Monday, May 25, 2009

Flight Plan for the Auto Industry

When it comes to commercial aviation, there are two certainties -- bankruptcy and better airplanes. Warren Buffett said it would have a favor to every airline investor if someone had shot down the Wright Brothers on their big day at Kitty Hawk. Instead, airlines have come and gone while engineers have designed better and better aircraft over the last 100 years.

However, it appears that Boeing now believes the creative destruction of capitalism may pose too big a threat and that a little relief is in order. How much lighter and more fuel efficient can aircraft become? To ensure its future the company has proposed a plan to improve the entire aviation industry with a mix of private and public capital. It's interesting to see this development in an industry in which every airline has gone bankrupt, and it is especially interesting considering the bankruptcies of Chrysler and GM. Nevertheless, a hundred years of existing on the edge of failure has led to extraordinary developments in aviation.

For much of the last 50 years most of the auto industry was insulated from the harsh discipline of the markets. However, those days are gone. The painful and transforming experience of the aviation industry over the last century shows that the domestic auto industry can respond with equal or greater success. No doubt it will survive and probably begin producing some great cars and trucks soon. But it's all about giving the customers what they want. Not what politicians and bureaucrats want.

MAY 23, 2009

How Boeing Fights Climate Change
The efficiency of jets has increased by 70% over the past 50 years.

Addressing climate change is a particularly difficult challenge for commercial aviation. While technologies like batteries work for cars, they don't work for airplanes that require powerful propulsion systems. The good news is that there are things we can do to significantly reduce the carbon footprint of commercial planes -- and we're well on our way.

At Boeing, we're tackling carbon emissions on three fronts.

First, we are working to make each new generation of airplane lighter and more fuel efficient. There's plenty of incentive to develop more efficient airplanes.

Historically, fuel has been the airlines' second-biggest operating expense next to labor. Last year, with oil reaching $140 a barrel, fuel costs even outstripped labor costs, rising to 40% of total airline operating expenses. So airlines have demanded increased efficiency from airplane and engine manufacturers. And manufacturers have responded big time.

Over the past 50 years, the efficiency of commercial jets has risen an astounding 70%. This means that carbon emissions per mile flown have dropped 70% -- all without a regulatory requirement for greenhouse gas emissions.

That said, we believe properly structured regulations could be useful. It's not often that an industry asks for additional regulation, but Boeing, GE and other airplane and engine manufacturers are convinced that a fuel-efficiency standard for new airplanes is an effective way to drive the development of fuel-saving technologies.

Specifically, we're advocating for an efficiency standard for new airplane designs. An efficiency standard would be straightforward and easier to implement than a standard for aircraft operators. And it would help ensure that we continue to see the kind of technological and environmental breakthroughs we pioneered with the 787. The International Civil Aviation Organization should define the new standard, just as it successfully established global standards for both airplane noise and oxides of nitrogen emissions.

While it's important to make airplanes more efficient, it's also critical that the system in which they fly is modernized. That's why our second major initiative is the work we're doing to improve air-traffic management.

Fortunately, the technologies needed to give controllers and pilots a more precise picture of weather conditions and airplane positions, and the networking technologies needed to instantaneously share that information, already exist.

Precision information, commonly shared, safely enables such fuel-saving and emissions-reducing operational changes as continuous, low-power descents, more direct routing, closer spacing, and curved approaches to landing. The challenge is getting the government to make the Federal Aviation Administration's plan for implementing these technologies, called NextGen, a priority.

The government should commit long-term funding to ensure that it's completed as swiftly as possible.

Third, we have been testing various advanced, sustainable biofuels with the goal of finding renewable fuels for aviation that don't compete with food crops for land and water and that emit 50%-80% less carbon than petroleum.

We have conducted test flights using mixtures of standard jet fuel and several different sustainable biofuels, among them fuels made from algae and camelina (a plant that produces seeds that aren't used for food). All performed extremely well in flight.

What's more, we have demonstrated that these and other sustainable biofuels have a lower freeze point than petroleum -- a very important characteristic for aviation. They also can have higher energy content per gallon.

We're confident that sustainable biofuels will be price competitive with petroleum in the long-term. But government help -- consistent with international trade agreements -- is needed to get an aviation biofuels industry up and running.

One proposal is that government could provide loans to refiners to make biofuels competitive when the price of petroleum is low and get repaid when the price of petroleum is high. We hope government officials will seriously consider such ideas because biofuels, in our view, are the ultimate answer to aviation's carbon-emissions challenge.

These three initiatives represent the best path forward for reducing aviation's carbon footprint. Establishing an international fuel-efficiency standard, modernizing air-traffic management, and commercializing an aviation biofuels industry would seriously address the issue of climate change. Our industry is eager to take on this challenge, but we need government help to make it happen.

Mr. Carson is president and CEO of Boeing Commercial Airplanes.

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