Fuel Conservation.

The airlines industry is very sensitive to fuel prices as it make up between 30 to 40 percent of the operating cost. For an airlines with RM13B annual revenue, an increase of crude oil price of 1USD per barrel could easily impacted the bottom line by as much as RM50M annually. To mitigate fluctuation in fuel prices financial mechanism like fuel surcharge and fuel hedging has been put in place recently.
Various step being taken to reduce wastage of fuel, for example usage of jet engine on the ground is being kept to the very minimum. To power the aircraft on the ground alternative power source like ground power unit is being used. Operation in the air being optimised by flying at the ideal altitude and cruising at the right speed. The implementation of such measure require cooperation from various quarters including the pilot and the maintenance crew.

In the 60s crude oil price was 3usd per barrel, now it is costing 116usd per barrel.

(Up date 3rd July 2008)

Cost of fuel continues to soar. To day it went above 144usd per barrel. The list of airlines joining bankruptcy list is getting longer. In the last six months, 24 Airlines had either stopped operating or had gone bankrupt. The surviving one is talking of cutting services this coming winter pattern. Mean while cost cutting measure being implemented more rigorously. Except for areas involving safety and security the rest not being spared including passenger comfort and convenient.

Recent fuel hike by government too is complicating the issue as airlines have to fork out more to run their support services.

(Update 18.10.08)

Fuel price had gone down to 70-80 USD per barrel. Airlines can breath a little bit easier now. How ever with recession looming the market is shrinking.