It would be interesting to find the ‘press release as a news story’ that helped seperate Queenslanders from their cash when Peter Beattie pushed the shale oil barrow or when suckers err investors parted with their hard (and some not so hard) earned money to invest in ‘free geothermal energy’.

The reality is that all electricity authorities as well as federal and state governments are all wondering where there next energy grid will go and how it will be paid for, let alone coping with thousands of electric cars running around the countryside requiring special plugs to charge from.

The story / interview by Alan Kohler (ABC) of – excuse the snigger – a Better Place Australia at the end of this.

San Francisco has adopted building codes that require all new homes and offices to be wired for electric car chargers, in an attempt to position itself as America’s environmental car capital. The move comes before the release this year of the Nissan Leaf and Chevy Volt, which promise to deliver driving distances of 65 kilometres or more on a single battery charge and are being marketed to middle-class families.

Local authorities are starting a lending scheme next month to encourage homeowners to install their own charging stations through a green financing program. [hope its more successful than our Green Loans program]. The move confirms California’s reputation as America’s greenest state, as it led the country in putting limits on vehicle emissions and imposing higher efficiency standards for homes and appliances such as flat-screen TVs.

Terry Tamminen (who advises California’s governor, Arnold Schwarzenegger, on energy and environment) said ‘people can’t be trusted to charge only at night and discharge in the day’. And San Francisco’s main supplier (Pacific Gas & Electric), is sketching out ”heat maps” of neighbourhoods at risk of overloads and blackouts when suburban motorists begin plugging in their cars. It can take eight hours, drawing only on the domestic power supply, to charge an electric car, though dedicated charging stations take a fraction of that time.

There is scepticism that Mr Obama will be able to deliver on his promise to put a million electric vehicles on the road by 2015, with a population of 306 million people (0.33%); with a population of 26 million people in Australian, thats 85,000 electric cars, but with a sparser population spread.

Dave Kimble crunched a few numbers and came up with the following;
If you need to charge your car during the day, say 8 hours at 4 KW at 18.8 cents/KW.h = $6.02 so you would be paying maybe $4 more than a night charge so you would go ahead anyway. But the trouble is the grid doesn’t have the capacity during the day, so more generating capacity is needed.

Smart meters would be the way to go, but ultimately you would have to say no to some demand, which is alien to our current culture, pardon the pun. Ah, now I remember why I was asking after the power consumed of desalination – the point is we need some electricity-intensive but non-urgent task that can be used as a grid-stabilising demand.
A Government run operation that can be forced to work with the power generators to smooth out the load when people just flick a switch and expect things to happen.

End

Apparently, it isn’t so much about the energy as the financing model and having convenient swap-out spots to enable long-distance driving. Can anyone see any way that this can happen without requiring either new coal-fired power stations or nuclear energy? i.e. considering the already growing demand for electricity in Australia, and how the output
from any new wind farms are just soaked up by the new houses and their new air conditioning..

So do electric cars offer an attractive proposition for Australia ?
[Broadcast: 21/03/2010 http://www.abc.net.au/insidebusiness/content/2010/s2851753.htm

ALAN KOHLER, PRESENTER: Later today the Victorian motoring association, RACV, will commit $2 million to electric cars through an investment in Better Place Australia, the company leading the push to set up a national re-charging network.

So I spoke to its CEO, Evan (sic – gold tooth) Thornley about the future of electric cars.

Evan Thornley how does the deal with RACV work, are they just buying a piece of Better Place ?

EVAN THORNLEY, BETTER PLACE AUSTRALIA:

Yeah, well it’s a strategic partnership, the RACV obviously represents 2 million motorists in
Victoria and they’re very excited about the transition to electric vehicles so we’ll be working with them in roadside assistance, we’ll be working with them on a range of strategic projects but they are also putting their money where their mouth is and making an investment in the company.

ALAN KOHLER: How much do they get for $2 million?

EVAN THORNLEY: Oh, well we don’t talk about valuation Alan but I think it’s part of the wider trend that we are seeing. Obviously we’ve raised our first round in Australia, led by Lend Lease. ACTEW AGL, our utility partner in Canberra, is also an investor. And that’s part of what we are seeing globally. Better place globally has raised about $US700 million in the last two years through the middle of a global financial crisis.

ALAN KOHLER: So why don’t we talk about valuation, I mean as you say Better Place in the US has raised $700 million and you’ve raised some money here, what’s the ballpark? That people are paying?

EVAN THORNLEY: I think the only thing I can talk about, you know, we’re a private company and that’s part of the joy of being a private company. But it’s on the record that Better Place globally did its last $350 million round on a valuation of $US1.25 billion, so that’s obviously very significant for a two-year-old company. But I think it’s about, that’s the scale of the opportunity, there’s a $24 billion petrol market in this country, we think it will be a $40 billion market by 2020, we think that you could make an infrastructure investment of about $600 million dollars that puts you in a position to launch an incredibly aggressive substitute product into that market.

ALAN KOHLER: What do you think the market in total is going to be in supplying electricity both batteries and so on to cars?

EVAN THORNLEY: We think it’s somewhere between 10 and 20 per cent of the Australian car fleet by 2020 will be running on electric. So that means probably a larger proportion of the petrol market because the cars that are most likely to be most attracted to going electric are the large ones, the people who drive around the outer suburbs of Australia in our large cities, they’ve got three, four, sometimes five, six thousand dollar petrol bills.

If you can replace that with a $1000 worth of renewable electricity and cover the capital cost of the battery then that’s a pretty attractive financial proposition.

ALAN KOHLER: I suppose as a sidelight that’s not great news for Australian manufacturing since most of the large cars are made here and it doesn’t look like the electric cars will be made here?

EVAN THORNLEY: Well I hope that they will Alan, I think it’s an enormous opportunity for the Australian car industry and the Auto Innovation Council which is a representative body of the whole industry recently put out a vision statement saying that they thought that Australia should be one of the world’s leading producers of large, powerful, zero emissions vehicles. I think they’re right, it’s what customers want in this country, it’s what we know how to build, it’s where the money is, there’s much more margin in large cars than small cars and there’s certainly much more money in the energy for large cars than small cars and I think there’s still a global leadership position open in the large car market so we think that’s – and obviously others think – that’s a tremendous opportunity for the Australian car industry and I hope they take it up.

ALAN KOHLER: So how much more will an electric car cost, which I guess is the cost of the battery?

EVAN THORNLEY: Well we don’t think they’ll cost any more but let me explain why, and this is part of the way Better Place works. When you produce at similar volumes the electric, pure electric vehicles will be as cheap or cheaper to build than their petrol equivalents. You know, an electric motor has got one moving part, it’s a very simple but
very efficient device. The expensive part is the battery but the even more expensive part of the petrol car is the petrol and so…

ALAN KOHLER: But I’m talking about the capital costs not the running costs, what’s the actual cost of the car?

EVAN THORNLEY: Well, so the capital cost of the car would be the same or less than a petrol car…

ALAN KOHLER: …including the battery?

EVAN THORNLEY: Not including the battery, but if somebody like Better Place or indeed the car companies pays for the cost of the battery and then gets a payment from the customer that is equivalent or less than their petrol costs for the running costs then you end up with a car that is as cheap or cheaper to buy and as cheap or cheaper to run.

This is not about a green premium thing, this is not about a small group of people who are willing to pay a lot more money…

ALAN KOHLER: …sounds like a mobile phone plan, is that what it’s like? You give the batteries away and then you charge, the cost of the batteries is embedded in the cost of the plan, is that what happens?

EVAN THORNLEY: Well I guess there’s an analogy there yes, people buy a handset and then they connect to a network. You see, you do that with cars at the moment, you just don’t realise you do. You know, the last page of the contract you didn’t realise you signed
when you bought a car, said ‘and I promise to bring it back to the global oil cartel for the rest of its natural life and pay whatever’s on the bowser’.

ALAN KOHLER: So how will your business work, are you going to charge the cars at home as well as on the road?

EVAN THORNLEY: Absolutely, look the way electric cars work will be different to the way petrol cars work. When you park the car you plug it in, when you get home with your mobile phone you plug it in, you keep the battery being topped up all the time, you can’t really top up a petrol car, there’s no guy running around with a little tanker in every car park topping up all the things or coming to your house and topping it up but you can do that with an electric car.

So the most important thing is when you park the car you plug it in, our job is to put those plug-in points wherever people have their cars parked for a long period of time, that’s mainly in their garage at home, in their car park at work and then in some public places, shopping
centres, airports etc where they’re parked for a long time. So that is what you would do most of the time so instead of going to the global oil cartel once a week and paying whatever price is on the bowser, when you park the car you plug it in and you drive whenever you want.  Every once in a while you do a long drive that will take more energy
than you can store in your battery and to deal with that we have battery swapping stations, they’re completely robotic you can go in and out in less than three minutes and get a brand new fully charged battery in your car so, with a combination of a large number of plug in points and a small number of battery swapping stations, mainly on the outer rims of our major cities and the big connecting highways, you’ll be able to drive wherever you want, whenever you want.

ALAN KOHLER: And when are you going to start rolling these things out, when are you going to start doing it?

EVAN THORNLEY: So we will be building the infrastructure (obviously there are car makers across the world making electric cars, we don’t make cars we provide the infrastructure for the energy) we’ll start in Canberra in late 2011, Canberra and southern New South Wales to do our first roll out and then we’ll be rolling out throughout the country
starting late 2012.

ALAN KOHLER: And will there be cars on the market here, electric cars?

EVAN THORNLEY: Absolutely. I think there’s 51 models currently that are scheduled to be in production in terms of plug-in vehicles around the world by 2012.

ALAN KOHLER: Do you know how many of those are going to be on offer in Australia next year?

EVAN THORNLEY: Oh look, I’m sure all 51 won’t be but the Australian car market historically in the way it’s been opened up in the last few years, you know we have a very diverse car market, most of the things you can buy anywhere in the world you can buy in Australia. We’ll be the third country in the world with a large scale charge network, Better Place is rolling out first in Israel in late 2011, secondly in Denmark but then third in Australia, so we’re going very early with the charge network, it’s a great opportunity for Australia and so we would expect that the car market will follow where the charge networks are.

ALAN KOHLER: If the cars cost the same and the monthly price of running the thing is going to be much the same or about the same, so why is it only going to be 10 or 20 per cent of the fleet, the Australian fleet in 2020?

EVAN THORNLEY: Well I think there’s going to be a tipping point, now exactly when that tipping point is relative to 2020 I can’t tell you. I think it will tip a few years before 2020 and it will be on a very steep growth path.

ALAN KOHLER: So do you think they’ll be a time when every car is electric?

EVAN THORNLEY: Yes I do. Look we know how the movie ends, battery prices are going down, petrol prices are going up, that tells you what’s going to happen it’s just a question of how long that takes. We think it will take between 20 and 25 years for the entire Australian
fleet to transition from petrol to electric because it takes a while for things to transition but we think you’ll kick in to the sort of sharp end of that s-curve around the middle to the early second half of this decade.

ALAN KOHLER: Thanks for joining us Evan Thornley.

EVAN THORNLEY: Thanks very much Alan.

Given that most intelligent fund managers must know of Peak Oil, rising fuel costs and reducing road trips resulting in toll tunnel businesses going bust, why would they be looking to waste over a billion $’s to buy into a consortium of toll related companies ?

Who will benefit from this ‘investment’ of people’s future retirement funds? One might reasonably suggest the fund managers themselves, because their members will not.
Future Fund intends to purchase a share of Transurban; putting between $1bn and $1.5bn into the bid, in an unprecedented deal in which it could end up with between 15 and 25% of Transurban (who owns Citylink in Melbourne, the Hills M2 in Sydney and has stakes in the M7, M4, the Westlink M7 and the Eastern Distributor in Sydney and investments in two toll roads in Virginia in the USA).  

Have we not already seen the stupidity where the transference of superannuation funds bails out failing companies … how can this corporate theft continue, unless condoned by corporate government itself.

Mr Murray claims this as a quantum leap in investment strategy for the fund – already partly managed by corporate manglers AMP, Citi and UBS – .and it would always need someone to manage an asset for it, but there were various ways of going about it.

He is alleged to have said ‘we are interested in the company because we are interested in infrastructure’; what a profoundly ignorant investment strategy !

Corporate government has blood sucked every spectrum of the gravy train, effectively squandering pensions and now superannuation funds, so the suggestion of the Future Fund having a long-term goal of having 30% of its assets in infrastructure and property will see the current fund size of $64bn easily drop by 90% within the next 10 years.

So if you are salary sacrificing, think again because at the end of the day, what you have in your pocket may well be all that you will have to survive on.

http://www.climatesummit.org.au/dayofaction

What a sureal world his children must grow up in, what fairytale stories of fanciful magic ….

In the Age, Reuss claims that ‘Australia’s favourite car could be fuelled by a combination of grass clippings and household waste in the future’.

Even this is a porky, as Toyota is the leading seller of cars in Australia, so wouldn’t that make them ‘Australia’s favourite car’ ?

Reuss says the company will release a version of its Commodore large car that ran mostly on ethanol by 2010 [that’s just 14 months away] and has started talks with a US company about building a pilot ethanol plant in Australia that turns grass clippings, woodchips and general household waste into ethanol [America is moving away, if but kicking and screaming from ethanol, a very unproductive fuel – And one also wonders how much Holden will ask the Australian People via the Government to pay for a company to sell us ‘magic fuel’].

Reuss says the E85 (an blended fuel that is 85 per cent ethanol and 15 per cent petrol) Commodores will be available with V6 and V8 engines and will produce more power than the current cars because of the fuel’s higher octane rating. [So who is going to pay all the petrol stations to tear up garage storage tanks, put new pumps in and store E85 for a car manufacturer that is on the ropes and wants government subsidies because sales a dropping; Holden’s Commodore will sink in the very near future]

Reuss goes on to say Holden will focus on reducing ts use of foreign oil by either by increasing efficiency or replacing oil altogether with Australian energy alternatives. [What a laugh and text-book response from the likes of none other than the great Peter Pan of the USA, George W].

Earlier this year, Holden’s parent company General Motors signed a signed a strategic partnership with United States biofuel developer Coskata and Reuss says Holden has also had talks with Coskata and they have shown interest in developing a plant in Australia. Coskata’s approach to bio-fuels has created widespread interest because it avoids the controversial process of converting food to fuel.  [What sort of a fool does Reuss take us for, we’ve had enough of American Pie-in-the-Sky bullshit and surely bought our last dodgy corporate philosophy – ALL enthnol fuels compete with us humans for arable food land]

Coskata claims its ethanol has the potential to reduce lifecycle greenhouse gas emissions by up to 84 per cent compared with conventional petrol. [What a crock of crap … everyone knows it takes more energy from coal, gas and oil than ethanol produces, it is one of the least efficinet fuels]

Ruess said ‘Australia needs to rid itself of its addiction to oil’.  NO, what we need to to do is rid Australia of Ruess and any other story-tellers.

Reuss says ethanol is not the only answer to reducing Australia’s fuel consumption and Holden will look at building more efficient diesel and petrol engines, introducing hybrid petrol-electric vehicles and encouraging the use of LPG, in which Australia is self-sufficient’.  Australia has some of the largest reserves of natural gas, all (100%) of our diesel oil comes from overseas, so why not gas powered cars ?

And a closing furphy from the ‘journalist’ of The Age ‘at the moment, Australia’s ethanol comes from waste by-products of cane and wheat, which use more water in the refining process’; my suggestion for energy efficiency, save your money and don’t buy The Age and avoid the heavily subsidized ethanol, otherwise onse you have invested in it, the price of ethanol will go through the roof and you will the latest version of the P76.

United States airlines are expected to cut capacity by 15 per cent as they retire less fuel-efficient jets, but already airline companies (see earlier stories) are dropping out of the skies.

And in Australia, Qantas and its budget subsidiary Jetstar have cut domestic and international services (sic) that they would ground aircraft rather than fly them on routes made unprofitable because of the rise in oil prices.

Virgin Blue is expected to follow suit and Tiger Airways said it would start charging $15 for every 20 kilograms of checked-in baggage.

This is the first time Qantas has cut services in response to a rise in costs rather than a fall in demand, as was the case after the attacks of Sept. 11 in 2001 and the Asian economic crisis and the SARS outbreak.

Chief executive, Geoff Dixon, said the company would ‘have to look harder’ at cutting its non-fuel costs even after yesterday’s announcement to reduce the airline’s capacity by 5 per cent and speed up plans to retire older jets, including Boeing 747-300s and to ground a newer Jetstar Airbus A320.

The grounding of the Jetstar A320 and cancellation of an order for a larger A321 mean Jetstar has scaled back growth plans for the first time since it was launched in 2004.

Although Unions fear Qantas could use rising fuel prices as a reason to drastically cut costs and move maintenance jobs to Asia, surely someone there must see the writing on the wall; that the airline industry will return to what it was in the past, for richer people and greatly reduced patronage.

Unions should be looking to spend money training people in other fields, rather than be re-active, they need to be proactive, look further into the future of members, not their way up the political ladder to some cushy parliamentarian job.

Qantas maintenance engineers – due to stop work for four hours today after another breakdown in negotiations over their demand for a 5 per cent wage rise and Qantas’s Mr Dixon saying it would not budge on its offer of a 3 per cent a year pay rise – need to understand the incremental eating way of their wages (apart from the need to provide a dividend to shareholders) that this is not a short term aberration, but the thin edge of the Peak Oil Wedge inextricably prising us off our addiction to fossil fuel energy.

In the not too distant future – one generation away – children will ask their parents, ‘what’s that thing in the sky’ if they see a plane.

The grounding of Eos follows the collapse of Maxjet last December and the announcement that Silverjet – which operates from Luton – is seeking a bailout from new investors.

L’Avion, which flies from Paris to New York, is also thought to be struggling.

Last night it emerged that mainstream carrier Continental Airlines had withdrawn from merger talks with United Airlines amid concerns about United’s financial health in the face of high oil prices.

Continental is now focused on a possible alliance with British Airways and American Airlines.

The pure business class airlines were launched over the past couple of years to take advantage of a boom in business-class travel between Europe and the United States.

They hoped to take on the established transatlantic carriers such as British Airways and Virgin by offering services tailored to business class travellers. However, sustained high oil prices have pushed up operating costs while the worsening economic environment has reduced demand for premium air travel and the new carriers struggled to compete with better-capitalised rivals.

None of the three premium-only carriers that operated from Britain has ever made a profit. In regulatory filings in America, Eos said that it had lost $37 million (£18.6 million) in the first nine months of last year on revenue of $53 million.

Silverjet was losing about £1 million a month and its share price has fallen from a peak of £2.09 last March to 14p. Eos (founded by David Spurlock, a former British Airways executive) was the first of the low-cost business operators to launch, starting flights in October 2005, and it raised $212 million from private equity groups and individual investors. Eos had begun to edge its way into the City’s favours and is thought to have been included on the preferred airline lists of a number of big institutions.

However, it still needed additional financing and approached its original investors seeking more money this month.

When that move failed, Eos approached rival airlines, including BA and Virgin to propose a takeover.

It found no interest.

Jack Williams, the chief executive of Eos, said: ‘there are times when even though you execute your business plan, external forces prevent you from controlling your own destiny’ ….

Profound words indeed as rising oil prices are causing havoc in the airline industry and Eos is the seventh carrier in two weeks to seek bankruptcy protection or go bust.

In that year – the first date efficiency was recorded by the Federal Government – the average Australian car used 11.4 litres of petrol to travel 100 kilometres.

In 2006, according to the ABS’s Survey of Motor Vehicle Use, it remained identical.

Why?

Essentially, modern vehicles are much bigger, heavier and faster than the vehicles of 1963. The 1963 EH Holden weighed around 1100 KGs. Its modern equivalent, the Commodore Omega, weighs 1700 kilograms. The extra mass is found in passenger crumple zones; airbags (the current Commodore has six of them); bigger wheels and tyres, which grip far, far better; big disc brakes on all four wheels, complete with anti-lock braking systems; chassis stability control; seat belt pre-tensioners; catalytic converters and other pollution control gear on the Commodore (the levels of lethal carbon monoxide, nitrogen oxides, and whatnot are a tiny fraction of what the EH emits). Power-assisted steering and brakes and automatic transmissions, which introduce another layer of inefficiency; air conditioning; six-speaker CD players; although electric windows may be seen as a added weight, the old manual window assemblies were heavier.

The VE Commodore and the EH Holden use pretty much the same amount of fuel, so while technology has become much, much more efficient over the past 45 years, we’ve chosen to use that improved technology to haul around bigger, heavier, faster cars with power-sapping environmental, safety, and convenience features. Mees and Blair, amusingly, seem to interpret the statistics in the same, incorrect way. Both seem to assume that because people have, historically, preferred to use the efficiency dividend from improved technology to drive a heavier car, that this trend will continue on forever, dooming us to a fleet fuel efficiency average of 11.4 liters per 100 kilometers travelled until the car is replaced by personal teleportation devices. Both are flat wrong.

The reason why people haven’t wanted more fuel-efficient cars is because fuel has, historically, represented a relatively small portion of people’s total expenditure. Where fuel is more expensive, people change their car-buying preferences, and car makers respond. Europeans drive small cars largely because they pay more for fuel than we do. The current fuel price surge is killing the market for large sedans. Every car maker in Australia is scrambling to offer a turbo diesel model, yet we import all our diesel fuel. We can reduce the amount of fuel our cars use, and by a very considerable amount. But the historical record is quite clear; it takes a hit to the hip pocket to do so, whether its via OPEC or, in the future, through a carbon tax. Technology alone won’t save us; fuel efficiency savings are squandered on more driving/performance/luxury.

Barney Foran accounts for this factor in all the CSIRO models and says the savings from government-imposed fuel efficiency should be taken by government and put in the Future Fund or something, rather than being given straight back to the motorist, who will only spend it. The Federal Government is certainly well advised on the problem. They never mention it, or do anything that indicates they think the problem is urgent.

Transport Secretary Ruth Kelly said: “The Government has consistently stressed that biofuels are only worth supporting if they deliver genuine environmental benefits.” She did not mention biofuels’ threat to rainforests, food self-sufficiency and global warming, through needing costly fertiliser and road transport.

Nor did she mention the role in her decision of such lobbies as the British Association for Biofuels and Oils, and the National Farmers Union. The RTFO is the latest in a series of policies, proselytised by the green movement and then commandeered by commercial lobbies, which fit a pattern of irrationality worthy of Moral Re-Armament.

Wherever one stands on the spectrum of climate complacency versus alarm, burning carbon should be discouraged. But as public money starts to flow, so financial interest pollutes debate. The British Government has been persuaded by the wind turbine manufacturers to commit a third of its annual renewables subsidy to this uniquely inefficient energy source, advertising over hill and dale the cabinet’s horror of making a decision on nuclear power.

When this was put to former prime minister Tony Blair by a Commons committee early in his second parliament, he replied jokily: “Would you want a nuclear plant in your constituency?” This appeared to be the sum total of his thinking on the topic.

Nuclear power may be expensive but as the former chief scientist, Sir David King, wrote recently, “the dangers of climate change are far worse”, obviously unaware that the energy consumed (emergy – embodied energy of making any given product) in making, running and decommissioning a nuclear plant is more than a plant will produce in its lifetime.

The same applies to genetically modified foods. It is clear that modification, which is as old as botany, has side-effects. But increased food productivity is so patently a good thing that to ban GM from European imports, and thus from Africa, is beyond perverse. Increased Indian and Chinese consumption is sucking the world dry of grain at just the time when the GM ban is denying the developing world the swiftest path to higher productivity – and at a time when supply is curbed by biofuel substitution.

These various green policies have established a lethal pincer movement on world food production. As Oxford economist Paul Collier points out in his book The Bottom Billion, Africa has been subjected by European governments to one form of “befuddled romanticism” after another, from campaigns against GM foods and low-wage produce to “save the peasant” farm reform. Africa, says Collier, has less commercial agriculture than it did at the end of the age of empire, half a century ago.

While antagonism to science merely impedes progress, antagonism to economics is regressive. American subsidies to ethanol fuel are not just causing “tortilla riots” but costing American taxpayers a staggering $5.5 billion a year. Biofuel tankers are circling the globe, burning gasoline and chasing subsidies. They have joined carbon emissions certificates among the world’s greatest trading scams.

Did those demanding fuel subsidies not realise that palm oil would wipe out rainforests and that ethanol from corn would use as much carbon as it saved? Did those pleading for wind farms really think they could ever substitute for nuclear power; or those wanting eco-towns not realise they would just add to car emissions?

Did they not understand that, once the tap of public money is turned on, lobbyists will ensure it is never turned off however harmful ? If all these fancy subsidies and market manipulations were withdrawn tomorrow and government action confined to energy-saving regulation, I am convinced the world would be a cheaper and a safer place, and the poor would not be threatened with starvation.

Just now, for reasons not all of which are “green”, commodity prices are soaring. Leave them. Send food parcels to the starving, but let demand evoke supply and stop curbing trade. The marketplace is never perfect, but in this matter it could not be worse than government action.

Playing these games has so far made a few people very rich at the cost of the taxpayer.

Now the cost is in famine and starvation.

This is no longer a game.

Source

Nobody has a long-term viable business plan that can be sustained at these jet-fuel prices,” said Darryl Jenkins, an airline consultant. “This is a killer category. We’re probably going to see some more casualties out there.” About 90 percent of airline routes probably aren’t profitable, Jenkins said. “What do you do in a situation like that?”

Jet Fuel has increased 62 percent in the past year, including a 3.7 percent rise to almost $3.20 per gallon this week, according to the International Air Transport Association, a trade group representing 240 airlines. The typical Airbus A319 flown by Skybus pilots carries 6,300 gallons of fuel. Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment,” the company said. “These two issues proved to be insurmountable for a new carrier.” Skybus operated a fleet of 11 Airbus jetliners and served 15 cities. The company will file for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware on April 7, Skybus spokesman Bob Tenenbaum said. This is a shutdown,” he said. “All of (the aircraft) will end up in the bankruptcy proceeding.” Passengers were urged to contact their credit-card companies to arrange for refunds for any flights scheduled after April 4.

Copying Ryanair; Skybus attempted to follow the lead of Ryanair Holdings Plc, Europe’s biggest discount airline which often gives away tickets while charging fees for baggage and selling merchandise and ad space in cabins. Skybus flight attendants charged for drinks and food onboard and sold products such as perfume. At the time of Skybus’s inaugural flights, Chief Executive Officer Bill Diffenderffer said he was “embarrassed” that the airline’s fares were as high as $10. Fares initially were expected to make up 85 percent of revenue. The carrier promised to sell at least 10 seats per flight for $10, with the remainder costing at least 50 percent below the market price, Diffenderffer said in May.

In the beginning, the company said it had raised more than $100 million in financing from investors, including 20 Columbus- area backers and firms such as Morgan Stanley, and had $57 million in state and city funding and incentives. Skybus in 2006 placed an order for 65 Airbus A319s, with a list price of $4.3 billion. The first four planes, which were to be delivered in late 2008, were financed through Singapore-based BOC Aviation, a subsidiary of the Bank of China, which agreed in November to finance 13 additional aircraft with a list price of more than $750 million. The second order was scheduled to be delivered in 2009 and 2010. There’s a tremendous demand for A319s,” said Airbus SAS spokesman Clay McConnell. “We are absolutely confident all these planes will find good homes.”