2008 was a bad year for airlines. Eight US airlines folded in 2008, and with a rocky road ahead for 2009, I wanted to drill down and examine what this past year really meant for airlines in dollars and cents. We know the big picture: oil spiked in July to $147 a barrel and threatened to put a death grip on airlines facing the worst industry crisis since 9/11.
But what did $147 a barrel oil mean to the hourly operating cost of an aircraft?
The mainstays of long-haul travel on US airlines, the Boeing 777-200 and Airbus A330-200/300 tell the story of 2008.
US long haul carriers American, Continental, Delta, and United fly the 777-200/200ER/200LR and US Airways and Northwest fly the A330-200/300. According to Flight’s ACAS database, 129 777-200/200ER/200LR and 41 A330-200/300 aircraft are flying for US airlines.
The report was created using US Department of Transportation Form 41 T100 and DB1B data generously compiled by Airinsight.com a service of IAG.
The data illustrates a steep climb in hourly operating cost for the two aircraft types between the 3rd quarter of 2007 and the 3rd quarter of 2008 when oil hit the $147 peak. The fuel price column accounts for the average price at the pump each airline paid during that quarter. Each airline paid roughly average listed price throughout the quarter, with the notable exception being Northwest which paid almost $4.75 per gallon during the 3Q08, $.61 above the nearest airline during that same period.
This jump is largely illustrative of just how difficult it was for airlines to plan for such a volatile fuel environment and how significantly it impacted hourly operating cost.
The purpose of this chart is to demonstrate the impact of the price of oil on hourly operating cost, not create a false equivalency about which aircraft is “cheaper” to operate. I selected the A330 and 777 because of their similar global entry into service date nineteen months apart in 1994 and 1995.
The age of the aircraft play a role here and the 777-200 fleet entered service in the US with United Airlines in 1995 and the A330-300 in 2000 with US Airways. Also, the 777 and A330 are not necessarily market competitors, but they do illustrate the pain inflicted by the high price of oil.
This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.
This post originally appeared at Flightglobal.com from 2007 to 2012.