How Northwest Partnership Led to Solutions for High Jet Fuel Costs



In news coverage about the airline industry, there are countless worldwide news reports about the plight of most airlines suffering from high fuel costs.

So, it’s about airline jobs, and commerce – enhanced aviation service for businesspeople and consumers — as fuel expenses constitute as much as 30 percent of an airline’s operational costs.

But an aviation biofuel industry has taken hold in the Pacific Northwest, thanks to a  partnership called Sustainable Aviation Fuels Northwest (SAFN), which produced results from a 10-month study in May, 2011. In effect, the report is a SWOT analysis for developing public policy and biofuels for the airline industry.

The study’s partners: Boeing (NYSE: BA), Alaska Airlines (NYSE: ALK), Portland International Airport, Seattle-Tacoma International Airport, Spokane International Airport and Washington State University.

“It is critical to the future of aviation that we develop a sustainable supply of aviation biofuels,” said Boeing Commercial Airplanes President and CEO Jim Albaugh. “Airlines are particularly vulnerable to oil price volatility, and the aviation community mst address this issue to maintain economic growth and further mitigate the environmental impacts of our industry.”

How will it be possible?

“The Pacific Northwest has the diverse feedstocks, fuel-delivery infrastructure and political will needed to create a viable biofuels industry capable of reducing greenhouse gases and meeting the future fuel demands of the aviation industry,” states the SAFN’s press release . “Creating an aviation biofuels industry, however, will depend upon securing early government policy support to prioritize the aviation industry in U.S. biofuel development.”

SAFN indicates a biofuels industry for aviation is the next logical step, and explains how it can be accomplished.

“To make a sustainable biofuels industry a reality, the study outlines an integrated approach recommending the use of many diverse feedstock and technology pathways, including oilseeds, forest residues, solid waste and algae,” according the SAFN press statement.” In addition, the study outlines the long-term importance of securing aviation biofuels as a top government priority and using the aviation industry to drive growth in domestic production.”

The SAFN study encompassed the full gamut from biomass production to airline usage.

“However, as with any new energy supply, political support at the state and federal level is critical in the early stages of development,” cautioned the press release. “While the study does not advocate for permanent government support, it recognizes that focused public investments and parity with other biofuels programs will be needed to place the industry on an economically competitive basis.”

Participating airports

Port of Portland is one of the three Northwest airports that are participating in SAFN.

“The Northwest is uniquely positioned to serve as a blueprint for developing a U.S.-based, sustainable aviation biofuels industry,” said Steve Schreiber, Port of Portland aviation director.

The Port of Seattle says biofuels for aviation are an environmental solution.

“Airports have been leaders for years in finding ways to reduce their environmental footprint, from clean fuel sources for taxis and shuttles to electrification of ground equipment and pre-conditioned air, but in order to take the next big step we have to address emissions from aircraft,” said Bill Bryant, Port of Seattle commission president.

“We can’t get there without biofuels. It not only will help the sustainability of the Northwest but also the aviation industry,” he asserted.

Spokane International Airport says biofuels is important for competitiveness.

“We can no longer base our future on imported petroleum, especially if the United States wants to remain an aviation leader,” said Lawrence J. Krauter, chief executive officer, Spokane International Airport. “The SAFN study proves domestic biofuels are feasible and offers an economic opportunity for us to remain competitive as an industry and move toward a sustainable, domestic fuel supply.”

Washington State University

Washington State University makes a prediction.

“WSU will combine our world-class biofuel and agricultural researchers along with significant institutional assets to leverage the Northwest’s abundance of agricultural and natural resources necessary to create a dynamic new aviation fuels industry,” said Dr. John Gardner, vice president for Advancement and External Affairs at Washington State University.

“The long-term payback will be a stateside industry that greatly enhances our traditional economic strengths; from farming and forestry to engineering and aerospace, creating new opportunities and new jobs for the Northwest,” added Dr. Gardner.

SAFN originated in 2010 with more than 40 partners.

From the Coach’s Corner, here are articles related to the airline industry:

Lessons for Struggling Businesses from American Airlines — Labor strife, high expenses, bankruptcy and now a merger: In a sense, a legendary American company bites the dust. In a bid for sustainability, the American Airlines (AA) $11 billion merger with US Airways makes it the world’s largest carrier.

Strategic Planning Lessons: Why United Airlines Was Forced to Merge with Continental — United Airlines (UAL) was forced to merge with Continental Airlines because of anemic strategic planning. It was a $3-billion merger with about 1,200 jets and more than 86,000 workers. Sadly, after eight decades, UAL’s logo is history. The Continental logo remains.The merger entailed a mega review of 2,000 policies and procedures.

Boeing, Airbus Rivalry – Lessons in Strategic Planning — It would make a great Hollywood movie. Boeing leads Airbus in the sales war so far in 2014. Boeing has sold 941 aircraft to Airbus’ 722. Delivery-wise, Boeing also leads Airbus 461 to 289. However, each has at least an eight-year backlog in delivering jets. Probably to the chagrin of the American company, Airbus has invaded Boeing’s home turf – it’s assembling 10 percent of its A320s in Alabama. And China is building jets to compete with Boeing and Airbus.

“Where there is an open mind there will always be a frontier.

-Charles F. Kettering

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Seattle business consultant Terry Corbell provides high-performance management services and strategies.