Business Case
Shrinking margins & rising fuel costs are putting increased pressures on Airlines’ profitability, worldwide.
The headline issue in recent times has been the relentless rise in the price of fuel. This more than eroded the strong revenue performance of many Companies. This steep rise in the price of fuel was not matched by the increase in fuel surcharges either. As prices rise, some thinning of demand can also be expected. Unless fuel prices decline substantially a return to satisfactory profitability will depend principally on the extent to which increased fuel costs can be recovered by higher fares and fuel surcharges.But Fares are determined by the market conditions and tight control of Operational costs is the only alternative for Airlines amidst shrinking demand, compounding the issues around declining consumer demands was the concurrent rise in oil prices, which typically constitutes 30% of an airline's operating cost and is the major expense for commercial airline companies.
Fuel management is a key driver for efficiency among airlines.
Fuel Procurement Plus is a solution offering from Oracle Consulting, which specifically helps Airlines –
- Standardize the Fuel Procurement process
- Automates and streamlines processes tied to fuel procurement, inventory replenishment, transaction processing and financial reconciliation, thus enabling Airlines to reduce fuel-related operating costs
Key Features – facilitates Airlines to do the following:
1. Streamline and Automate Fuel procurement Processes-
- Electronic Transmission of delivery dockets from Suppliers
- Eliminates the need to collect, deliver and enter paper dockets in the system
- Significantly reduces elapsed time between fuel injection and docket processing
- Pay on receipt
- Fuel invoices from the supplier are no longer required
- Now generated by the airline on behalf on the supplier once the validation takes place
- Fuel Volumetric Correction
- Enables transacting fuel inventory in either ambient temperature or 15° Celsius volumes,
- Online conversion of transactions and on hand quantities from ambient to the equivalent 15° Celsius volume and vice versa,Online query of on hand fuel quantities at 15° Celsius, Multiple volume units of measure i.e. US Gallons or Litres
- Month End Accruals
- Automates the calculation of an accrual value for sectors flown, where no delivery docket has been received.
2. Validate Fuel Injections and Manage Exceptions
- The Fuel validation program Reconciles fuel delivery dockets with
- Sectors
- Corporate Tables (Aircraft Type, Airport Codes etc.)
3. Enforce Contract Compliance and Establish Industry Specific Pricing
- The Solution enables you to manage long term contracts with suppliers
- Enables price calculation, support for weighted averages prices, multi currency, fuel benchmark indicators, suppliers surcharges,airports fees, governments taxes and levies
- Automatic generation of Purchase Orders
- Enables pricing fuel dockets when new parcels are introduced retrospectively and when prices are updated retrospectively on existing parcels.
4. Manage Fuel Inventory
- Receipts are captured at the Airline Managed Fuel stock location and then interfaced to Oracle Inventory System
- As required by API(American Petroleum Industry) allows for reporting stock levels and perform transactions of Jet fuel at both Ambient volumes and at 15 degrees or any other temperature as agreed.
Benefits
- Process Streamlining and Automation
- Focus on Value Added Activities
- Increased Price Accuracy and Reduced Reconciliation Effort
- Improved Decision Support
- Flexible, Scalable and Cost Effective System
- Reduction in Operational costs
- Seamless Integrated Solution
Contacts
Please contact Gururaj T S for more details on the Solution.
