Posts Tagged ‘fuel prices’
What Do We Really Know About BizAv?
Maybe this most recent economic crisis wasn’t Armageddon, but I think I saw a Guernsey or two fall somewhere over central Mississippi.
The technology and practices of our industrial world are changing at a mind-boggling pace. Since we started blogging just over a year ago, the advancements have been staggering, allowing us to begin developing a “wouldn’t-it-be-cool-if” idea into a “isn’t-it-be-incredible-that” reality. However, if we had kept believing that we already knew it all, we would still be sitting on the porch, whittling, rocking in our chairs and wishing for a brighter reality.
This Big Idea is a gamble, to be sure; Big Ideas always are. But, to take our industry into its next great phase, we must accept that, “There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy.” We must reject bad managerial habits that keep us trapped in a paradigm which ceased to be profitable years ago. Aircraft operators are frustrated by rising fuel prices, rising training costs, rising salary and benefits costs. Equipment is getting older. Remaining competitive means newer equipment, higher standards and better practices. Meanwhile, many charter brokers insist on lower pricing, sometimes to the point of incorrectly educating the end-user on the actual cost of operating aircraft to the highest standards. Sadly, even some operators have been willing to operate below cost just to produce the cash flow. Reputable operators know what it costs to run a quality operation. Reputable brokers also know this and are willing to support the operators’ reasonable pricing structures to their own clients. But I digress. My point is this: charter operators are frustrated with rates which are not keeping pace with rising costs. Even with this frustration, we hamstring ourselves by acting conservatively out of fear of making mistakes and by avoiding anything new until it’s better understood. Neither habit is bad altogether, but the over-application of either of them can be deadly.
As I discussed the Big Idea with a few operators this week, I was discouraged at the response of many of them. If the Idea is flawed, I would expect rejection and would hope that someone would point out the fatal flaw; but, that’s not why it was rejected. Their rejection of the Idea stemmed from “I’ve never thought of that” and “We’ve never done it that way before,” not from the Idea’s merits or demerits. It’s one thing for an industry to suffer or fail due to catastrophic and unforeseen market changes, but that isn’t the case here. The market has been changing for at least the last 10 years. As operators and brokers began aggressively selling one-way trips, introducing our product to a wider audience, the market has been changing. As the global economy was reeling, our market changed further with more aggressive pricing, air taxi services, and ride sharing. I often here people lamenting the loss of the “good old days.” Let’s face it: the good old days weren’t all that great either. We still struggled. We still worked on narrow margins. I don’t think we worked any less hard, but maybe we worked a little less creatively.
While we’ve gotten more creative, it’s time for us to make a big creative leap now. Sharing flights is a creative way to broaden our market. Using social technology to share those flights is a creative way to work smarter. It’s the next Big Idea.
So, yes, 150 years ago, everybody knew man couldn’t fly. 70 years ago, everybody knew that supersonic flight was deadly. And 15 minutes ago, you knew that shared flights would never work. Once we accept that we don’t know our market as well as we think we do, we allow ourselves to adapt our industry to the new marketplace. When we use social innovations like Social Flights to tap into that new marketplace, we broaden our reach.
If we can learn all of that today, embrace the Big Idea of flying socially, imagine what we’ll know tomorrow.
Can Biofuels Solve the Problem of Price / Supply of Fuel for the Aviation Industry
There is recent news about the development of algae-based biofuel to be refined into jet fuel being promoted by the Defense Advanced Research Projects Agency (DARPA), an office of the US Department of Defense. In addition to DARPA’s funding, Exxon is also investing heavily in the research and development of this alternative to fossil-based fuel.
This holds promise for all aviation industries to provide a stable and environmentally friendly fuel source for jet aircraft.
Quoting from a post in the UK Guardian (guardian.co.uk, Saturday 13 February 2010):
Unlike corn-based ethanol, algal farms do not threaten food supplies. Some strains are being grown on household waste and in brackish water. Algae draw carbon dioxide from the atmosphere when growing; when the derived fuel is burned, the same CO2 is released, making the fuel theoretically zero-carbon, although processing and transporting the fuel requires some energy.
The industry received a further boost earlier this month, when the Environmental Protection Agency declared that algae-based diesel reduced greenhouse gas emissions by more than 50% compared with conventional diesel. The Obama administration had earlier awarded $80m in research grants to a new generation of algae and biomass fuels.
For Darpa, the support for algae is part of a broader mission for the US military to obtain half of its fuel from renewable energy sources by 2016. That time line meant that the Pentagon needed to develop technologies to make its hardware “fuel agnostic”, capable that is of running on any energy source including methane and propane.
Unlike corn-based ethanol, algal farms do not threaten food supplies. Some strains are being grown on household waste and in brackish water. Algae draw carbon dioxide from the atmosphere when growing; when the derived fuel is burned, the same CO2 is released, making the fuel theoretically zero-carbon, although processing and transporting the fuel requires some energy.
The military anticipates testing of the fuel to begin next year with full scale production in 2013.
Commercial Aviation has been plagued with unstable pricing of both Jet Fuel and Aviation gasoline. The extreme price swings have wrought havoc on the profits of the airlines and air charter providers around the world.
DARPA is projecting that this fuel can be produced initially for around $3.00 per gallon which is not too far off the prices we are currently paying. Initially the fuel will be supplied to the military but if proven commercially viable, why can’t the rest of aviation benefit as well?
This makes sense for the United States to produce and develop fuel supplies domestically, keeping the money and jobs at home.
Whether you are in the global-warming environmentalist camp or not, you have to agree that it would be great to have a fuel supply that is not based on buying fuel from countries that are not so friendly to the U.S. Let Hugo Chavez and the terrorist supporting states in the Middle East sell their oil to someone else.



