‘Fuel Tankering’ Shines a Poor Light on Airline’s Claims of Environmental Concern

In today’s business media, the concept of ‘fuel tankering’ has been highlighted, particularly with regards to the practices of British Airways (although, it is an industry-wide practice) so as to bring forward the story that airlines who claim to consider the environmental impact of their business are, in fact, prioritising profits. In this post we will examine the practice, its effects, and what the industry is claiming it will do to respond to the criticism.

‘Fuel Tankering’, as a practice, describes when an aircraft will carry more fuel than is required for the flight in order to reduce the amount required, or remove the need to refuel at all, at a destination airport. The reason that an airline would do this is because different airports charge different prices to refuel at their airport. According to industry research, fuel makes up between 17 and 25% of an airline’s operating expenses, and it has been confirmed that airlines will have software packages that calculate whether it is profitable to add the extra fuel at a given airport and not at others. To note, this ‘extra’ fuel relates to fuel that is added to an aircraft over-and-above the fuel required for the trip and the reserve. Research suggests that, in Europe alone, almost 20% of all flights are ‘tankered’, with qualitative research suggesting that 90% of these flights are tankered for the purposes of profit alone, rather than the 10% for potential disruption to the fuel supply line etc.  

However, there is a glaring problem when the practice is examined further. Not only does moving this extra weight increase the emissions of the aircraft, but the savings can often be as little as £10 for that particular flight. The resultant emissions can equate to the output of one person’s emissions on a trans-Atlantic flight, with the media today utilising sensationalist but accurate figures like ‘the practice on European routes could result in additional annual greenhouse gas emissions equivalent to that produced by a town of 100,000 people’. This has caused a wave of controversy, with Greenpeace arguing that this was a ‘classic example of a company putting profit before planet’, and Professor Lewis of UCL labelling Ryanair’s tree planting schemes as a ‘green gimmick’. The figures themselves do not reflect well on the airlines – an example used in the media was of a BA flight to Italy that had almost three extra tonnes of fuel on board, for a saving of £40; the aircraft emitted an additional 600kg of CO2 in the process. In response Willie Walsh, the CEO of BA, confirmed that his airline did tanker fuel (he cites the price difference between Glasgow and Heathrow, where Glasgow is 25% more expensive as a clear example of why the practice is undertaken) but that it was ‘maybe the wrong thing to do’ and that the issue may lay in the incentivising of managers. How, and if the airline responds to this criticism, remains to be seen.

The issue within the sector is clearly cost. A story today, also relating to the sector, talks of a whistleblower who is claiming that Boeing are fitting defective parts to their planes to save money, and that a number of other whistleblowers have reported the company to regulators regarding the working practices experienced by its employees. In responding to the criticism, it was telling that Walsh immediately brought up the massive price difference between Glasgow and Heathrow, perhaps just emphasising that in this particular marketplace separating oneself from the crowd, at the cost of profitability, is too dangerous a game. The likelihood of airlines making this move is minimal, meaning there will have to be cross-border and/or international regulations on the practice, or on the cost of fuel. It has been noted that in other industries – like shipping – aspects such as speed-control have had a positive impact on emissions etc., but it is difficult to see how that could be transposed onto the airline industry. Regulators have not been forthcoming on the issue, with airlines attempting to take the lead on ‘turning their attention’ to the practice. If that is what will be the driving force in changing the practice, then there may be a long wait.

Keywords – airlines, emissions, environment, business, @finregmatters