Thu, Aug 11, 2005
Some Carriers Forced To Fly In Fuel To Keep From Running
Dry
Forget record crude oil prices topping $64 a barrel. Forget
hedging. For now, just keep the tanks full.
Supply crunches in Florida, Nevada California and Arizona have
left some carriers within days -- or even hours -- of running out
of jet fuel. So far, no flights have been delayed or canceled
because of the shortfall, but carriers have been forced to truck in
or even fly in additional fuel to meet their needs.
The problems appear to be geographically-oriented. The
hardest-hit areas have suffered from pipeline problems, hurricanes
and underproduction at refineries. The net result, according to
Southwest Airline's director for fuel purchasing is "unprecedented
for Southwest for the number of cities where we've had to manage
supply problems." Glenn Hipp was quoted by the Associated
Press.
"It's really starting to surface as
an issue," James Holland, vice president of logistics at Kinder
Morgan Energy Partners, told the AP. Holland's company operates
pipelines.
While passenger traffic is now growing beyond pre-9/11 peaks,
capacity at both refineries and pipelines hasn't kept up. More than
any shortage of crude oil, the lack of sufficient refinery
capabilities has driven up the price of crude oil.
"If more effort isn't put into resolving some of these issues,
it could have serious impact on the operational integrity of the
whole aviation system," warned Bob Sturtz, general manager of fuel
at United Airlines, in a statement to the AP.
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