Source: Reuters Author: John Crawley 09/30/2009
Subject Concerned: Government Airlines Aviation Fuel
U.S. commercial airlines and military aircraft would make a strong long-term market for alternatives to jet fuel, said Glenn Tilton, the chief executive officer of UAL Corp and its United Airlines unit.
Speaking at an energy conference on Sep. 30, Tilton said commercial airlines remain financially fragile and do not have the cash to or credit capacity to fund development of new fuels infrastructure.
Large-scale investment would be up to government incentives and other private resources, Tilton said, without setting a cost target or timeframe.
"We're willing to step up and be the buyers," he said of alternative fuel sources that could act as a cleaner burning hedge against expensive crude oil resources.
U.S. airlines paid US$58 billion for fuel in 2008, an increase of US$16 billion over the previous year, industry figures show. Airlines consume between 18 and 20 billion gallons of jet fuel annually.
"Volatile increases in fuel costs devastate the industry's bottom line," Tilton said.
He said airlines are committed to seeing the expansion of specifications for jet fuel options from renewable and non-renewable sources.
"We are actively supporting and seeking funding for this work. We are working with relevant government agencies and also with agricultural interests, universities, independent researchers and the military," Tilton said.
Earlier this year, the U.S. Energy and Agriculture departments announced US$25 million in research loans and grants for aviation and other biofuels.
Tilton said oil price volatility has made investors and markets "nervous about committing capital" to the development of alternative fuels.
"With government bridging, private investment can take over," he said.