United Targets to Save More Fuel - Analyst Blog
Apart from implementing various strategic initiatives to boost
the profitability level and render greater customer satisfaction,
United Continental Holdings Inc.
) is taking measures to do its bit in making the world a greener
one. The company targets to save 85 million gallons of fuel in
2013. This is equivalent to almost 828,750 metric tons of carbon
dioxide or nearly $275 million in terms of fuel expense at
Fuel being the biggest expense on part of the airline, United has adopted several steps to ensure a fuel-efficient operating base. Since 1994, the company has enhanced its fuel efficiency by 32% via better flight planning, single engine taxiing and light-weight in-flight products. The company also utilizes ground power, when aircraft are parked, instead of the onboard secondary power unit. This helps in saving fuel and reducing carbon emissions.
United is reconfiguring its fleet structure by investing in advanced, fuel-friendly jets replacing the old and fuel-expensive ones. Last year, the company placed an order to The Boeing Company ( BA ) for 150 brand-new 737 narrow-body airplanes designed with superior CFM engines.
Further, United introduced new Split Scimitar winglet that curtail the pressure on the planes and minimizes fuel usage and carbon emissions by up to 5%. These technologically upgraded wingtips are fitted to the 737 Next-Gen aircraft, leading to almost 25% of less fuel consumption per seat compared with the 737-500 jets. The company also has over 300 airplanes, including the complete Boeing 737 fleet and most of its 757 and 767 aircraft, retrofitted with the winglets.
This fuel saving measure is part of the company's Eco-Skies program that is directed to have positive effects on the environment - while aircraft are in the air as well as on the ground. Under this program, United become the first U.S. passenger airline to operate flights on biofuel. The company has also entered into deals to purchase over 50 million gallons of sustainable biofuels in the coming months.
Additionally, the company collaborated with Boeing, UOP - a subsidiary of Honeywell International Inc. ( HON ), the Chicago Department of Aviation and the Clean Energy Trust to launch the Midwest Aviation Sustainable Biofuels Initiative (MASBI) that is engaged with the commercialization of affordable aviation biofuels.
United Continental - that operates other industry players such as Delta Airlines ( DAL )- currently retains a Zacks Rank #3 (Hold).
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