
    • Fuel provider sends out a fuel truck to the aircraft
    • Aircraft captain tells the fuel provider that refueling is not required
    • Fuel truck leaves the aircraft
    • Airline has to pay for the truck’s availability

    What’s The NFX Function That Helps Airlines To Save $1 Million Fuel Costs

    The NFX function usually is part of fuel management software. You can call it a smart add-on since it enriches the primary scope of fuel management software. In general, airlines use fuel management software to improve the fueling process and, especially, digitize communication towards fuel providers. 

    This powerful functionality continuously calculates whether refueling is required at the destination airport or not. The calculation starts before take-off and continues during the entire flight. In case refueling is not needed, it allows sending a message out of the cockpit directly to the fuel provider. That’s it. The whole trick. It’s really that simple.

    As a result, the fuel provider does not send out a fuel truck to the aircraft. Ultimately, the airline avoids unnecessary costs.

    Proven Results From One Of Our Clients!

    One of Europe’s major flag carriers was the first airline to use the NFX function. Operating a considerable amount of tankering flights the decision paid off very quickly. It was probably one of the fastest ROIs ever achieved. After one year the annual savings reached almost $1 Million.

    Of course, the saving potential depends on an airline’s network and the number of tankering flights operated. For smaller airlines or airlines that are focused on long-haul flights the potential might be less. However, during these testing times every dollar counts! Therefore, we highly encourage airlines to assess this possibility and realize this additional savings potential now!

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    Benjamin is an information-enthusiast, a content-maniac, and CEO of Information Design (in this order). His daily business revolves around pioneering solutions with the aim to change the way companies use information. His visions are based on expertise gained in more than 15 years in the industry, and working with renowned companies all over the globe.