Impact of New Generation Aircraft and
Low Cost Carriers
on Airports, Fuelling Supplies and Services
John Pitts
e-Jet
International Limited
1
Key Issues
• Low Cost Carrier fuel characteristics (ME
region)
• Next Generation Aircraft – A380, B7E7
recently launched
• Overall – cost effective fuel provision
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Cost Effectiveness vs.
Gold Plating
Criteria
 Over-Engineering
 Fitness for Purpose
 Cost Effectiveness
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3
FANTASIA
INTERNATIONAL AIRPORT
Fantasia is a small island near
Sunset Isle
G.N.P. from sugar cane,
cultured pearls and tourism
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HOPE FOR THE FUTURE
1998 government built a new
international airport
2 wide-body aircraft leased
inclusive holiday charter flights
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THE HONEYMOON EFFECT
Initially, passenger numbers
increased
Aviation Fuel volumes
encouraging
Foreign investment, new hotel resorts,
infrastructure improvements, health care and
living standards
Regional stability cemented
Good outlook
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THE TRAP SPRINGS
Aviation Fuel facility was
expensive to build, extravagant
and over budget
Construction planning and coordination were poor, many
claims on the construction
contract
Inefficient and costly to operate
System fees were high, making fuel prices higher
than Sunset Isle
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THE VICIOUS CIRCLE
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Sep-99
Jul-99
May-99
Mar-99
Jan-99
Nov-98
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
-40.00
Sep-98
4.8
4.6
4.4
4.2
4.0
3.8
3.6
3.4
Jul-98
Fixed costs had
to be apportioned
against lower
volumes, system
fees became even higher
Calculated Variance (%)
Variance Actual:Projected (%)
Projected (M USG)
Projected
Throughput (M USG)
Airlines started to
tanker
Fuel volumes
became depressed
Month
8
THE KNOCK-ON EFFECT
• Air fares increased
• Fantasia no longer an
inexpensive holiday location
• Passenger numbers decreased
• Fantasia Airlines was forced to
reduce
flight frequencies - one
aircraft
became redundant, but
was still on
lease
• Other airlines reduced frequencies
• Foreign currency spending decreased
• Jobs in the tourist industry were lost
• The economy suffered
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FANTASIA LOST OUT TO SUNSET ISLE
9
More Than One Solution
Case A
8 tanks of total storage capacity 800,000 bbl
Tank farm main supply by a single pipeline
Back up supply by road tanker receipt facility
Case B
4 tanks of total storage capacity 300,000 bbl
Tank farm main supply by a single pipeline only
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% Construction Costs
Tankfarm Cost Breakdown
Design and engineering
Procurement
Materials
Civil works
Tank construction
Piping/mech/struct works
Electrical works
Instrumentation
Buildings
Contractor's Site management
Site mobilisation and demobilisation
Site support
Total
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Case A
Case B
6.0
3.5
2.0
1.9
28.0
16.0
5.0
2.5
8.0
4.0
12.0
7.5
10.0
5.0
10.0
5.5
4.0
3.5
10.0
7.0
3.0
2.5
2.0
1.3
100.0
60.15
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Operational Cost
Considerations over Lifecycle
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Operating Staff
Maintenance Staff
Spare Part Stock
Tank Inspections
Maintenance :
- Mechanical, Electrical,
Instrument, General
External Painting:
Tanks, Pipework
Reliability Risk :
- Mechanical Failure
- Electrical Failure
- Instrument Failure
Case A
8 x 100,000 bbl
tanks
>
>
>
>
>
Case B
4 x 75,000 bbl
tanks
<
<
<
<
<
>
<
>
<
12
Comparison of Lifecycle Costs
to Users
Occupied area (ha)
Capital Costs (US$ million)
Client’s Costs (US$ million)
Total Project Cost (US$ million)
Base Year Operating Costs(US$ million)
UAC (USc/USG)
Total Costs Payable by Users over 25 years
Potential Saving over 25 years (US$)
Percentage Saving
Cost per million USD excess
Ratio
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Case A
Case B
8 x 100,000 4 x 75,000
bbl tanks
bbl tanks
5.5
3.5
80
49.8
10
8.45
90
58.25
5
3
2.0241
1.253
788,375,655
488,055,436
300,320,219
38
9,944,378
9.9
13
Low Cost Carriers - Characteristics
•
•
•
•
•
•
•
e-Jet
2 hour sector maximum typical
B737 predominant
Fuel at one end of sector pair only
20 minute turn around
Quick ITP service required – redundancy
Price driven
Secondary airports 9e.g. Frankfurt Hahn/
dedicated terminals (e.g. Singapore Changi)
14
Middle East Impact
MenaJet
• Middle East's first no-frills airline
• Sharjah International Airport base
• two 162-seat Airbus A320s
• Southwest Airlines model
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Next Generation Aircraft
•
•
•
•
e-Jet
A380
B7E7
A340, B777 derivatives
B737 replacement c 2013 – Y1 (120 – 190
PAX)
16
Airbus A380
e-Jet
Specifications
A380-800
B747-400
Length (m)
73
70.7
Wingspan (m)
79.8
64.4
MTOW (kg)
548,000
396,000
Range (km)
15,100
13,500
Seats
555
416
Fuel capacity
(litre)
330,000
213,000
Service Entry
2006
1989
17
Boeing 7E7
Specifications
7E7-3
7E7-8
7E7-9
Length (m)
56
56
62
Wingspan (m)
50.3 – 51.8
59
59
MTOW (kg)
163,500
205,250
222,400
Range (km)
6,500
15,700
15,400
Seats
300
200
250
Service Entry
2008
2008
2010
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Impact - Other Airports’ Experience
General
LHR
• GBP 100 million
• T3: 4 stands (incl. 2 x 2 MARS) double deck boarding
bridges, taxiway re-alignment
• T5: 5 x A380 stands for 2008 opening, 14 by 2011
• Singapore Airlines, Emirates, Virgin Atlantic Airways,
Qantas, Qatar Airways, Malaysia Airlines
Paris - CDG and Orly
• EUR 100 million – taxiways, terminal, maintenance areas
Major Middle East impact – Dubai, Doha
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Impact - Other Airports’ Experience
Fuel Facilities at LHR
• Limited impact – new fuel farm part of T5
developments – 6 x 10,000 m³ tanks
• 440,000 annual movement limit, currently
420,000
• New large aircraft still small % of
population (c 5 %)
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Conclusions
Low Cost Carriers
• Middle East Region next candidate – operational
impacts not facilities
• Cost effectiveness/fitness for purpose even more
important than ever
New Generation Aircraft
• Middle East airports major players
• Cost effectiveness/fitness for purpose even more
important than ever
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