According to Ground Support Worldwide, airlines are pushing their fares in the vertical, upwards direction due to “oil’s latest surge.”

The article mentions that crude futures have crossed the “once unthinkable” $100/barrel mark (unthinkable by those who didn’t understand the term “non-renewable”), causing most airlines to raise fares by $10-$20 per ticket.

United Airlines, Delta Airlines, Air Canada, Air Tran, and Midwest Airlines were specifically mentioned in the article, which also stated that “carriers tried to raise fares 23 times last year.”

United Airlines’ spokeperson Robin Urbanski “acknowledged [that] fares in and out of some cities are higher than they used to be, but ‘are still relatively lower than a few years ago given that fuel is our highest expense.’”

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<!– Begin Caleb’s Comments –>

As an environmentaslist, I’m always torn about the airlines… aviation is one of my favorite topics, and I’m a pilot as well.  My education is in aviation management and entrepreneurship, so I also understand costs and profit motive – in aviation and in other businesses.  I also know that some environmentalists will just say, “Good.  Higher ticket prices mean fewer people will fly, and flying is a large carbon-footprint-producer.” I don’t necessarily think it’s that simple (nor should it be).

Business-people in general claim to be (and try to act as if they are) future-focused.  More than anything else, that means that they are focused on the future of their company’s profits for the sake of their shareholders.  What I don’t understand is that these same business people generally aren’t thinking about where their company’s future supplies will come from when the current supplies are gone.

Business people “get” supply and demand – it’s basic economics.  If the demand exceeds the supply prices go up.  Guess what is happening with oil prices, folks?  Demand continues to exceed supply… and the market responds.  As prices increase, demand SHOULD decrease – but oil is an inelastic commodity.  In other words, if you have to get to work to survive, you’ll put gas in the tank of your car when the tank is empty no matter the price.  You don’t have a choice.

The airlines survive on jet fuel.  It is their largest expense and it is their life-blood.  Without it, they don’t have a business.  So where will it come from when the jet fuel is gone?  Or when its cost is too high for your customers/passengers to bear any more increase in ticket prices?

Why aren’t the leaders of the airline and transportation industries hot-under-the-collar for alternative fuel?  Or alternative propulsion technologies?  Why aren’t the airlines using some of their estimated 3.5-4.5 billion dollar profits to speed up the research of alternative and renewable fuels?

Frustrated in Fantasyland,
A. Caleb Hartley

The Czechoslovakian-built L-29 jet flew for 37 minutes on a test-flight at altitudes up to 17,000 feet on October 2nd of 2007 (the first 100% biodiesel fueled flight was a shorter one on October 1st).

The plane used recycled vegetable oil from restaurants (which had an additive treatment to remove the carbon-chains from the oil).  Another planned flight from Nevada to Florida was supposed to heppen in November, but has been delayed.

The pilots (Douglas Rodante and Carol Sugars) are planning to modify a learjet to use biodiesel fuel on an around-the-world flight in 2008.

Links to information about the flight:

• http://www.aopa.org/aircraft/articles/2007/071030biofuel.html
• http://www.gizmag.com/go/8204/
• http://www.biofuelreview.com/content/view/1270/
• http://www.projectsmonitor.com/detailnews.asp?newsid=14777
• http://www.doctordiesel.com/AviationHistory.pdf

Namaste,
A. Caleb Hartley

Today is a rare day where we have a not-so common combination of all three!  On the Logistics Today website the other day there was an article called “Air Group Pushes Environmental Programs.”  Giovanni Bisignani, director general of the International Air Transport Association (IATA), said, “The $132 billion fuel bill that airlines pay is the biggest green incentive of any industry to reduce its carbon footprint.”

Since fuel is any airlines biggest expense, it only makes sense for the IATA to try to help airlines reduce the amount of fuel they burn (or, to put a green spin on this solely profit-motivated opportunity, to increase their efficiency), IATA appointed former World Wildlife Fund (WWF) Chief Operating Officer (COO) Paul Steele to direct new environmental initiatives of the association.  IATA, under Steele, has built an environmental strategy based on the following four elements: new technology, improved infrastructure, efficient operations, and economic incentives.

The article states that IATA helped reduce emissions of carbon dioxide by 15 million tons in 2006, though it does not say how it did so or how the reduction was calculated; however, I will stand by environmentastic!’s policy that any focus on the environment is good – even if just to increase awareness of what is possible!

Namaste,
A. Caleb Hartley