Fuel Tankering

Fuel tankering is a term that defiines the loading of more fuel than required to perform a mission, e.g. a required range with a specified payload over a specified route. Normally, airrplanes load only the fuel required for the mission, including the regulatory fuel reserves – which we discuss in a separate case study. In this context, we discuss whether carrying extra fuel to offset costs differentials is economically advantageous. Without price differential, it is never convenient to carry tanker fuel. At a fixed price differential, the longer the range required, the less convenient fuel tankering is. At some very long ranges tankering is not economic at all. Note, however, that in the case of military operations these considerations do not hold at all: At destination there can be no fuel available. At the time of writing this note, crude oil price is at a multi-year low. This will certainly discourage tankering.

Read full case study here