United Airlines, a wholly owned subsidiary of UAL Corp. (UAUA), plans a test flight on two flights between the U.S. and Europe to reveal its new fuel-saving techniques. The test flight will go on a round trip from Frankfurt to Chicago on a United 777.
The company stated that these new fuel-saving techniques expect to save about 940 gallons of fuel, i.e. 3.0% of the fuel usually burnt by the airline. The flight has received clearance from the Federal Aviation Administration (FAA) as well as air traffic authorities in Canada and Europe. However, the airlines cannot use these techniques in every flight as it may hamper the track of maintaining the required minimum distances between planes.
United Airlines first quarter 2010 results are impacted by the increase in fuel prices. Total operating expenses including fuel, increased 3.0% year over year for the first quarter, whereas operating expense, excluding fuel, increased only 1.3% year over year. Consolidated unit cost per available seat mile (CASM) increased 4.8% year over year, excluding fuel charges, whereas consolidated CASM increased 6.5% year over year including fuel.
The airline industry is most immune to the rising fuel prices. The price of fuel has risen considerably over the past two years. United Airlines has not been able to increase its fares with the increase in fuel prices due to the highly competitive nature of the airline industry. In addition, fare increases may not totally offset the fuel price increase and may reduce demand for air travel.
Several airlines have been finding ways to reduce their fuel expenses. American Airlines, a wholly owned subsidiary of AMR Corporation (AMR), tested fuel-saving technology on a Paris-to-Miami flight last year. It took a direct route guided by global-positioning (GPS) technology instead of staying on the aerial highways normally used by jetliners.
Alaska Airlines, a wholly owned subsidiary of Alaska Air Group Inc. (ALK), also tested a fuel-saving landing procedure at the Seattle airport that promises to save millions of gallons of fuel along with other fuel-saving measures.
The company stated that these new fuel-saving techniques expect to save about 940 gallons of fuel, i.e. 3.0% of the fuel usually burnt by the airline. The flight has received clearance from the Federal Aviation Administration (FAA) as well as air traffic authorities in Canada and Europe. However, the airlines cannot use these techniques in every flight as it may hamper the track of maintaining the required minimum distances between planes.
United Airlines first quarter 2010 results are impacted by the increase in fuel prices. Total operating expenses including fuel, increased 3.0% year over year for the first quarter, whereas operating expense, excluding fuel, increased only 1.3% year over year. Consolidated unit cost per available seat mile (CASM) increased 4.8% year over year, excluding fuel charges, whereas consolidated CASM increased 6.5% year over year including fuel.
The airline industry is most immune to the rising fuel prices. The price of fuel has risen considerably over the past two years. United Airlines has not been able to increase its fares with the increase in fuel prices due to the highly competitive nature of the airline industry. In addition, fare increases may not totally offset the fuel price increase and may reduce demand for air travel.
Several airlines have been finding ways to reduce their fuel expenses. American Airlines, a wholly owned subsidiary of AMR Corporation (AMR), tested fuel-saving technology on a Paris-to-Miami flight last year. It took a direct route guided by global-positioning (GPS) technology instead of staying on the aerial highways normally used by jetliners.
Alaska Airlines, a wholly owned subsidiary of Alaska Air Group Inc. (ALK), also tested a fuel-saving landing procedure at the Seattle airport that promises to save millions of gallons of fuel along with other fuel-saving measures.
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Read the full analyst report on “ALK”
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