Airlines are constantly seeking ways to reduce operating costs.  The principal target focused on today is fuel costs.  The following chart illustrates how efficient airlines have become over the last decade.  But as impressive as this chart is, one can see the fuel demand curve has spiked up after a steady decline – a sign of weakening progress in gaining fuel efficiency.   The airline industry needs its next step change in technologies to keep the fuel demand curve on a gentle decline.  What technologies are on the horizon that will generate the gains in efficiency that the industry needs?  Two items we have been watching, winglets and electronic taxi, are particularly interesting because they be applied both to current as well as future aircraft.

8-15-2013 10-59-47 AMWinglets

The introduction of the the first winglets on the Boeing 737 created quite a buzz.  Dr. Louis Gratzer, Chief Aerodynamicist at Aviation Partners Boeing (APB) was the creator of this technology.  Its impact was without doubt impressive – it’s rare to see a 737 without winglets in the developed world these days.  APB claims that some airlines have seen fuel burn drop off by as much as 6%. On the 767-300ER airlines can expect to save 600,000 gallons per year – roughly $1.8m.  For an airline, such savings add up quickly. But business jet operators have seen even better numbers.

While winglets have proven themselves, the technology has continued to improve.  Boeing developed its own advanced winglet for MAX.  See a video here.  Boeing claims the new winglet, combined with new technology engines, delivers 13% better fuel burn over the NG.  While most of that is from the engine, the new winglets are an important element of the overall package.  Performance improvements of that magnitude get the attention of airlines. Even in the world of exaggerated claims by OEMs, a 5% improvement in overall operating costs is quite significant.

Airbus has also entered the winglet era with its “sharklets”.  Airbus’ legal challenges with Aviation Partners are headed for arbitration in London next year.  Airlines ordering the single aisle Airbus aircraft are selecting these new winglets for the same reason 737 customers requested them – fuel savings.   Airbus now builds all its A320 family wings with sufficient strength to handle “sharklets”, whether they are ordered or not to enable future retrofit.   Airbus claims a 3.5% improved fuel burn, and has hinted that the numbers may even better than that for some routes.

Aviation Partners has moved ahead again with a radical design, called Split Scimitar.  At first glance it looks similar to the new MAX winglet, but it is quite different.  Aviation Partners claims “would net a cruise performance gain of over 30-40% above the original Blended Winglet configuration“.  The promises of such improvements have brought a number of airlines forward; United is the launch customer and TUI a recent additional to their order book for retrofits. United expects the new Split Scimitar winglet to result in approximately a two percent fuel savings for their existing 737 fleet once retrofit.

e-Taxi
A relatively new area attracting attention is e-Taxi. This attention came more into focus during the recent Paris Air Show, as pioneer WheelTug was joined by Honeywell/SAFRAN in having demonstrated the concept on a real aircraft.  E-Taxi represents potentially significant savings for airlines in a number of ways, some of which are beyond simply fuel and result from quicker turn times and better operational efficiencies.

For single aisle aircraft, the primary focus of e-Taxi efforts, the savings can be surprisingly high.  While fuel savings are an important element, they are not the only source for savings.  A typical aircraft doing five daily turns spends some 15 minutes of taxing per cycle.  E-Taxi allows for much lower fuel burn – four gallons per hour compared to 18 gallons per hour using one main engine or a 78% lower fuel burn during taxi.  But the real benefits are not immediately visible.

Using electronic taxi reduces FOD damage to engines, which typically occurs during taxi, and improves engine maintenance costs.  The real benefit is reducing turn times, because towbars, tugs, and other equipment can be eliminated, and personnel shifted to utilize a second door on the aircraft.  That significant reduction in ground time is money in the bank for an airline, which would typically fly an additional daily flight utilizing the same asset.  A 1/6th reduction in capital cost is significant for a narrow-body fleet.

Look at an airline like United with 330 single aisle aircraft plus 100 MAX on order.  Were United to deploy e-Taxi on its 330 single aisle aircraft, the combination of savings from reduced fuel burns, reduced turn times, lower engine maintenance, and improved asset utilization would be as significant as the 4 to 4.5% reduction in cash operating cost between the 737-8 and today’s 737-800NGW.

The beauty of these enhancements is that they can be retrofit, and even older aircraft can benefit from implementing them.  Given the long delays for many airlines in taking delivery of the next generation of aircraft, deploying winglets and e-Taxi could have a significant impact on lower operating costs for aircraft in fleets today.   In fact, for many airlines these two items could represent an excellent way to hedge against the long lead times because of existing backlogs that stretch to 2020 for some models.

The airline industry is a cyclical business and it has often been said that airlines order when times are good for delivery during the next slump.  A potentially intriguing strategy for an airline might be to not add to the backlog for new aircraft, but instead upgrade its existing fleet with advanced winglets and e-taxi, and wait for the next downturn. At that point, they could then step up and pick up next generation airplanes at lower pricing when some orders inevitably are cancelled, or order new aircraft with much shorter lead times that today’s record backlogs.  The economics are compelling.

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