““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
3 ways to save big on fuel
Besides significantly reducing wear and tear on an airplane, flying more efficiently cuts fuel consumption. That's no small benefit these days. But flying "smart" is just one way to combat pain at the pump. You can also maximize fuel discounts, maybe even put in your own fuel farm and aerodynamically "tune" your airplane to coax extra speed, range and efficiency from it without burning more gas. Here's a look at three key strategies:
1. Fly Smarter
Over the last year, most corporate flight departments have pulled back the power and used other common-sense techniques to save anywhere from 2 to 6 percent on fuel. For example, they have opted for slightly slower cruising speeds; they are flying higher (in general, the higher you fly, the less fuel you burn); they're changing en-route altitudes and/or routing to maximize the assistance of tailwinds or minimize headwinds; they're employing idle-power descents; taxiing on one engine; and using ground power carts to cool, heat and provide starting power rather than run jet-A-sucking auxiliary power units. When possible, they are also selecting the longest runway to minimize required takeoff thrust or the degree to which thrust reversers are needed on landing.
Flying at off-peak hours can also save fuel because it increases the likelihood that air traffic control will give your pilots more direct routing-even into the busiest airports. Traveling during less congested times means less waiting on ramps and taxiways as well. I've done a fair amount of night flying and can testify that the air is smoother and the controllers are friendlier then. After 9 p.m., controllers are highly unlikely to send you to Outer Siberia to fly circles for 20 minutes while they sort out the mess on their radar screens. Major air-freight hubs-such as Memphis and Louisville-are exceptions to this rule, but it generally works everywhere else.
2. Rethink How You Buy Fuel
You can also cut costs by selecting less fashionable airports, either as a destination or an interim stop, for fuel purchases. (My hands-down choice in the Chicago area, for example, is the regional airport in Gary, Ind., which not only has cheap fuel but great service and a long runway.)
Fuel card and discount programs-which encourage FBO-chain or fuel-brand loyalty-are a no-brainer way to save, with discounts that escalate with the volume you buy. Avfuel, BP, Chevron, ExxonMobil and Phillips are among the fuel brands touting discounts and virtually all chain FBOs-even the really small ones-offer something.
Some airports will let large tenants install their own fuel tanks; others won't, either because of fuel flow fees or terms of FBO leases. Sometimes you can get around this by buying your own fuel truck and storing the fuel in it. Generally, buying fuel directly from a wholesaler or jobber can save 15 to 25 percent. However, it really makes sense only if your airplane is large enough so you can "tanker" fuel out and back. Carrying the extra weight generally doesn't supplant the economic advantage of the lower price and can easily compensate for FBO handling fees charged to aircraft that don't purchase minimum fuel. However, most operators who tanker will still purchase a minimum amount of "courtesy fuel" at their destinations.
Hedging is another fuel strategy. Some airlines have saved a bundle by "hedging" their fuel, which basically involves taking profits from oil futures contracts and applying them to lower the cost of current operations. However, this requires time and energy; ties up capital in forward contracts; and can be very costly when the value of those contracts declines.
3. Modify Your Aircraft
Changes made to your airplane can also cut fuel burns. A dirty airplane is more than unsightly; it creates aerodynamic drag. Most corporate airplanes are kept clean and polished; make sure your aircraft stays that way.
Over the years, various companies have developed modestly priced (versus the purchase price of the airplane) aftermarket aerodynamic modifications such a vortex generators, vortillons, strakes, gap seals and winglets (see sidebar on this page) that can make even really old models more efficient. These packages can often pay for themselves within a year thanks to fuel savings.
Raisbeck Engineering has been developing these kinds of modifications for King Airs and Learjets since the 1970s. For years, the Seattle-based company has marketed these products on the promise of increased speed, but they also save fuel. "Historically, we have not really pushed fuel savings," said Raisbeck general manager Sam Jantzen. "But when you take the drag out of an airplane, you get more speed and/or fuel savings."
Raisbeck said its Epic Gold modification package for the new Hawker Beechcraft King Air B200GT will increase cruise speed to 318 knots, about a 15-knot boost; or it allows cruise at 303 knots, the published maximum before the mods, and achieves a fuel-burn savings of 10 percent. On Raisbeck's Learjet 30 series ZR Lite package, some customers are reporting fuel savings of 12 to 14 percent. Buyers of the package include Wal-Mart, which installed ZR Lite on all 14 of its Learjet 31s.
The company reports a brisk increase in sales as fuel prices have accelerated over the last several years. Sales on the Learjet mods are up 25 percent, with prices starting at $85,500 (excluding installation). Installing ZR Lite on a Learjet 35 takes about eight days. Raisbeck has 10 authorized installation centers for its Learjet ZR Lite, including such well-known maintenance centers as Banyan, Bombardier Tucson, Duncan, Stevens and West Star in the U.S.
Winglets-those little tail-shaped structures on the wingtips-not only cut fuel burn, they also improve high-altitude handling characteristics on many airplanes. Aviation Partners, also based in Seattle, pioneered the retrofit of Blended Winglets on popular models of business jets, including many Boeings, Dassault Falcon Jet 2000s, Gulfstream IIs and Hawker 800s. The company estimates its winglets have been installed on 2,700 jets, and said it has a backlog of more than 1,000 orders. It also estimates its winglets have saved operators well over 1.14 billion gallons of jet fuel.
Winglets mitigate drag and therefore boost range by 5 to 7 percent. On Hawkers, the number is 7.3 percent at long-range cruise speed. That translates into 180 nautical miles of increased range, or 25 minutes' additional flying time or reserve fuel. Winglets also increase cruise speed by 15 knots. A typical Boeing 767 in airline service will save 500,000 gallons per year when equipped with winglets. Lower fuel burns mean a smaller carbon footprint as well-every pound of jet-A burned creates 3.15 pounds of carbon dioxide.
The economic case for installing winglets on small and midsize business jets isn't quite as compelling as it is with larger models. On a Hawker, the price with installation is $451,000 and the airplane must be out of service for three weeks. But the winglets will provide immediate performance improvements and increase aircraft resale value. One more thing: They look cool.
Additions To Your Av-Lexicon
Here are definitions of some terms (all mentioned in the accompanying article) that
you may encounter if you consider modifying your aircraft to save fuel:
• Gap seal: device that creates a barrier between the high-pressure air on the bottom of the wing and the low-pressure air on the top of the wing, thus improving airflow.
• Strake: a device for controlling airflow over an aircraft.
• Vortex generator: an aerodynamic surface, consisting of a small vane that creates a vortex (a spinning, often turbulent, flow of air).
• Vortillon: short for vortex-generating pylon.
• Winglet: a device usually employed to improve aircraft efficiency; intended aerodynamic effect is to modify the airplane's wake in some beneficial manner; can improve aircraft handling characteristics as well; also has aesthetic appeal.