4 airlines cutting costs differently

4 airlines cutting costs differently

In Airlines, Asia, Featured on App, Low Cost Airlines, Strategy by lornaLeave a Comment

4 airlines cutting costs differently

Which airlines are cutting costs differently? With sky high costs, the airline industry is always on the hunt for methods and strategies to reduce the costs incurred. Here’s some innovative ways airlines are slashing their costs down.

  • Air Canada

Air Canada are cutting costs by replacing paper manuals with iPads. Yeah, nothing new, iPads – whatever. BUT each of their manuals weight 35 pounds. Each pilot needs a manual meaning they could potentially add more than 100 pounds of weight to long-distance flights that require larger cockpit crews.

They’re therefore saving fuel due to weight reduction and the digital manuals can be updated more regularly, increasing efficiency and reducing fuel consumption.

  • Delta Airlines

Fuel costs are one of the biggest costs incurred by airlines. Delta have purchased their own oil refinery to process their fuel. The refinery doesn’t protect Delta from fluctuations but it does reduce the crack spread between crude oil and refined jet fuel.

The refinery is seen as a long-term, cost-saving project that will balance out the losses made in its first few quarters. And they were right – Delta’s third-quarter 2013 results showed a small profit of $3 million.

  • United Continental

Adding new aircraft to an airlines fleet can cut fuel costs but are often expensive and usually mean long waiting periods. United Continental have been modifying their existing fleet while adding Boeing 787 airlines to the fleet.

One example of  modifying the existing aircraft is them adding winglets to reduce drag and cut fuel consumption.

  • AMR

Bankruptcy is not an option any company wants to take – however, AMR used the restructuring process for other reasons. Forecasting a rocky time ahead, AMR filed for bankruptcy in 2011 despite having around $4 billion in cash on hand and no near-term debt issues.

But now they have cut labour costs dramatically and brought the cost structure in line with other rivals who went  through bankruptcy.

What do you think of these airlines cost cutting methods? Should others be adopting their strategies?

Read the full article on Motley Fool to find more advice on creative methods for cost cutting and to find out who the two top cost cutting airlines are.

Discuss how to cut costs with the experts and some of the biggest airlines in the world at the World Low Cost Airlines Congress Asia Pacific next February. Find out more about how to join us in Singapore here.

Find us on Google+

Leave a Reply