Airlines Positioned For Big Gains In Efficiency

SCOTT MAYEROWITZ

Planes are being built out of the same lightweight materials used for Formula 1 race cars. Their engines are being redesigned to squeeze more thrust out of every gallon of fuel. And governments are developing air-traffic systems that will allow airlines to fly shorter routes.

Those and other advances have positioned airlines for the biggest gains in fuel efficiency since the dawn of the jet age in 1958. For airlines, more efficient jets will reduce their biggest expense. For passengers, it means fares won't jump around as much with the price of oil.

"We're seeing 25 years of improvements compressed into 10 years," says Hans Weber, president of TECOP International, an aviation consulting firm.

Airlines' urgency to reduce fuel use is being driven by two trends: soaring oil prices and tougher environmental regulations.

Pressured by airline executives for improvements, manufacturers have pushed the frontiers of technology by building lighter planes and borrowing essential engine-design advances from the auto industry, like automatic transmissions.

Airplane manufacturers have already reduced fuel consumption twice as much as car and train manufacturers have. In 1980, it took an average of 46 gallons of fuel to fly a passenger 1,000 miles. Today, it takes 22, according to an AP analysis of Department of Transportation data. Experts say the coming improvements could bring that number below 18 within a decade.

That can't come soon enough for airlines struggling with the rising price of oil.

U.S. airlines lost a combined $1 billion in the first three months of this year, in large part because of a 24 percent spike in fuel costs. A decade ago, fuel accounted for 15 percent of an airline's operating budget. Today, it's 35 percent.

U.S. carriers with European routes face hundreds of millions of dollars a year of additional costs pegged to their fuel consumption starting next year, when the European Union begins limiting how much carbon dioxide airlines are allowed to emit before paying a penalty. The restrictions are expected to cost airlines worldwide $3.3 billion a year. The U.S. airlines are fighting the law in European courts.