The potential of turboprops for reducing aviation fuel consumption

Abstract

To assist in aviation systems planning in the context of fuel price uncertainty and environmental regulation, we take a total logistics cost approach and evaluate three representative aircraft (narrow body, regional jet, and turboprop) for operating and passenger preference costs over a range of fuel prices. Homogenous fleets of each vehicle category are compared for operating and passenger costs over a range of fuel prices and route distances and the minimum cost fleet mix is determined. In general, as fuel prices increase, the turboprop offers a lower operating cost per seat over a wider range of distances when compared with both jet aircraft models. The inclusion of passenger costs along with operating costs decreases the number of fuel price and distance pairs where the turboprop exhibits the lower cost. This analysis shows that the aircraft that exhibits the lowest cost is highly sensitive to fuel prices and passenger costs and points to the important balance between saving fuel and serving passengers.

Introduction

The price of aviation fuel experienced large fluctuations from 2004 to 2009; increasing more than threefold from 2004 to 2008 and then quickly falling back to pre-2004 levels. While airlines and manufacturers strive to continually improve their product through innovative technology and procedures, such actions resulted in modest efficiency growth compared with the peaks of fuel fluctuations (Air Transport Association, 2008). Many major airlines announced capacity cuts during the first half of 2008, introducing the possibility that the current arrangement of intercity air transportation is not efficient in consideration of increasing fuel costs. In addition to fuel price fluctuations, cost uncertainties arise due to the emission of greenhouse gases (GHG), the gases that cause climate change. State, federal, and international initiatives are encouraging aviation to reduce GHG emissions through a variety of policy levers such as possible carbon taxes and the inclusion of aviation in the European Union cap-and-trade system. GHG emissions are strongly correlated with fuel burn; as an emissions cap is essentially a resource constraint imposed on the production process and it is well known that such constraints can be represented through shadow prices on the associated resources, fuel price increases will most likely follow (Plaut, 1998).¹ Furthermore, while aviation accounts for 10% of transportation GHG emissions (3% of overall GHG emissions), this share is expected to increase as other transport modes shift away from carbon-based fuels. Such an action will further increase the pressure on the aviation sector to reduce GHG emissions (Environmental Protection Agency, 2008, Yang et al., 2009).

Under a wide range of fuel prices representing volatility and environmental concern, comparative aircraft costs may change. This is particularly the case for aircraft serving short haul markets (under-1000 miles) due to the relative costs of the three main aircraft types serving these markets: turboprops, noted for their low fuel consumption; regional jets, 30–90 seat jets noted for their passenger service qualities; and narrow body jets, 105–150 seat jets noted for their balance of operating costs and passenger service ability. Fig. 1 shows the change in United States airline ownership and leasing levels (summed to represent vehicle presence in the market) of these three different aircraft types gathered from US Department of Transportation data overlaid on the jet fuel purchase price from 1996 to 2009. Recent years have witnessed a shift away from turboprops toward regional jets, while narrow body aircraft presence remained fairly stagnant. While regional jets are less fuel efficient on a per seat-basis, turboprops offer a lower level of passenger service in the form of comfort and perceived safety. As seen in Fig. 1, regional jets continue to be owned or leased in greater numbers as fuel prices increase. One possible explanation is that despite high operating costs, the regional jet enables high frequencies and a high level of service that is valued by passengers. It may be that, since turboprops are more fuel efficient, increasing fuel prices could diminish the importance of passenger preference for a higher level of service and reverse the trend of regional jet adoption.

To understand these trends as well as comparative aircraft costs, this study compares representative aircraft for their operating costs and passenger costs over a range of fuel prices. Operating cost is defined to be the sum of fuel, crew, maintenance, and airport costs. Passenger costs include travel time costs (flying time differences and schedule penalties) and the perceived disutility of flying on turboprops (relative to jets). By combining passenger and operating costs in a single function, this study takes a total logistics cost approach. This allows vehicles with different cost structures and service attributes to be compared. This study will perform these comparisons over wide ranges of distances and fuel prices to identify the combinations of values at which the different aircraft models can serve segment distances with the lowest cost.