Air India strike: labour cost analysis

Ghosh, D. (2011, May 2). Air India strike: labour cost analysis. Airline news India. Retrieved July 15, 2011 from  http://www.airlinenewsindia.com/2011/05/air-india-labour-cost-analysis.html




Air India has been operating at a loss for quite some time now. Air India management is not ready to negotiate with the pilots on the salaries in-spite of a crippling strike.

To further investigate the logic, I have performed a quick and dirty analysis of the labor costs of Air India and compared it to the industry average in the US. Of-course, the economic conditions and the maturity of the sector in the two countries are totally different. However, the analysis threw up some interesting facts. Below is an excerpt from the income statement (INR) of Air India for the year 2009-2010.

Source: Air India Annual Report 2009-2010

If you will observe, fuel costs are a major component of Air India's costs. This is not in Air India's control and both airlines in the US and India suffer from the same fluctuations and hikes in fuel prices. The tables below give the labor cost as percentage of total operating costs. The figures for Air India have been converted to USD at INR 44 = 1 USD.

Source: Air India Annual Report 2009-2010

Source: Annual Reports of Continental, Delta, American, US Airways and Southwest for 2009-2010

The figures for Air India and the US industry average are almost the same when fuel cost is taken into the final Total Operating Cost. When fuel cost is taken out of the equation, the difference in even more. So, my question is why is Air India management playing hardball with the pilots when it should be concentrating on turning around the airline, something it can't do without its labor force which includes pilots?

Rising fuel costs spur airlines to go green

Brands, S. (2009, March 17). Rising fuel costs spur airlines to go green. Sustainable Life Media. Retrieved July 7, 2011 from  http://www.sustainablelifemedia.com/news_and_views/articles/rising-fuel-costs-spur-airlines-go-green

March 17, 2009 - Airlines are trying everything from biofuels to cross-polar flight paths in a bid to boost fuel efficiency as costs rise and profit margins shrink.

A Reuters dispatch from the recent ITB Berlin travel conference highlights some of the fuel-saving strategies that are taking off within the aviation industry:

• Powering aircraft with biofuels. Boeing environmental strategist Billy Glover predicts that commercial airlines will be begin blending biofuels with traditional kerosene jet fuel within the next five years, although he concedes that the percentage will likely start small. Virgin Atlanticand Air New Zealand are just two of the airlines currently testing their biofuels options.
• Rejuvenating aircraft fleets. Lufthansa has set a goal to cut the average age of its fleet 7% by 2011 - 10.5 years. By comparison, budget airline Ryanair operates a fleet averaging just 2.5 years.
• Landing more efficiently. Air traffic jams burn through fuel as planes circle waiting for their turn to land. Boeing reports that its customized landing-path program, currently in pilot phase, saved more than 1 million pounds of jet fuel in 2008.
• Reducing flight distances. Emirates, a Dubai-based airline, in December began routing its Dubai-to-San Francisco flights over the North Pole instead of through Asia. The more direct flight path saves about 2,000 gallons of fuel, Emirates says. (Emirates has experimented with creative fuel-saving solutions in the past. Last July the carrier banned in-flight magazines from its Airbus 380s in an effort to reduce aircraft weight.)

The global aviation industry accounts for 6% of fossil fuel consumption and 2% of greenhouse gas emissions annually.

Information about biofuel

Alternative Energy. (2011). Information about biofuel. Alternative Energy. Retrieved July 19, 2011 from :  http://www.altenergy.org/renewables/biomass.html



The term "biomass" refers to organic matter that has stored energy through the process of photosynthesis. It exists in one form as plants and may be transferred through the food chain to animals' bodies and their wastes, all of which can be converted for everyday human use through processes such as combustion, which releases the carbon dioxide stored in the plant material. Many of the biomass fuels used today come in the form of wood products, dried vegetation, crop residues, and aquatic plants. Biomass has become one of the most commonly used renewable sources of energy in the last two decades, second only to hydropower in the generation of electricity. It is such a widely utilized source of energy, probably due to its low cost and indigenous nature, that it accounts for almost 15% of the world's total energy supply and as much as 35% in developing countries, mostly for cooking and heating.
Biomass is one of the most plentiful and well-utilised sources of renewable energy in the world. Broadly speaking, it is organic material produced by the photosynthesis of light. The chemical material (organic compounds of carbons) are stored and can then be used to generate energy. The most common biomass used for energy is wood from trees. Wood has been used by humans for producing energy for heating and cooking for a very long time.
Biomass has been converted by partial-pyrolisis to charcoal for thousands of years. Charcoal, in turn has been used for forging metals and for light industry for millenia. Both wood and charcoal formed part of the backbone of the early Industrial Revolution (much northern England, Scotland and Ireland were deforested to produce charcoal) prior to the discovery of coal for energy.
Wood is still used extensively for energy in both household situations, and in industry, particularly in the timber, paper and pulp and other forestry-related industries. Woody biomass accounts for over 10% of the primary energy consumed in Austria, and it accounts for much more of the primary energy consumed in most of the developing world, primarily for cooking and space heating.
It is used to raise steam, which, in turn, is used as a by-product to generate electricity. Considerable research and development work is currently underway to develop smaller gasifiers that would produce electricity on a small-scale. For the moment, however, biomass is used for off-grid electricity generation, but almost exclusively on a large-, industrial-scale.

Fly the green skies: Four eco-friendly airlines

Goligoski, E. (2009, April). Fly the green skies: Four eco-friendly airlines. Divine Caroline. Retrieved July 7, 2011 from  http://www.divinecaroline.com/30/72639-fly-green-skies-four-eco-friendly/2

On a recent holiday weekend flight between two West Coast cities, I thought about the thoughtful and harmful things my travel companion and I had done in regards to the environment the day we traveled. We’d recycled, turned down our thermostats, and taken public transportation to San Francisco International Airport (whose low-flow toilets and green rental car program get industry kudos). But we also threw out Styrofoam cups, idled on a runway while our plane wasted fuel, and were picked up in an SUV. Could we have been more conscientious about the effect our travel choices have on the planet?

It’s no surprise that flights were the most negatively impactful part of our trip. Fortunately, research into more efficient engines and alternative fuels has been promising in the past few years, and travelers now face more options when it comes to choosing airlines with sustainable business practices. Although major policy and research decisions on air travel efficiency are out of the hands of most consumers, we can positively impact where the industry is headed through our choice of carriers.

Green Good Deeds: Choosing Airlines Beyond FaresA few airlines have demonstrated leadership and commitment to eco-friendlier travel through their use of alternative fuels over long distance flights and willingness to work with one another. Some have also made a splash with their research and use of sustainable biofuels—fuels made from biological material high in sugar and oil—that are different from the fossil fuels currently being tapped out. The Central American airline NatureAir, the first certified carbon-neutral airline, runs its ground vans with biofuel created from cooking oil to protect forests in Southern Costa Rica where it operates. Although foreign airlines have received the most media attention for green good deeds (for example, British Airways’ sustainable biofuel research partnership with engine maker Rolls Royce and Emirates Airline’s longest green flight between San Francisco and Dubai), several domestic carriers deserve a nod for their environmental efforts.

Southwest Airlines
After working to save $42 million in fuel in 2008 by extending each flight by one to three minutes (slowing down improves engine efficiency and ultimately saves fuel, just like it does for drivers), Southwest’s cross-departmental green team pushed for more environmental and profit-friendly innovation by introducing employee ride-share programs on the ground and adding winglets to the end of plane wings to save nearly 30 million gallons of jet fuel annually. As part of the Environmental Protection Agency’s Blue Skyways Collaborative, the airline also works to voluntarily reduce its emissions and share technological expertise with other service companies.

Virgin America
The new kid on the block has the youngest fleet among major U.S. airlines, making it an estimated 30 percent more carbon- and fuel-efficient than other carriers. In the style of other Virgin Group companies (including Virgin Atlantic, whose London to Amsterdam flight powered by a biofuel combination of babassu and coconut oil gained public attention last year), a portion of the domestic airline’s profits go into renewable fuel research. Virgin America also uses single-engine taxiing and cruise speed regulation on every flight to reduce climate change impact.

Alaska Airlines
This airline makes corporate gifts to the Nature Conservancy and started a Green Miles nonprofit program so that customers could support the organization’s efforts to conserve the Pacific Northwest by donating miles they’ve earned. Onboard, Alaska recycles in-flight magazines printed with soy-based inks as well as bottles of the socially conscious Jones Soda that the airline serves instead of major cola products.

American Airlines
In April, responsible travel news provider TerraCurve reported that American Airlines is flying the first of the nearly eighty more efficient Boeing 737-800 planes it will be adding over the next two years. Each new plane will burn about 28 percent less fuel per mile than current planes.

American Airlines also was the first major airline to join the EPA’s Climate Leaders program, of which Virgin America is the only other participating airline and Boeing is the only aerospace member. Companies in the industry-government partnership commit to reduce their environmental impact by completing inventories of their greenhouse gas emissions and by setting reduction goals. All members agree to report their progress to the EPA annually. American has committed to a 30 percent reduction in its greenhouse gas-intensity ratio by 2025. Virgin’s greenhouse gas reduction goals are still said to be being developed, and the airline is the first to commit to report its emissions to the nonprofit Climate Registry.

These days, we don’t have to dive into aviation industry communications to make savvy travel choices; more lifestyle news outlets have begun covering the topic due to increased consumer interest in eco and cost-saving coverage. Several airlines have also started making their environmental statements and assessments easily available online with American Airlines, Southwest, and JetBlue leading the charge.

Via http://www.divinecaroline.com/30/72639-fly-green-skies-four-eco-friendly/2#ixzz1SyYQAXNU

Business travelers starting to demand green lodging

Ehotelier. (2008, June 27). Business travelers starting to demand green lodging. Ehotelier.com. Retrieved July 21, 2011 from http://ehotelier.com/hospitality-news/item.php?id=A13936_0_11_0_M

While some hotels are savvy enough to promote their environmental practices, most are not doing enough to satisfy business travelers who are increasingly demanding green accommodations.

More than a third "seek out hotels that are environmentally friendly," according to a new survey of 1,155 business travelers commissioned by Big Four firm Deloitte. The survey says 38 percent have researched green lodging facilities, while 28 percent say they're willing to pay 10 percent more for green accommodations.

Business travelers expect hotels to recycle (77 percent), and use energy-efficient lighting and windows (74 percent and 59 percent, respectively). To a lesser extent, they expect hotels to give guests the option of not having sheets and towels changed every day (52 percent). Using environmentally safe cleaning products is expected by 49 percent of those surveyed.

"We found there is often a discrepancy between what travelers expect of hotels and the green initiatives that hotels ultimately undertake," says Neale Redington of Deloitte. For example, 30 percent say they have asked that linens not be changed, but the hotel laundered them anyway.

The survey suggests hotels should pay closer attention to their environmental practices if they expect to draw business travelers to their doors.

Among some hotel chains, green marketing is the new big thing. New York Times reporter Joe Sharkey wrote that he was awakened at 3 a.m. recently by a blinking red message light on his phone in a Marriott in Marco Island, FL. Upon hearing the message, he was startled to find it was not an urgent business matter, but a "friendly reminder" to close his blackout curtains by 9 p.m. to keep the beach dim during sea turtle mating season.

"More and more business travelers, and especially the younger ones, are discussing these things," Adam F. Weissenberg, who heads the Deloitte USA hospitality division, said in the Times. "This is not a passing fad. And for the younger generation, this is huge stuff."

Source: accountingweb.com

Boeing

Boeing. (2011, June 16). Boeing 747-8 freighter to fly to Paris air show on sustainable biofuel. Boeing Media. Retrieved July 21, 2011 from http://boeing.mediaroom.com/index.php?s=43&item=1783

SEATTLE, June 16, 2011 /PRNewswire/ -- Boeing (NYSE: BA) will fly the new 747-8 Freighter to its international air show debut in a doubly historic fashion, flying the airplane across the Atlantic Ocean to the Paris Air Show using a renewable aviation jet fuel – the world's first transatlantic crossing of a commercial jetliner using biologically derived fuel.

Boeing pilots Capt. Keith Otsuka and Capt. Rick Braun and Cargolux Capt. Sten Rossby will fly the airplane with each of the 747-8 Freighter's four GE GEnx-2B engines powered by a blend of 15 percent camelina-based biofuel mixed with 85 percent traditional kerosene fuel (Jet-A). The airplane is scheduled to arrive at Le Bourget Airport Monday at about 5 p.m. Paris local time (15:00 GMT) after a 4,989-mile (8,029 km, 4,335 nautical mile) trip.

"This historic flight is a boost to aviation's efforts to reduce carbon emissions and improve efficiency in all phases of our industry," said 747-8 Vice President and General Manager Elizabeth Lund. "And the 747-8 Freighter fits in well with these efforts by bringing huge improvements in fuel efficiency, lower carbon emissions and less noise."

Camelina, the plant source used to create the biofuel, was grown in Montana and processed by Honeywell's UOP. Boeing does not need to make any changes to the airplane, its engines or operating procedures prior to departure to accommodate biofuel use. Normal flight parameters are being followed and were approved in advance by the U.S. Federal Aviation Administration.

The airplane will be on static display at the Paris Air Show June 21 and 22. It is scheduled to leave the air show the evening of June 22 and fly to Cargolux headquarters at Luxembourg for a two-day visit. Cargolux is scheduled to take delivery of the first 747-8 Freighter to enter service this summer.

The 747-8 Freighter is the new high-capacity 747 that will give cargo operators the lowest operating costs and best economics of any freighter airplane while providing enhanced environmental performance.

Aviation biofuel use

ASTM International, the global standards body that oversees the jet fuel specification in North America, recently approved an amendment to the current specification to include fuels from bio-based sources. The revised jet-fuel specification will be published later this year, allowing use of the new fuels without special approval. Industry efforts will shift to ramping up production and work to ensure the sustainability of fuel sources being considered.

Plant-based biofuels provide a net reduction in carbon due to absorption of CO2 during the growth phase, and are a key element of aviation's strategy for achieving carbon-neutral growth beyond 2020. Boeing, Honeywell's UOP, GE and other industry leaders have worked for the past five years on sustainable aviation biofuel development including commercial and military flight test programs, laboratory and ground-based jet engine performance testing to ensure compliance with stringent aviation fuel performance and safety requirements.

Camelina, an energy crop grown in rotation with dry wheat, is one of the biofuel sources identified during a comprehensive regional analysis conducted by Boeing and others in the Northwestern U.S. as part of the Sustainable Aviation Fuels Northwest project (www.safnw.com). Boeing is guiding regional biofuel assessments in Australia/New Zealand, Mexico, United Arab Emirates and China to identify potential fuel sources that don't compete with food or fresh water resources or contribute to deforestation. The end goal is to establish regional supply chains that produce aviation biofuel for blending with Jet-A, reducing the industry's dependency on fossil fuels.

Contact:
Jim Proulx
+1-206-850-2102
Jim.proulx@boeing.com

Terrance Scott
+1-206-766-2949
Terrance.scott@boeing.com

More information: www.boeing.com

SOURCE Boeing

US told to go green on carbon emissions or lose EU flights

Mllmo, D. (2008, March 15). US told to go green on carbon emissions or lose EU flights. Guardian. Retrieved July 21, 2011 from http://www.guardian.co.uk/environment/2008/mar/15/carbonemissions.travelandtransport

US airlines must pay for their carbon dioxide emissions or face a curb on flights to the European Union, the EU transport commissioner warned yesterday.

The green ultimatum was issued by Jacques Barrot as the transatlantic airline market undergoes its biggest shakeup in 30 years when limits on flights between the EU and US are lifted this month. Barrot said negotiations on a second phase for the treaty will include a demand that US carriers join the EU emissions trading scheme or an equivalent system in the US.

He added that requests by Washington for data on passengers overflying the US are disproportionate and will not be accepted by the EU, which fears that security measures across the Atlantic are becoming too draconian.

However, the environmental dispute with the US, which is refusing to let airlines join a carbon trading scheme, is likely to escalate following Barrot's comments on "open skies" negotiations.

Discussions on a second phase with the US department of transportation begin in May and Barrot said the EU had the power to withdraw flying rights if a deal is not reached.

"It's always possible to imagine reducing the number of flights or suspending certain rights," he said, adding that a member of the US Congress environment committee believed a deal will be possible once the Bush administration ends.

"He told me that attitudes are changing. Particularly with Bush and Cheney gone, there is a real hope of things moving on. The new administration will be under pressure to take new measures."

EU airlines must join the emissions trading scheme in 2012, which could add up to £13 to the price of a return flight as carriers buy "carbon credits".

All airlines flying in and out of the EU must subscribe to the scheme but the International Air Transport Association has warned that 170 countries oppose the move.

European carriers want foreign rivals coopted on to the scheme because airlines who refuse to buy carbon credits will offer lower fares. The transport secretary, Ruth Kelly, also waded into the argument last year, accusing the UN's International Civil Aviation Organisation of committing a "very great failing" in not setting up a global emissions scheme for airlines.

Barrot will also demand that the US government lift restrictions on foreign ownership of airlines and accept EU security procedures. Under the open skies terms, EU states can suspend flights from the US to Europe if insufficient progress is made on a second phase by 2010. The suspensions can take place from 2012.

Barrot described a request for data on all passengers flying over the US as excessive. "Any demand has to be a proportionate response to existing security problems."