To Cut Fuel Costs, American Switches To 737s

American Airlines is parking its MD-80 jets in the Texas desert and buying new Boeing 737s. The move is an attempt to cut energy costs amid high energy prices.

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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

And first up this hour, energy and the economy, how companies and individuals are making changes to cut back on consumption. Crude oil prices shot up sharply today. They rose more than $5 due to worries about tensions with Russia. That puts oil back above $120 a barrel. The short-term answer to high energy cost is simple: Use less, drive less, and that's happening.

Over the long term, it takes planning and investment to reduce energy cost. And there are signs that months and months of record prices have inspired permanent changes at all kinds of businesses, from corporate giants to one-man bands.

Let's start our coverage with NPR's Wade Goodwyn in Dallas, home of American Airlines. [POST-BROADCAST CORRECTION: American Airlines is headquartered in Fort Worth.]

WADE GOODWYN: Over the last two months, many Americans have been setting personal bests at the gas pump, watching in wonder and horror as the digits soar like a Chinese gymnast. But as bad as it's gotten, at least your bill didn't come to $61.2 billion. That's what the airline industry will put on its credit card for jet fuel for 2008.

American Airlines is one of the country's legacy airlines with a proud history and lots of outdated MD-80 jets. Like a late '90 Chevy Suburban, these planes still run fine. But if you can imagine an endless stream of $100 bills flowing out of the back of the Super 80's jet engines, that's American Airlines' profits blowing away in the wind. So the company is parking its ravenous workhorses in the Texas desert and buying beautiful new Boeing 737s.

Chuck Schuber(ph) is in charge of corporate planning, and he'll gladly point out the plane's most important attribute.

Mr. CHUCK SCHUBER (Corporate Planning, American Airlines): About 25 percent more efficient than the Super 80 from a fuel perspective, which obviously provides great financial benefits to the company, as well it's a much better product for our customers being a new aircraft with some added amenities that the Super 80 doesn't have.

GOODWYN: Passengers will enjoy the 737's state-of-the-art in-flight entertainment system while airline executives enjoy millions in fuel savings.

Unidentified Woman #1: You are all set to go. Let me just take your ticket.

GOODWYN: Guess what other Texas airline flies fuel-efficient 737s? That would be the airline that has turned a profit for 69 consecutive quarters. But since this is about the Texas carrier with the silver jets, it's the airline that shall remain nameless.

Wade Goodwyn, NPR News, Dallas.

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Rising Oil Prices Goad Industries To Conserve

An MD-80 aircraft sits on the Dallas/Fort Worth International Airport. i i

An MD-80 aircraft sits on the tarmac at the Dallas/Fort Worth International Airport. American Airlines is retiring this fleet. Rick Gershon/Getty Images hide caption

itoggle caption Rick Gershon/Getty Images
An MD-80 aircraft sits on the Dallas/Fort Worth International Airport.

An MD-80 aircraft sits on the tarmac at the Dallas/Fort Worth International Airport. American Airlines is retiring this fleet.

Rick Gershon/Getty Images

After a brief respite, oil prices are moving higher again. The price per barrel rose more than $5 Thursday, closing at just over $121.

The months and months of high prices have provided more than enough incentive for American businesses — from airlines to cruise lines to newspapers — to invest in long-term energy saving measures.

Airlines Replace Planes

The airline industry will spend more than $61 billion on fuel this year. With a bill like that, there's little wonder that carriers are taking steps to cut energy costs.

American Airlines, the world's largest, is changing the planes it flies.

It's quickly retiring the workhorse of its fleet: the MD-80. Many MD-80s are nearly 20 years old, and they burn lots of fuel. American is replacing them with new Boeing 737s, which are about 25 percent more fuel efficient, according to the airline.

Cruise Lines Adjust Times

Cruise lines are dipping their oars in those waters as well.

In Miami, Royal Caribbean says it's turning off air conditioners, changing light bulbs and taking other commonsense steps to reduce its $772 million fuel bill.

It's also adjusting arrival and departure times to allow ships to reduce sailing speeds and conserve. These are some steps that are unique to the cruise business.

Royal Caribbean is using a new kind of paint that keeps ship hulls clean.

"Marine growth is what really creates ... resistance in the water," says John Krousouloudis of Royal's Celebrity Cruise Lines. "And that drives up [our] fuel bill."

Newspapers Consolidate Deliveries

On a much smaller scale, independent businesses are making changes to cut their fuel bills.

In Nashville, Tenn., newspaper deliveryman Frank Saracino says he's doing some of his routes on Sundays and evenings to avoid wasting gas in traffic.

He's also consolidating deliveries, and sharing work with his competitors.

"I will work with another driver," Saracino says. "He'll run some of my stuff and I will run some of his stuff."

And he's not the only one. Nationwide, more than 40 percent of papers now collaborate with a competitor on delivery.

Energy-Efficient Appliances Sell Fast

With all of the focus on reducing energy use, energy-efficient appliances are selling fast at stores around the country.

At Appliance Distributors Unlimited just outside Washington, D.C., showroom manager Ed Janeski says his catalogs are filled with products featuring the little blue "energy star" sticker.

And his store is getting in on the act itself. It has installed programmable thermostats to cut off the air conditioning or heat during off hours.

Reported by Wade Goodwyn, Greg Allen, Audie Cornish and Libby Lewis.

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Correction Aug. 25, 2008

The introduction to this story describes Dallas as the "home of American Airlines." American Airlines is headquartered in Fort Worth.

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