A new and responsible business model shows that flying can be guilt-free.
Azran Osman-Rani would like you to think that the lowest fares, in brand new planes with comfortable seats, on a time schedule comparable to any other mainstream airline is an attractive option to fly. Over two million passengers who’ve flown in the past year think he’s right. A passenger increase of 86 percent has made AirAsia X the world’s fastest growing airline. Ticket prices which are 30-50 percent cheaper than other airlines, a fun and interactive brand people can relate to and the convenience of buying tickets online have also helped.
It all started 10 years ago when the Malaysian founder of AirAsia, Tony Fernandes, watched a reality show featuring European low cost airline Easyjet. He thought it would be a great idea to roll out in Asia. The region still suffered from expensive flights and a lack of travel infrastructure across rail and road systems. At that time Fernandes estimated that only 6 percent of Malaysians had ever flown in a plane. He recognized that low cost air travel in Asia could be the catalyst for connecting people better. AirAsia was launched in 2001 with the tagline “Now everyone can fly” with AirAsia X following in 2007, focusing on low cost, longhaul flights in larger planes such as the Airbus A330-300.
Before AirAsia X, the established players, such as Southwest, US Airways, RyanAir and Easyjet used small planes doing shorthaul regional flights, nothing more than four hours in duration. Longhaul had not been done successfully before and Fernandes thought there must be a way of capturing the growth he saw in shorthaul and translating it into a longhaul model. Shareholders were not convinced, however, and thought it was a risky idea, straying into territory that bigger and more successful and established airlines had steered clear of. Fernandes ploughed ahead, convinced of his intuition, and AirAsia X was formed as a separate company from Air Asia, with private equity money and with Osman-Rani instated as its first CEO. And what of longhaul flights resulting in more carbon emissions? Isn’t air travel increasingly being seen as a big contributor to our growing problem of burning more fossil fuels?
Osman-Rani has his own view on this. “We don’t agree with what other airlines are now doing to address this problem, which is offering carbon credits to offset emissions. This is basically shifting the guilt of air travel onto the passenger. What we focus on rather, is the fact that emissions resulting from burning jet fuel is a direct cost to us, the airline. We pay for these emissions as a direct consequence of buying the fuel. This is unlike other industries where pollution emissions are an externality of their manufacturing process. They pollute but do not bear the direct costs themselves of this pollution. Because we are committed to becoming the world’s lowest unit cost airline we keep figuring out a way to also become the world’s most fuel efficient airline.
The airline burns around 2.2 litres per seat per hundred kilometres as opposed to other airlines which burn around 4 litres. This also equates to 93 miles per gallon per passenger that we fly, a significantly better performance than most cars. Osman-Rani has achieved cost savings by placing it firmly on the agenda of the organization. While other airlines talk of financial instruments such as fuel hedgings as part of their savings plan, this doesn’t actually bring down the cost of fuel. AirAsia X focuses rather on the fact that the volume of fuel needs to be brought down, irrespective of its price.
“There’s no magic bullet in getting a 30-40 percent fuel burning saving in the airlines industry. We have various ways of getting the optimal saving possible though. For example we use new planes with the latest fuel efficient technology, fewer first and business class seats and more economy seats, resulting in a lower fuel to passenger ratio on take-off due to increased numbers onboard. Even when compared to a standard Airbus with standard seat configuration we are still burning lower than the industry.”
An obsession with weight has also seen load shedding on AirAsia X. Footrests on economy class seats have been removed. This might seem trivial, but 365 metal footrests can add up to quite a weight. Osman-Rani has not yet encountered any passenger who refuses to fly AirAsia X because the little footrest is missing.
“The quantity of water for lavatories is based on how many passengers are on a flight, or if it’s a night flight realizing that many people will be asleep. Many other airline groundcrews are instructed to simply ‘fill her up’. We’re very precise on measuring how much water is needed and if we can reduce a flight by 200 kilograms, that’s fuel saved.”
Pilots are trained in efficient route planning, managing and nursing the engines and immersing themselves in the AirAsia X culture which promotes sustainability. Because the company is not unionized, pilots feel part of this culture and take ownership of the process.
“Many airlines have pilots who have a ‘work to rule’ attitude, based on legislation negotiated by their unions. In these environments many pilots don’t see any reason to implement fuel-saving measures,” explains Osman-Rani.
No airline works in isolation from the airport management companies with whom they need to negotiate parking bays and other logistics. Busy airports too, such as Heathrow, can scupper any fuel saving achieved from careful planning by making planes circle for half and hour before landing due to congestion. Avoiding peak hours at airports helps avoid this and keeps costs down. Osman-Rani would also like to see more ground power units at docking stations at airports. These diesel-powered generators plug into the plane while still parked and keep the plane powered for lighting and other mechanical operations, avoiding using the plane engines to generate power and using less of the expensive and higher CO2 emitting fuel.
With fuel making up 90 percent of the environmental impact of air travel, it’s obvious that this is where the focus should be when it comes to saving.
With other industries able to supplement their energy needs with solar, wind and hydro, air travel is stuck with fuel for the foreseeable future. Biofuel blended with jet fuel or organically produced jet fuel from algae or palm oil is still at least five years away before it becomes commercially available.
“Of course the problem with biofuel is that it starts eating into arable land and takes away from food production. Food prices are extremely susceptible to agricultural resource allocation, so while we want to bring down the cost of fuel, we need to be careful we don’t inadvertently increase the price of food.”
But surely many flights have become unnecessary in this day of free Skype calls, video conferencing and lightening fast communication, connecting people around the globe? Osman-Rani cannot imagine a world without air travel. Most importantly, he sites tourism as critical for many economies. Understanding different people and cultures through physical contact is as important as the sustainability debate. “Look at conflict hotspots around the world, they all suffer from people who have limited interaction with the rest of the world. Put another way, the offset of air travel is economic stimulation and better human relations.”
With rising fuel prices, volcanic ash, viruses spreading through air travel, recession, tsunamis and the odd earthquake thrown in, times are certainly challenging for air travel. “Air travel is not immune to the trend of responsible business we are seeing grow rapidly around the world. We strongly believe that there should be the market discipline to say that if you’re not an efficient air carrier you shouldn’t be artificially propped up, as we’ve seen with many national carriers over the past few years.”