Worst yet to come
The projected news doesn't get any better for global air carriers in 2009. The "Worst yet to come" comment was made by IATA in December.
"The chronic industry crisis will continue into 2009 with $2.5 billion in losses," said Giovanni Bisignani, chief executive of IATA. In recent articles, the AIT eNewsletter has discussed several of the reasons why many global carriers are facing a grim New Year.
Declining passenger travel is a key reason; people are simply flying less and saving their money, due to economic fears. The global recession has caused business travelers and vacation planners to re-think their plans.
Indeed, the price of fuel has gone down in the past few months; however, no one believes it will stay there. Economists have quickly pointed out the cyclical nature of the oil / jet fuel commodity market. Consumers and executives only have to remember back as far as July 2008 to see how high fuel prices can go. Last month we discussed fuel hedging; heroes in July who had locked in the price of fuel to protect against spikes in the cost per barrel were lamenting their strategy by November as the bottom fell out of the market.
Shifting economic demand is another factor contributing to the industry's poor projected performance this year; people are simply buying fewer goods. The global marketplace has shrunk by the trillion's of dollars as American, European and just about every other consumer has decreased their purchases. This has slowed the economic juggernaut of China; less freight is being transported on the ocean and in the air. Yet, carriers still must pay for leases on aircraft and interest on loans they secured to buy those multi-million dollar planes from Boeing and Airbus. All the while, airports are still charging for landing fees and gate costs, employees are drawing salaries (those not yet laid off) and retirement and health benefits are still being paid.
Airlines to some degree cannot help themselves; they may combine a few scheduled flights if there aren't enough passengers, or cancel a few freighters if there isn't enough cargo as Cathay Pacific did in September 2008. They cannot, however, simply stop flying for a while. You can shut down an automobile assembly plant for a month; you can't shut down an airport.
The outlook does seem better for United States-based carriers. In an article found in the International Herald Tribune (December 9, 2008) Giovanni Bisignani noted that American carriers just coming out of bankruptcy didn't have the money to sign long fuel hedging contracts (with the notable exception of Southwest Airlines, which was discussed in last month's AIT eNewsletter). IATA predicted that US flag carriers may actually report a profit in 2009, albeit small from a percentage of revenue perspective. Bisignani believes the global IATA results would be worse were it not for the financial turnaround of some American carriers.
So in this time of retrospect and predictions, what can the airline and air cargo industry look forward to in 2009?
- Mergers, Acquisitions and Consolidations - Delta/Northwest, British and Qantas looking each other over, Lufthansa acquiring Austrian while courting SAS - we'll see more consolidation in the airline market. Strength may be in numbers; however, size counts and the larger carrier may have greater staying power than a smaller independent-minded carrier
- Attrition - As we have seen in 2008, some smaller carriers and cargo airlines simply will not be able to compete and pay their bills at the same time. We'll see a few less niche players in the 2009 market, especially those totally dependent on China exports.
- Rightsizing - A familiar politically-correct word used instead of "restructuring." Expect airlines to cancel some routes, add more stops to others, change aircraft size, re-route and adjust schedules, all in an attempt to change the formula and ride out the expected bleak days of 2009.
- Fuel Fluctuations - Fuel prices are down as we go to press and experts believe they will go up again, down again and reach a level of equilibrium by the third quarter. In the meantime, carriers will see profit improvements, profit declines compared to previous quarters, and profit stabilization all following the trend line of fuel costs.
- Regulation - In the early days of 2009 in the United States, we'll see the implementation of the 10+2 rule on ocean freight and the CCSP (Certified Cargo Screening Program) for air freight. The latter will be a boon for all cargo carriers and commercial carriers with CAO flights. In the uncertainty of what is and isn't scanned, who is and isn't certified, what machine is and isn't sanctioned, and while everyone argues over the cost and who's going to pay for it, freight still has to fly and the market will simply turn to all-cargo flights until the rules are sorted out.
There will be some "wait and see" as the Obama Administration builds momentum; we won't see any changes in NAFTA or protectionism as there are more important areas for the new President to address.
In a small piece in the November 2008 issue of the weekly Journal of Commerce magazine, Nariman Behravesh, chief economist at IHS Global Insight, has some advice: "Don't get too carried away with the doom and gloom" he says. 2009 will be "a very terrible year." He looks for a modest recovery in 2010, and "by 2011, we should come roaring back. I think it's important not to lose sight of that fact."
From your mouth to God's ear, Nariman!
The following six articles appeared in December 2008:
Worst yet to come, says IATA
The International Air Transport Association Thursday said the cargo market hasn't yet bottomed out, as it reported international air traffic in October fell for the second consecutive month, Dow Jones reported.
International air freight traffic contracted 7.9 percent in October, the fifth consecutive month of increasingly severe drops.
While the drop in oil prices is a relief to airlines, their biggest threat now is recession.
E - Cargo News Asia
December 1, 2008
Airlines to lose US $2.5 billion?
The International Air Transport Association (IATA) says the industry globally will lose US$2.5 billion in 2009 with all regions except the United States expected to report larger losses than in 2008.
It also said passenger traffic overall will decline for the first time since 2001, by about three percent.
U.S. carriers will benefit from lower oil prices and cutbacks made this year and post a small profit of around US$300 million, IATA estimated.
Airlines' outlook mixed for 2009
Airlines in North America are expected to shift from huge losses to a modest profit next year, the industry's leading organization predicted Tuesday, but carriers in Europe and Asia will be moving in the other direction as losses deepen in the global economic downturn.
According to a report from the organization, the International Airline Transport Association, collective losses in the aviation industry will total $2.5 billion in 2009.
That is half the that loss that the association expects for 2008, thanks in part to operations in North America, where a sharp fall in fuel prices has brought immediate relief to airlines that did not hedge against such costs.
Unlike airlines elsewhere, several U.S. carriers were only just emerging from bankruptcy protection as oil prices were rising last year, leaving them unable to protect themselves against the surge in fuel costs. What was a problem then is now an advantage because as many non-U.S. airlines are being hit by not only a recession but also the costs of financing hedging programs they no longer need.
"The chronic industry crisis will continue into 2009 with $2.5 billion in losses," said Giovanni Bisignani, chief executive of the association, which is based in Geneva and has 230 members.
Describing the revenue environment as the worst in 50 years, he said, "The outlook is bleak."
Oil has now fallen back to around $43 a barrel but not soon enough to prevent U.S. carriers from posting what the association predicts will be $3.9 billion in losses this year, the worst regional performance in the industry.
But next year, North American airlines should reach a profit of $300 million, but the margin will be less than 1 percent, the report said.
Gert Zonneveld, an analyst in London with Panmure Gordon, said falling oil prices, which can be as much as 30 percent of an airline's cost base, were a boon for unhedged airlines.
"If fuel declines by 20 to 30 percent, even if you've got a 10 percent revenue drop, you are still better off," he said.
Oil prices, which peaked at $147.27 a barrel in July, are likely to average $60 per barrel in 2009, according to association forecasts. At the same time, overall revenue in the industry will fall by $35 billion to $501 billion, it said.
Global passenger traffic will fall faster than it did after the Sept. 11, 2001, terrorist attacks in the United States. Traffic grew 2 percent in 2008 but is expected to fall 3 percent in 2009, the association said. In 2001, it fell 2.7 percent.
Air cargo traffic is an early indicator of trends in economic growth because companies pull back on air-shipped inventory in a slowdown. The association predicted that the falloff in cargo traffic would accelerate, dropping 5 percent in 2009 after an expected 1.5 percent decline this year. In a sign that the slowdown was worsening, cargo traffic shrank 7.9 percent in October.
In Europe, where many carriers are still locked in at higher fuel hedging levels, and the biggest economies are already in recession, aviation industry losses will increase 10 times to $1 billion in 2009, the association said.
Losses for airlines in the Asia-Pacific region will more than double to $1.1 billion next year, it said. The area has a disproportionate 45 percent of the air cargo market. But Chinese exports are expected to slow, Japan is in recession, and India is expected to experience a drop in demand in the wake of the terrorist attacks in November.
Among the fast-expanding Middle Eastern airlines, losses are forecast to double to $200 million. African carriers already battling to retain market share can expect another year of losses of $300 million.
"The industry remains sick," said Bisignani, the association chief. "The ferocity of the economic crisis" had overshadowed the industry's efforts to cut costs, he said. "It will take changes beyond the control of airlines to navigate back into profitable territory."
By Caroline Brothers, International Herald Tribune
Tuesday, December 9, 2008
Asia-Pacific carriers face US$1 billion losses
Based on an average oil price of US$60 per barrel for oil and an expectation that trade will suffer, the International Air Transport Association (IATA) says Asia-Pacific carriers are going to experience heavy losses next year at around US$1 billion, twice the 2008 level.
Total revenues of the global airline industry are likely to drop by six percent to US$501 billion, against an estimated US$536 billion this year, with air cargo traffic - which accounts for about 35 of goods trade globally - experiencing a sharp drop.
Worse still, the downturn in the global airlines industry is expected to result in job losses between 300,000 and 400,000 next year.
Asia-Pacific Weekly
December 15, 2008
Cathay takes steps to address slowdown
Cathay Pacific, one of the biggest airlines in Asia, announced cost-saving measures Friday designed to shield it from the headwinds facing the industry as demand for air travel and air cargo transport declined in line with the slowdown in global economic growth.
In moves that echoed efforts across the beleaguered industry, Cathay, which caters heavily to the business community, said it would slow growth of passenger capacity and delay the construction of a new cargo terminal here.
"This is a very difficult time for our airline and for the aviation industry as a whole, and we cannot see light at the end of the tunnel at this point," Tony Tyler, the chief executive of Cathay, said in a statement, adding that the measures were necessary to "help ensure the financial health and long-term well-being of our airline."
"The plan may well have to be revised again, depending on how things unfold," Tyler added.
Airlines around the world have raced to reduce costs this year, initially in reaction to a spike in fuel prices during the first half.
Just as oil prices dropped from the high of more than $147 a barrel reached in July, the industry began to be buffeted by reduced demand for air travel as consumers pared back spending and many companies switched their travel policies away from first- and business-class tickets to less-expensive fares.
Cathay, based in Hong Kong, said it would slow the growth of its passenger capacity next year - earlier planned at 6 percent to 7 percent - to less than 1 percent. It also planned to offer its pilots and 7,000 cabin crew members voluntary unpaid leave of as long as a year.
Two freight aircraft will be idled for a year and the delivery of several new aircraft will be delayed. In an effort to cut capital expenditures next year and in 2010, the airline will also delay construction at its cargo terminal - priced at 4.8 billion Hong Kong dollars, or $619 million - which had been scheduled to begin operation in 2011.
The air freight business has been hit especially hard by the financial crisis, Cathay said. The airline, which issued its second profit warning of the year this month, said October cargo volumes had sunk 7.4 percent in what was usually a peak season for air cargo. A hoped-for post-Olympics pickup out of China also failed to materialize.
The International Air Transport Association said Thursday that passenger traffic had fallen 1.3 percent in October from the numbers for the previous month, while freight traffic had contracted 7.9 percent, making for a fifth consecutive month of severe declines.
Giovanni Bisignani, the director general of the association, said the "situation of the industry remains critical. The deepening slump in cargo markets is a clear indication that the worst is yet to come."
Korean Air, the world's largest air cargo carrier, reported a second consecutive quarter of losses this month. And Qantas on Tuesday sharply lowered its profit forecast for 2009 and said it would reduce capacity. That prompted Moody's the ratings agency, to review its rating for the Australian carrier for a possible downgrade.
"While the threat of high oil prices has receded somewhat over recent weeks," said Ian Lewis, Moody's lead analyst for Qantas, he predicted that an industry wide "rapid deceleration in consumer demand for air travel, especially premium travel, as a result of the global economic crisis" was unlikely to ease soon.
By Bettina Wassener, International Herald Tribune
Friday, November 28, 2008
Delta to cut capacity, reduce workforce
Delta Air Lines plans to cut its capacity by 6 to 8 percent in 2009 and shrink its workforce, the company announced Tuesday.
The reduction includes a domestic capacity cut of 8 to 10 percent and an international capacity cut of 3 to 5 percent.
The announcement follows Delta's 14 percent cut of domestic capacity in the second half of 2008.
Delta chief executive Richard Anderson and president Ed Bastian said in a memo to employees that the action "comes as a result of the global economic recession and weaker demand for air travel."
Delta also said it plans to cut staff through voluntary programs.
By KELLY YAMANOUCHI, The Atlanta Journal-Constitution
Tuesday, December 02, 2008
How Delta, others fit in at small airports
As airlines struggle to adjust to changing dynamics in the industry, many airports have seen reductions in flights, but some airports have lost airline service altogether.
The Air Transport Association, an airline industry group, said 97 U.S. airports have lost or will lose all commercial airline service by the end of this year. Atlanta-based Delta Air Lines, which serves 140 small communities in the United States - the most of any airline in the country - is connected to some of those cuts.
For some airports, the end of scheduled commercial flights left them with general aviation such as corporate jets and charter flights - and an airline counter that stands empty.
"When carriers cut back, these are the ones that just got thrown off the boat," said Roger Cohen, president of the Regional Airline Association.
For example, Athens Ben-Epps Airport in Georgia lost its airline service earlier this year after Mesa Air Group decided to shut down its Air Midwest Inc. operation, citing high fuel prices, insufficient demand and a "difficult operating environment."
The Athens airport got new airline service to Atlanta in late September from GeorgiaSkies, which recently announced it will add more flights on the route to its weekly schedule.
While Athens has attracted new flights, other airports haven't been as lucky - including some that had recently gotten airline service, only to quickly lose it.
The airport in Salem, Ore., has been without airline service since Oct. 9, when Delta suspended its flights on 50-seat regional jets, citing high fuel costs. Salem had not had airline service since the mid-1990s - until Delta started its Salem-Salt Lake City flights in June 2007, operated by Delta connection carrier SkyWest.
The community "put a tremendous amount of effort" into recruiting airline service, said Salem Airport Manager Alan Alexander.
"Being the state capital, we have a broad spectrum of passengers in our area that found it much more convenient to fly out of Salem," rather than nearby Portland or Eugene, which are each about an hour away via a sometimes congested Interstate 5.
Now, the Salem airport is pursuing service from another airline. "We still get calls from people who are hoping that the service will come back," Alexander said. "A lot of people in our community had come to expect it and enjoy it."
Aviation consultant Mike Boyd in Evergreen, Colo., called the Salem flights "an experiment that didn't work."
"Delta has tried that in a couple of other places," he said. But the airport didn't have enough traffic to sustain the service, and the high cost of operating regional jets also contributed to the challenge.
Delta still considers small communities "a very important part of our network because they feed the many other destinations that we serve," said Delta spokesman Kent Landers.
Other airports that have lost service include McKellar-Sipes Regional Airport in Jackson, Tenn. In January, that airport lost service to Cincinnati - a Delta hub - from Big Sky Airlines, a Delta code-share partner that was marketed as Delta Connection.
Big Sky had started the service just a couple of months earlier, but after racking up "enormous unsustainable financial losses" it shut down its Eastern operations, including flights to Jackson, and eventually liquidated.
The Jackson airport had airline service for decades, and "things were going really well until about 2001," when the Sept. 11 attacks cut into airline travel, said airport executive director Rodney Hendrix. "We've had problems since then, frankly." The airport previously had service from Corporate Airlines, which later became RegionsAir and was eventually grounded by the Federal Aviation Administration.
Since Big Sky left, "it's really been tough," Hendrix said. The airport has seen effects on fuel sales, car rentals and other businesses at the airport, along with revenues directly from fees and charges. Hertz has temporarily stopped its rental car operations at the airport.
Jackson expects to get replacement service from Great Lakes Aviation under the federal Essential Air Service program, but those plans were delayed and Hendrix expects service won't start until around next March.
One reason Jackson struggles with airline service is because of its proximity to Nashville and Memphis, another Delta hub. Larger airports tend to offer more competition, and thus, lower fares. That may have showed in Big Sky's performance. "Some days they had some full flights and they had some almost empty flights," Hendrix said.
Owensboro-Daviess County Regional Airport in Kentucky also lost service to Cincinnati from Big Sky marketed as Delta Connection in January.
"The service that we lost was devastating to the community and to the airport," said Owensboro airport director George Smith. "The airport is an economic engine for the community."
Owensboro has been successful in attracting another carrier. Earlier this month, Allegiant Air announced it will begin flying to Owensboro from Orlando starting next February.
Many airports may be eager to get sustainable airline service, but it's not always feasible, Boyd said.
"They think if you keep studying it, it's like medical science - we'll find a cure," he said. "But in many cases, you have to tell them it's not going to happen."
But, Boyd said, in some cases the community doesn't lose much when airline flights end. "You get congressmen who go nuts" over losing a flight, Boyd said. "Well guess what? No one got on it anyway."
By KELLY YAMANOUCHI, The Atlanta Journal-Constitution
Friday, November 28, 2008
Health Magazine picks America's healthiest airports
If you're traveling over the holidays, chances are you're not looking forward to spending time in a crowded, stressful airport. Faced with the prospect of long waits, deafening public-address systems, and indigestion, you may quickly lose that festive feeling.
Still, airports are not all bad. In fact, based on research Health magazine has done to find America's Healthiest airports, some are actually working hard to make your traveling experience healthier by offering nutritious food, special relaxation zones, walking paths, the latest safety technology, and a whole lot more. We scored the nation's major airports and then asked a panel of expert judges to help us choose the top 10.
Congratulations to the winners. And to those airports that failed to make our list: Please shape up!
- Phoenix Sky Harbor International
42 million passengers per year
Our top scorer won rave reviews for its commitment to a comfortable, low-stress experience for flyers. Sky Harbor's healthful dining options scored well on the annual Physicians Committee for Responsible Medicine airport-food scale, which measures the percentage of eateries with healthy offerings at major airports.
- Baltimore/Washington International - 21 million passengers per year
Baltimore/Washington International now features soft music and comfortable lighting at one of its key security checkpoints, instead of the usual crowding and confusion. The changes are part of the Transportation Security Administration's new Checkpoint Evolution program designed to reduce stress and hike safety.
- O'Hare International (Chicago) - 76 million passengers per year
Big airports usually have a great selection of healthy food, says judge Amy Lanou, Ph.D., a senior nutrition scientist for PCRM. That's one reason why O'Hare International, the second-busiest airport in the world, is in PCRM's top 10. More than 90 percent of its 100 restaurants offer low-fat, fiber-rich, veggie-heavy meals. O'Hare also wins points for its super-fun children's play areas and the fitness facility in its on-site Hilton Hotel, which offers workout equipment plus massages, a sauna, a lap pool, showers, and a Jacuzzi.
- Detroit Metropolitan - 36 million passengers per year
A white Christmas is wonderful -- except when it ruins your travel plans or makes them unsafe. Detroit Metro is working hard to limit the risks. The National Weather Service recently recognized the airport as the nation's first "StormReady airport system."
Airport police officers, firefighters, and field-maintenance and security personnel are being trained as weather spotters; if they're aware of approaching storms, they alert airline employees (who consider boarding delays), disseminate information to keep ticket-holders from being stuck at gates without knowing why, and develop evacuation and sheltering plans. And should the weather delay you in Detroit (always a possibility during the winter), finding a healthy meal is easy. The airport partners with local health organizations to flag heart-healthy dishes on restaurant menus.
- Denver International - 50 million passengers per year
The largest airport in the United States can also boast about its energy efficiency. Acres of solar panels provide enough electricity to run half the airport's train system. The green electricity dramatically reduces carbon emissions -- equal to the impact of 255,000 gallons of gasoline (enough to power 500 cars for a year). The airport also has a recycling system built into the runways and taxiways to collect 70 percent of the glycol used to de-ice aircraft.
- Washington National - 19 million passengers per year
Anything that helps you take your mind off the fact that you're in an airport waiting to be crammed into a tiny airplane seat is a good thing. The museum-quality artwork at Ronald Reagan Washington National is the perfect diversion. Architect Cesar Pelli integrated 30 works -- stained glass, marble and glass mosaics, terrazzo, cast bronze, hammered aluminum and copper, and traditional paint on board and canvas -- into terminals B and C.
- Dallas/Fort Worth International
60 million passengers per year
There's no better place for a family layover than Dallas/Fort Worth International (DFW), which has two 600-square-foot play areas that feature padded airplanes, taxis, and luggage for climbing, plus a TV showing kids' cartoons. DFW also scores high for its green fleet. Of the airport's 580 vehicles, from buses to lawn mowers, 540 are hybrids or run on compressed natural gas.
- Logan International (Boston) - 28 million passengers per year
If you're a green fanatic, you'll love this: Logan's terminal A, its biggest, is the world's first airport terminal certified by the U.S. Green Building Council for using the highest green construction standards. It features roofing that reflects heat, special stormwater-filtration devices, low-flow faucets, waterless urinals, self-dimming lights, recycled construction materials, and more. And Logan's compressed-natural-gas shuttle buses prevent 7 tons of pollution emissions from reaching the atmosphere and causing smog every year, the equivalent of taking nearly 800 cars off the road. You care more about comfort than the environment? Logan pampers all weary travelers with 50 wooden rocking chairs, 16 decorated by local artists.
- Portland International (Oregon) - 15 million passengers per year
You'd expect an airport in the crunchy Northwest to go all-out for the environment. Portland doesn't disappoint with a paved bicycle-and-walking path that links local hotels, businesses, and regional hiking and biking trails to the airport. The airport offers free covered bicycle parking adjacent to the terminal, too. Our judges also laud Portland's recycling of cooking oil into biodiesel fuel, the abundance of live trees in the terminals, and the musicians -- mostly local stationed throughout the airport to lower the stress level.
- Philadelphia International - 32 million passengers per year
If you get sick at the airport, what do you do? In Philadelphia you can head straight to the new AeroClinic, where nurse practitioners and physician assistants can diagnose and treat minor conditions like colds, allergies, and flu. The facility also offers well-care checks for people who have high blood pressure, cholesterol, thyroid problems, and diabetes.
By Linda Formichelli, www.cnn.com
December 16, 2008
Book Review: The Green Collar Economy
By Van Jones
Van Jones is one busy man. Based in Oakland, CA, the civil rights and environmental activist has been working tirelessly for the last decade and a half - first as the co-founder of the Ella Baker Center for Human Rights, then Color of Change - two social justice organizations striving to give positive alternatives and a political voice to vulnerable communities. Most recently, Jones is the founder of Green For All, a national initiative committed to creating "green pathways out of poverty" and advocating "green-collar jobs for all."
His latest book, The Green Collar Economy, discusses the social, economic and political implications of the "green-collar job" (a term that's being bandied around a lot nowadays). Jones defines a green-collar job as a "family-supporting, career-track job that directly contributes to preserving or enhancing environmental quality," but is also part of what he calls the "one solution [to] fix our two biggest problems" - namely, poverty and our environmental crisis. You may ask: what does environmentalism have to do with alleviating poverty?
According to Jones, it has everything to do with it - and his simple premise has a populist but pragmatic ring to it. By directly engaging working-class, low-income and urban communities in the retrofitting, weatherizing and solarizing of America, not only will they benefit from hundreds of thousands of non-exportable jobs in the emerging green economy, but they will also represent the pivotal force sorely needed to turn America's environmental tide.
Book Review by Kimberley D. Mok, Tree Hugger, www.treehugger.com
Recommended by The Green Exchange, www.greenexchange.com
Continental Airlines to start New Year with flight powered by sustainable biofuels
Continental to be first carrier in the Americas to conduct biofuel flight in partner- ship with Boeing, GE Aviation, CFM International, and Honeywell's UOP Demonstration marks the continued evolution toward low-carbon-lifecycle fuels
Continental Airlines today announced plans for the first biofuel-powered demonstration flight of a U.S. commercial airliner, to be conducted in Houston on Jan. 7, 2009.
The demonstration flight, which will be operated with no passengers, will be powered by a special fuel blend including components derived from algae and jatropha plants -- sustainable, second-generation fuel sources that don't impact food crops or water resources, and don't contribute to deforestation.
Continental has partnered on this project with Boeing (NYSE: BA); CFM International, a 50/50 joint company of General Electric Company and Snecma (SAFRAN Group); refining technology developer UOP (NYSE: HON), a Honeywell company; and oil providers Sapphire Energy (algae) and Terrasol (jatropha).
The demonstration flight will be the first biofuel flight by a commercial carrier using algae as a fuel source and the first using a two-engine aircraft, a Boeing 737-800 equipped with CFM International CFM56-7B engines.
The fuel used in one of the two CFM engines during the demonstration flight will be a blend of 50 percent traditional jet fuel, and 50 percent biofuel from algae and jatropha.
Operating under a specially-issued "Experimental" aircraft type certificate, the aircraft will be crewed by Continental's own FAA-licensed test pilots. With no passengers on board, the flight test plan calls for operating the No. 2 (right) engine on the special biofuel blend, including power accelerations/decelerations, in-flight engine shut-down and restart and other flight maneuvers that include both normal and non-normal procedures. Numerous flight parameters will be recorded, and a post-flight engine analysis will contribute to findings which are expected to show that the biofuel blend is readily substitutable for regular fuel without any degradation of performance or safety, and with a net reduction in carbon emissions.
"This flight represents another step in Continental's commitment to reducing carbon emissions and identifying sustainable, long-term fuel solutions for the aviation industry," said Continental Chairman and Chief Executive Officer Larry Kellner.
Continental, Boeing, UOP and CFM have worked together for more than nine months on the research, production and testing of the biofuel, including laboratory and ground-based jet engine performance testing to ensure compliance with stringent aviation fuel performance and safety requirements.
As part of a broader industry effort, Boeing and other industry leaders, including airlines and engine manufacturers, are helping to guide the aviation sector toward sustainable biofuels produced through advanced biomass conversion technologies and processes that have the potential to reduce greenhouse gases throughout their lifecycle. Sustainable biofuels for aviation incorporate second-generation methodologies relative to fuel source selection and processing, which are uniquely suited for aerospace use. These biofuels can then be blended with kerosene fuel (Jet-A) to reduce dependency on fossil fuels.
Continental's participation in this project is part of a company-wide commitment to environmental responsibility. On average, Continental burns approximately 18 gallons of fuel to fly one mainline revenue passenger 1,000 miles, which represents a 35 percent reduction in greenhouse gas emissions and fuel consumption since 1997. This is due in large part to the efforts of its employees in streamlining operational procedures and to an investment of more than $12 billion to acquire 270 fuel-efficient Boeing aircraft and related equipment. Continental remains committed to further improving fuel efficiency in the decade to come, including investing in its fleet with orders for more than 50 Boeing 737-900 Next Generation aircraft, and 25 Boeing 787 Dreamliners.
Continental has also reduced, by 75 percent, nitrogen oxide emissions from ground equipment at the carrier's largest hub, in Houston, through switching to electric ground service equipment and other new technology. This technology is now being tested for use in cold climates.
Through these investments and other projects, including the construction of airport facilities in an environmentally responsible manner, the testing of alternative fuels in ground service equipment, offering a credible carbon offsetting program based on the actual fuel burn of the Continental fleet, and an expansive recycling program, Continental will continue to manage the environmental impact of its business.
Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,500 daily departures throughout the Americas, Europe and Asia, serving 134 domestic and 131 international destinations. More than 675 additional points are served via alliance partners. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year.
Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. For the fifth consecutive year, FORTUNE magazine named Continental the No. 1 World's Most Admired Airline on its 2008 list of World's Most Admired Companies. For more company information, go to continental.com.
HOUSTON, Dec. 8 /PRNewswire-FirstCall/
NWA invests in light-weight cargo containers
Northwest Airlines Cargo has invested $7 million in weight-efficient LD3 cargo containers from Aerobox.
The carrier has replaced all of its 5,000 aluminum LD3's with the poly-propylene containers. "We rarely replace the entire fleet if anything," said Tom Bach, president of NWA Cargo. "The whole rationale behind it is so compelling - the weight savings, which is really fuel savings."
Back said the LD3 replacement is one of the first capital requests at NWA that came with a "green" element. "We did a 15-year projection of the current [aluminum] fleet verses the new fleet. There's significant savings in repairs."
NWA Cargo is in the process of recycling the aluminum containers for scrap and investing the cash back into its business.
Weighing in at 149 lbs., the new LD3's are far lighter than their predecessors, and Bach says the carrier even saved an additional pound. During the 9 to 12 month evaluation period, NWA Cargo investigated a variety of options and the Aerobox container at the time weight 150 lbs. - one pound heavier than the final product. "It was the lightest and most durable option," he added.
The carrier has also upgraded engines on five of its 12 747 freighters. "We've upgraded engines on every aircraft that can be upgraded," Bach said. The company is retiring its three most fuel-inefficient planes.
NWA Cargo is also extending its sustainability mentality to other areas. "We have a capital request to get our first alternative-fuel-powered ground equipment, and a forklift is our first request."
Bach added that Northwest "will absolutely continue green initiatives in the newly combined NWA/Delta fleet. I get the sense from Delta that they're as interested in this as we are. Their mindset is the same as ours."
Air Cargo World
November 2008
If you have any questions or comments regarding the Air eNewsletter,
please contact Joseph Hoban from the AIT Air Department. |
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