Jet fuel shift to reserves to impact Port Everglades?

southflorida.bizjournals.com 10:00 EST Monday  Robin Londner  

Officials of the Air Transport Association have asked the federal government for access to the nation's strategic fuel reserves to control rising jet fuel prices, according to media reports.

Fuel is the second-largest expense after labor for most airlines. The cost has risen nearly 30 percent, to almost 90 cents a gallon, in the last three months.

In a Friday Reuters report, officials from ATA, a lobbying group that represents most domestic airlines, said it is forming a plan to present to Congress and the Bush administration for easing cost pressures caused by taxes and rising fuel costs. While the airlines said they have yet to agree on what, specifically, to ask for, Reuters said carriers have already informally asked the government to give them access to the nation's strategic petroleum reserves. The newswire said the airlines made the request "to mitigate an expected spike in jet fuel prices in the event of an Iraqi conflict."

Among other options outlined by Reuters, the carriers could ask the government to lift aviation security taxes and fees imposed since Sept. 11, 2001, or to temporarily relax anti-trust laws.

A change in the way airlines receive fuel could impact Port Everglades. The Broward County port is the second-largest East Coast non-refinery center for petroleum products. As the primary port in southeast Florida handling petroleum, Port Everglades distributes products to 12 surrounding counties from as far north as Vero Beach, south to Key West, and across to Florida's west coast. Port Everglades also provides all the jet fuel requirements of Miami International, Palm Beach International and Fort Lauderdale-Hollywood International airports and Homestead Air Force Base.

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The majority of the port's petroleum arrives from refineries in the Gulf of Mexico along with Venezuela, Aruba, the Bahamas and Mexico. More than 1,000 petroleum tanker-trucks leave the port every day.

In fiscal year 2001, the port processed 117.9 million barrels of fuel, or 16.77 million tons.

A phone message left for a Port Everglades spokeswoman was not immediately returned.

American, United, Delta, Northwest and Continental airlines all cited jet fuel prices as a significant cost item in their fourth quarters earnings reports, with the total cost about 10 percent higher than the same quarter last year. If airlines can buy fuel from the country's strategic fuel reserve, the thinking is other suppliers would have to reconsider raising their prices.

Financial analysts have estimated the major U.S. carriers lost from $8 billion to $10 billion last year, the year both United Airlines and US Airways filed for Chapter 11 protection. The industry has warned a war with Iraq could push more airlines into bankruptcy.

So far, Congress has told the airlines to take more measures to help themselves before expecting the government to step in with significant aid.