The High Cost of Labor Contracts and Environmental Regulations cause Planes to Run Low on Fuel

Posted by PITHOCRATES - August 26th, 2012

Week in Review

Here is a lesson in basic economics.  There is a tradeoff between costs and safety in aviation.  You could hire thousands of additional mechanics to give an airplane a complete overhaul after each flight.  And double their pay rate just to make sure they are especially happy workers.  You can have a couple of chase planes follow a passenger airliner on every flight to observe the outside of the aircraft so they can warn the pilot of any problems.  And you can top off every fuel tank on an airplane just to be extra safe.  These things would make flying safer.  But they would also make it very expensive to fly.  So expensive that few people would fly.  Thus reducing the amount of airplanes in the sky.  As well as the number of flight and maintenance crews.  Which illustrates the ultimate cost of generous union contracts.  The more they ask for the more they put themselves out of a job.

But these unions are powerful.  Margins are so thing in aviation that a strike could turn a profitable year into a money losing year.  So to avoid a strike they cut costs where they can.  And the one cost that gives them something to work with is their fuel costs.  Because an airplane only needs enough fuel to fly from point A to point B.  Plus some reserves.  So they are very careful in calculating the fuel requirements to get from point A to point B.  But sometimes weather can enter the picture and add a point C.  And this can sometimes cause a fuel emergency (see Pilots forced to make emergency landings because of fuel shortages by David Millward posted 8/20/2012 on The Telegraph).

Pilots have had to make 28 emergency landings because they were running low on fuel according to figures compiled by the Civil Aviation Authority…

Although the total represents of fuel-related emergency landings is a reduction on 2008-10, when there were 41 such incidents, some pilots have warned the airlines are operating on very narrow margins as they seek to cut operating costs…

One retired pilot told the Exaro website that he and his colleagues were under pressure from airlines because of the industry’s need to keep costs down.

“There is pressure on pilots by airlines to carry minimum fuel because it costs money to carry the extra weight, and that is quite significant over a year…

“The way in which aircraft are being developed in becoming more fuel efficient, there is less need for fuel.

We make jet fuel by refining petroleum oil.  And two things make this an expensive endeavor.  Higher environmental regulations.  And reductions in supply.  Often due to those same environmental regulations.  If they allowed the American oil business to drill, baby, drill, it would be safer to fly.  Because fuel would be less expensive.  And airlines could more easily afford to carry the extra fuel weight.

Airlines don’t have much power over controlling the price of jet fuel.  It is what the market says it is.  They have a little more luck in keeping their capital costs down thanks to the bitter rivalry between Boeing and Airbus.  Who are both eager to sell their airplanes.  Cutting their labor costs is another option they have but it comes with great political costs.  Usually it takes the specter of bankruptcy to get concessions from labor.  So when it comes to cutting their operating costs the least objectionable route to go is to cut fuel costs.  By loading the absolute bare minimum required by regulations.  And for safety.  Airlines want to save money.  But having planes fall out of the sky to save fuel costs will cost more in the long run.  In more ways than one.  (It’s hard to get people to fly on an airline that has a reputation of having their planes fall out of the sky.)

So there are only two practical options to fix this problem of skimping on the fuel load.  Either you drill, baby, drill.  Or you get labor concessions to lower you labor, pension and health care costs.  The very same things that are bankrupting American cities.  So you know the costly union workers are all in favor of drill, baby, drill.  Because the lower the cost of jet fuel the less pressure there is on their pay and benefits.


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