Developing the concept of extra fuel planning as a solution to overcome the fuel cost crisis for low-cost airlines (LCCs) in Thailand.

Abstract

          Volatility in global fuel prices has directly impacted the cost structure of the aviation industry, particularly low-cost carriers (LCCs) in Thailand, where fuel expenses account for approximately 30–40% of total operating costs. Ongoing geopolitical conflicts in the Middle East have significantly intensified these impacts on both global and Thai aviation sectors. According to the IATA Jet Fuel Price Monitor, fuel prices have surged by more than 100%, especially in the Asia & Oceania region, due to its high dependence on energy imports and its vulnerability to price fluctuations.

This study aims to propose and develop an effective concept of Extra Fuel Planning as a strategic approach to manage fuel price uncertainty and reduce hidden operational costs affecting airline profitability. Fuel planning is emphasized as a key cost management tool for LCCs, focusing on factors contributing to excess fuel consumption (fuel burn), including both internal and external variables. Efficient extra fuel planning enhances safety by ensuring adequate reserves for emergencies and operational uncertainties. Importantly, carrying extra fuel does not imply overloading, but requires careful optimization to balance safety, cost reduction, and profit maximization through fuel price differentials. Additionally, it helps mitigate the risk of flight diversions to alternate airports, thereby reducing indirect costs and supporting the maintenance of excellent service standards in an increasingly competitive airline industry.