AirAsia’s low-cost high-efficiency approach to sustainability
Tony Fernandes, Group Chief Executive Officer, AirAsia
When AirAsia was established 15 years ago, we made a pledge to give everyone the opportunity to fly. Since then AirAsia has flown more than 330 million passengers to over 120 destinations in 26 countries and territories.
Our fleet of 177 aircraft flies 221 routes and operates from 20 hubs in Malaysia, Thailand, Indonesia, the Philippines and India. Today we are the largest airline – legacy or otherwise – among the Association of Southeast Asian Nations (ASEAN), recording a turnover of US$3bn in 2016.
Key to this growth has been a focus on keeping costs low. Our lean business model requires every part of the business to be efficient and as simple as possible, while ensuring safety is never compromised. We strive to incorporate best industry practices in all our systems and processes. And we instil among every one of our Allstars a culture of raising productivity with minimum wasted effort or expense. Among other things
- – We keep our aircraft flying as much as possible, while minimising time on the ground. Utilisation of each aircraft is currently more than 13 hours per day on average. And we aim to turn around each aircraft between sectors within 25 minutes.
- – We streamline our operations, making processes as simple as possible. We operate a single type of aircraft, which means training for pilots, cabin crew, engineers and operations personnel can be standardised; our aircraft carry single-class seating; and we use standard operating procedures aligned with industry best practices across the Group as a means of achieving consistency of service and safety.
This has allowed us to provide air services in a way that is responsible, cost-efficient and safe. For instance, we continually revisit our systems and processes – especially in the area of flight operations – to find new and better ways to reduce costs, which are in themselves positive for the environment. Many of these relate to fuel efficiency. Fuel makes up about 40 per cent of our total cost. By minimising our use of fuel we maintain lean operations while making sure that low fares do not translate into high environmental costs. And while we have been conscious of this from day one, we continually look for new and better ways to achieve this goal. The key to our success is small improvements per flight that result in large annual savings.
Our efforts start with the type of fuel itself. We use grade A1 jet fuel, the highest grade of kerosene, which produces less CO2 emission than gasoline. Our next focus is on the aircraft fleet itself. Our young fleet consists of Airbus A320 aircraft for short-haul flights and A330s for long-haul routes, all of which are fully-compliant with emission standards set by the International Civil Aviation Organisation, a global standard-setter for the industry. The average age of the fleet is only six years.
“The key concept to our success is that small savings per flight result in large annual savings”
In 2012, we became the first airline to take delivery of A320s that feature Sharklets, winglets which can lower an aircraft’s fuel burn (and therefore emissions) by lowering air resistance, or drag (see figure 1). With these aircraft, we save up to 4 per cent of fuel or 464kg of CO2 on every flight. AirAsia was also one of the first airlines in the world to fly the Airbus A320neo aircraft with engines by CFM, an engine-maker partly-owned by GE. These state-of-the-art engines further reduce our fuel burn by 16-20 per cent, enabling us to save up to 666 litres of fuel per flight.
Lastly, we look to fuel savings by redesigning flight operations. With our partners GE we have developed innovative ways to lower fuel consumption even further. One–engine taxi procedures apply after landing and before take-off. When taxiing out, the second engine is switched on before the aircraft reaches the runway and is about to take off. Conversely, one engine is switched off after landing. This initiative saves us about 9 litres of fuel per flight and 28kg of CO2 while also reducing engine maintenance costs and noise pollution.
We have spent over US$40 million to develop more efficient flight procedures for approach and landing at all 14 airports that we fly to in Malaysia and four each in Thailand and the Philippines. Instead of relying on ground-based equipment, Performance Based Navigation (PBN) makes use of the aircraft’s own ability to navigate the shortest possible flight path after take-off or for landing (see figure 2). Through PBN we can save about 182 litres of fuel and 575kg of CO2 per flight.
Reducing the weight of our aircraft also reduces fuel burn. One initiative to minimise load is to reduce the amount of paper carried onboard – including flight documents such as flight plans, voyage reports, aircraft manuals and the documentation required by our pilots – which together weigh about 23kg. In 2014, we have replaced them with two-kilogramme tablets, known as electronic flight bags. This paperless initiative currently saves two litres of fuel and 6kg of carbon on each flight. In 2017 we will be going digital across many other aspects of flight operations, including:
- Electronic flight bag operational specifications approval
- Implementation of e-aeronautical charts
- Conversion of PDF company flight operations manuals to XML format
- Automated management reports
- Digitalisation of all flight operations administration forms
- Introduction of individual flight crew safety and fuel efficiency app
- Aircraft and cabin virtual reality training
Table 1 illustrates further fuel-saving/carbon-reducing initiatives and their impact.
In 2016 we reduced CO2 emissions by more than 30,000 tonnes or the equivalent of nearly 149,000 trees. This represents about 5 of AirAsia’s annual emissions. We expect these savings to continue growing each year as we deepen and expand our efforts through our newly-established business sustainability and environmental teams. In addition to energy consumption and fuel management, future programmes will also consider other important issues such as environmental policy and management systems, operational eco-efficiency and greenhouse gas emissions.
About the Author
Tony Fernandes is the Group CEO of AirAsia. Before going into aviation, he was Vice President of Warner Music South East Asia. Tony and several partners founded Tune Air Sdn Bhd in 2001 with a vision to democratise air travel by offering low fares and high-quality services. They bought the then loss-making AirAsia for a token MYR1 (about 23 US cents) and agreed to take on the airline’s MYR40 million (US$9 million) debt. AirAsia repaid that debt in less than two years, in spite of the extremely challenging post-September 11 2001 environment, growing from two Boeing 737-300 aircraft, one destination and a staff of 250 into Asia’s largest low-cost carrier by passengers in just over a decade.