Airfare Fuel Cost Model

Airfare Fuel Cost Airfare Fuel Cost Model Model TRAVEL ANALYTICS INC Finding Bigger Savings Finding Bigger Savings Faster Faster SM April 2006 April 2006


TRAVEL ANALYTICS INC. Airfare Fuel Cost Model. April 2006. Finding Bigger Savings Faster SM. Purpose of This Model. Airfares have increased significantly since 2004 Airlines typically point to the dramatic rise in jet fuel prices as a driver of the fare hikes - PowerPoint PPT Presentation

Transcript of Airfare Fuel Cost Model

Page 1: Airfare Fuel Cost Model

Airfare Fuel Cost ModelAirfare Fuel Cost Model


Finding Bigger Savings Faster Finding Bigger Savings Faster SM

April 2006April 2006

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Purpose of This Model Airfares have increased significantly since 2004

Airlines typically point to the dramatic rise in jet fuel prices as a driver of the fare hikes

Many corporate buyers are sympathetic to the airlines’ need to pass fuel costs on to buyers

Fare hikes that exceed the cost of jet fuel should be fair game for negotiations

This Model Helps Buyers Recognize This Model Helps Buyers Recognize Fair Fuel Cost-based IncreasesFair Fuel Cost-based Increases

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Using This Model Travel Analytics has supplied several reference points

regarding Average fuel efficiency by aircraft type Historic spot prices for U.S. jet fuel Distances for some major markets

Users are encouraged to print this document before using the model

The user will need to put this file into “Slide Show” mode in order to use the dynamic properties of the model Go to View; Slide Show Or press the F5 function key

Once the file is in Slide Show mode, then move the sliders on the last page to reflect the values you wish to model

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Fuel Cost Model Reference Points2004 Aircraft Fuel Efficiency by Body and Aircraft Type

Body Type Aircraft Type RPM/GallonNARROW BODY

Airbus A300 Series 51.6 Boeing 727 34.3 Boeing 737 50.0 Boeing 757 52.8 Mcdonnel Douglas DC-9 & Md-90 37.7

Average 45.3

WIDE BODYAirbus A300 Series 49.6 Boeing 747 40.7 Boeing 767 & 777 46.5 Lockheed L-1011 41.6 Mcdonnell Douglas DC-10 & MD-11 43.7

Average 44.4 REGIONAL JET

British Aerospace Bae-146 25.6 Canadair Rj Series 35.9 Boeing 717 & 737 38.9 Embraer 135, 140, & 145 29.1 Fokker 100 30.1 Mcdonnell Douglas Dc-9 28.0

Average 31.2 Notes: RPM = Revenue Passenger MileBased on 75% Load FactorsSource: U.S. Department of Energy, 2004 data

U.S. Spot Jet Fuel PriceCents per Gallon

2-Jan 30-Jun2001 72 76 2002 59 70 2003 90 79 2004 100 111 2005 116 166 2006 184

Source: U.S. Dept. of Energy

City PairDistance (Miles)

D.C.-New York 214 Atlanta-Philadelphia 666 Atlanta-Dallas 716Dallas-Chicago 801 Denver-Chicago 885 D.C.-Dallas 1,180 Dallas-New York 1,361 Chicago-San Francisco 1,841 Atlanta-Los Angeles 1,940 Los Angeles-Philadelphia 2,395 Boston-San Francisco 2,696 New York-London 3,441 New York-Paris 3,622 New York-Hong Kong 8,044

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About Travel Analytics We provide sophisticated negotiating and spend

management services to corporate and government travel buyers worldwide

Our support services include Savings diagnostics Airline contract analysis Airline negotiation support Strategic sourcing project management Spend analysis and reporting Travel policy cost analyses

For more +1 440.248.4111

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