A Historic Milestone has just been reached — destined to send the Industry soaring to Rich New Heights…
The pain from the Great Recession is still fresh in the minds of the airline industry.
Scars remain from an economic blow that dropped the industry hard to the canvas in 2007.
Profits were zapped; a number of airlines went down for the count while others came close to throwing in the towel.
Airlines kept calm and carried on, but it wasn’t pretty.
To keep their heads above water in the years since, thousands of jobs were cut, routes that made no money were cancelled, and companies did their best to cram passengers into every seat before takeoff.
With fewer flights into smaller airports, many short haul jets were grounded in favor of larger capacity planes flying into major airports.
Airfares also got pricier, with the average domestic roundtrip fare now costing $374 – a 4% rise from 2007.
And let’s not forget the flurry of M&A’s that ensued, most notably Delta/Northwest and United/Continental.
In the aftermath of all these drastic measures, the industry finally began to feel some sense of stability. Then another milestone event occurred — one that has major ramifications for the entire industry of flight.
The New Way to Power Planes
The historic event occurred on October 29. And despite its significance, it was barely mentioned in mainstream media. In fact, you would need to seek out trade publications like Aviation International News (www.ainonline.com) or Green Air (www.greenaironline.com) just to get any meaningful narrative on the story. So let me explain…
What would appear to be just another Monday morning roundtrip flight departing and arriving into Ottawa International Airport was in fact something entirely different.
The plane in question was an unassuming Dassault Falcon 20 commercial jet – but with one major difference:
It flew using 100% biofuel – a world first.
The unblended fuel was developed by Ottawa-based Agrisoma Biosciences Inc. using non-food Brassica carinata oilseed crop.
The plane reached a cruising altitude of 30,000 feet before descending.
As Agrisoma CEO Steven Fabijanski noted, “To date, all powered flight has relied on fossil fuel. This flight changes everything: we have witnessed petroleum-free aviation.”
To environmentalists, this was a momentous occasion.
The industry is constantly pressured to find ways to reduce their carbon footprint – this was the biggest step that’s ever been taken towards sustainable flying.
Even for biofuels themselves, controversy has stemmed from the use of crops such as corn (ethanol) which severely impacts food production and prices.
The ability to refine oil from non-food crops eliminates that debate altogether.
But there is also a silver lining for airlines and their investors – they are seeing this breakthrough as the key to increasing profit margins.
That’s because jet engines don’t need to be specially-built in order to handle the new biofuels.
With a few minor tweaks, both new and existing aircrafts can be efficiently powered by biofuels without any hardware overhaul.
Granted, the pure biofuel used in the Falcon 20 didn’t come cheap – but it clearly demonstrated the possibility of moving towards a sustainable, plant-based alternative.
And the business case is definitely building…
- Scores of biofuel-based flights have been conducted since the first in 2008 when Virgin Atlantic used a 20% biofuel blend in one of its Boeing 747s.
- The subsequent flights have attempted everything from algae to waste cooking oil to power their engines.
- The USDA and Department of Transportation have extended their agreement to see that one billion gallons of aviation biofuels are produced in America by 2018.
- The American Society for Testing and Materials (ASTM) has already approved the use of up to a 50-50 blend of biofuel and conventional jet fuel for use on commercial flights.
- With demand set to rise, the International Air Transport Association estimates that biofuels will make up 30% of all jet fuel supply by 2020.
Undoubtedly, it’s bullish times ahead for biofuel producers.
Ones to keep an eye on include: San Francisco-based Solazyme (NASDAQ:SZYM), Finland-based Neste Oil (HEL:NES1V) and Evanston, Illinois’ General Biomass.
Although each of these companies has developed their own unique blend of biofuel, the growing interest to adopt biofuel for aircraft use will be a boon to all of them.
Even as biofuels are fast-becoming a critical fuel source for the aviation industry – other modes of transportation could soon follow suit.
In the meantime, look skyward and witness history in the making.
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