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AMR: Making Every Gallon Count

American Airline's all-out fuel-efficiency drive may help put it back in the black

When it comes to pinching pennies, few full-fare airlines can match American. During his long tenure as American Airlines' chief executive, Robert Crandall loved to boast that his decision to remove a single olive from passengers' dinner salads saved $40,000 a year.

Today, with oil prices soaring north of $70 a barrel, American's cost-cutting culture is more critical than ever. Thanks in part to a flurry of initiatives that the company believes will slash fuel consumption by roughly 3% this year, vs. 2004 -- a seemingly trivial amount that nonetheless represents more than $220 million in annual savings at current prices -- the Fort Worth-based carrier is likely to emerge as one of the few airlines to turn a profit. Energy-saving measures run the gamut from the surprisingly simple, like removing unused service galleys to reduce the weight of the plane, to the supremely sophisticated, such as using algorithms to help pilots use less fuel while in the air. "American has been at the forefront of getting costs down through innovation and collaboration with its employees," says Michael Boyd, an airline consultant in Evergreen, Colo.