Author Archives: AccountMate

From Alaska to Allegiant–Airlines Differ in Efficiency

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OCTOBER 4, 2013

airline fuel efficiencyAirlines are always obsessing over fuel costs. It’s a crucial aspect of their business, after all, and accounts for 1/3 of their operating expenses. So you might think that all the major airlines do roughly the same things to minimize their fuel use. But that doesn’t seem to be true. The Washington Post (Sept. 21, 2013) reports that there’s actually a surprising amount of variation in how airlines burn fuel. It ranked the 15 biggest U.S. airlines by fuel efficiency and found very large disparities, as seen in the attached graph.

The least efficient airline, Allegiant Air — a low-cost carrier that targets smaller airports — used 26% more fuel than the most efficient, Alaska Airlines, to achieve a similar level of transport.

So why is there such a huge disparity? Here are a few possibilities:

– Differences in technology: About 1/3 of the variation likely comes from the fact that different airlines use different technology — they don’t all deploy the most advanced, efficient aircraft. Allegiant, for instance, has a fleet of McDonnell Douglas aircraft that dates back to the 1970s. Alaska Airlines, by contrast, uses newer Boeing planes that have technologies like “winglets” to reduce fuel burn.

– Differences in operations: Technology can’t explain all the disparity in fuel efficiency. Some airlines, like Southwest, manage to operate older aircraft quite efficiently. Other airlines, like Virgin, have newer aircraft but are relatively inefficient.

– High oil prices don’t necessarily drive fuel savings. The most efficient airlines aren’t necessarily the most profitable. Allegiant was the least-efficient airline in 2010 but also the most profitable. That’s because it tends to serve airports that other airlines neglect, giving it more leverage to raise prices on routes.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

When Technology Fails

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OCTOBER 1, 2013

New Fairbanks Airport barricadeWe are certainly a technology driven society, with our ATMs and EFTs, on-line newspapers and e-books, robotic surgery and robotic butchering, and optical scanners. So what happens when something as simple as a phone app for navigation fails?

If you are headed for the Fairbanks, Alaska, Airport, just don’t ask your iPhone for help. The Detroit News (Sept. 27, 2013) reports that Apple has disabled driving directions to the Fairbanks International Airport after a glitch in its maps app guided drivers to the edge of a runway instead of a terminal.  Two times, drivers continued on and cut across an active runway to reach the terminal. Now, when someone puts in the airport as their final destination, a message pops up and says, “Directions not available, direction cannot be found between these locations.”

Previous directions on newer iPhones and iPads guided drivers to the edge of the tarmac instead of the correct route to the terminal. In incidents Sept. 6 and Sept. 20, drivers went through a gate, past warning lights and signs, and then across an active runway, to reach the terminal. The first mishap involved an out-of-state visitor trying to return a rental car before a flight, and the second was an Alaska resident trying to get to the airport.

The airport has since barricaded that entrance to the taxiway. A sign posted there gives a phone number for people to call to get the correct directions to the airport. After the first incident, airport authorities immediately contacted Apple requesting a fix.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

Robots vs. Anesthesiologists

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SEPTEMBER 27, 2013

J&J's Sedasys system

Anesthesiologists, who are among the highest-paid physicians, have long fought people in health care who target their specialty to curb costs.Now the doctors are confronting a different kind of foe, writesThe Wall Street Journal (Sept. 26, 2013): machines.

A new system called Sedasys, made by Johnson & Johnson, automates the sedation of many patients undergoing colon-cancer screenings called colonoscopies. That could take anesthesiologists out of the room, eliminating a big source of income for the doctors. More than $1 billion is spent each year sedating patients undergoing otherwise painful colonoscopies.  Sedasys “is a great way to improve care and reduce costs,” says J&J’s CEO.

Anesthesiologist’s involvement typically adds $600 to $2,000 to the colon-cancer screening procedure’s cost, By contrast, Sedasys would cost about $150 a procedure.

As J&J markets Sedasys, many anesthesiologists are sounding the alarm. They say the machine could endanger some patients because it uses a powerful drug known as propofol that could be used improperly. They also worry that if the anesthesiologist isn’t in the room, he might not be able to get to an emergency fast enough to prevent harm.

But during testing, none of the 1,700 patients sedated by Sedasys required rescuing. This past May, the FDA approved Sedasys for use on healthy patients 18 years of age and older who require mild or moderate levels of sedation during the colon-cancer screenings.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.