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Fuel is expensive — it’s generally the largest operating expense of major carriers — so it’s no surprise that airlines are investing in alternatives with the hopes of potentially decreasing the cost of flying in the future. The New York Times reports that later this summer, United will operate flights from Los Angeles to San Francisco using biofuel, as part of its eco-skies program.
Furthermore, today, United Airlines announced a $30 million investment in an alternative fuel manufacturer, Fulcrum BioEnergy, Inc. Fulcrum is working to convert municipal solid waste into sustainable aviation biofuel. Together, Fulcrum and United are in talks to develop five projects near United hubs that they believe will have the potential to produce up to 180 million gallons of fuel per year.
Almost a year ago, Cathay Pacific announced its own equity stake in Fulcrum BioEnergy. The Hong Kong-based airline hopes to become carbon-neutral by 2020, and at the time, suggested that this was an important step in achieving that goal.
It’s no secret that aviation fuel is an airline’s single largest expense, and airlines are always looking for ways to bring that cost down, or pass the cost along to consumers in the form of fuel surcharges or increased fares. Last year, United spent [PDF] $11.6 billion on 3.9 billion gallons of fuel, representing 32 percent of the airline’s total operating expenses. This is not United’s first foray into alternative fuels — in 2013, it agreed to purchase 15 gallons of alternative jet fuel from AltAir. United claims a 50-percent reduction in carbon emissions from using AltAir biofuel, while Fulcrum claims a 80 percent reduction in carbon emissions compared to traditional jet fuel from using its biofuel.
United hopes to begin flying this summer on the first 5 million gallons of AltAir fuel on four or five flights a day from Los Angeles to San Francisco. United says that the fuel will be a 30/70 blend of biofuel to traditional jet fuel. The New York Times reports that Fulcrum can produce its fuel at a cost significantly below $1 per gallon. Last year, United spent, on average, $2.99 per gallon on fuel, so Fulcrum’s fuel can remain competitive with traditional jet fuel.
This aims to be a positive for the aviation industry — though perhaps not for the oil giants as airlines progressively move toward more sustainable fuels and cut down on their largest expense.
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