‘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
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