Jet fuel bottleneck

WASHINGTON -- Lost luggage, bad weather, and now . . . no fuel?

While fliers haven't yet had to add that problem to the list of headaches associated with air travel, it may not be far away. Airports in Arizona, California, Florida, and Nevada recently came within a few days -- and at times within hours -- of running out of jet fuel.

Because of supply problems, airlines were forced to fly in extra fuel from other markets and scramble for deliveries by truck. But these are expensive, short-term fixes that do not address what airline executives consider to be the underlying problem: with passenger traffic rising above pre-9/11 levels, the nation's aviation business is slowly outgrowing the infrastructure that fuels it.

What started as routine supply tightness in these markets quickly snowballed following disruptive events that included a hurricane, a canceled fuel shipment and, ironically, the airlines' own efforts to prevent shortages, according to several airline executives.

Late July and early August were ''unprecedented for Southwest for the number of cities where we've had to manage supply problems," said Glenn Hipp, director of fuel purchasing and inventory management for Southwest Airlines Co. AMR Corp.'s American Airlines, UAL Corp.'s United Airlines, and America West Holdings Corp., also said there has been recent supply trouble.

These airlines have not canceled flights or made extra stops to tank up, nor have planes flown with less than the minimum fuel required by the Federal Aviation Administration, executives said.

But the near shortages underscore the added strain on refineries, pipelines, and the airlines' own fuel-procurement efforts as the industry recovers from its worst-ever downturn -- June passenger traffic was up 4 percent from 2001 -- and as energy demand rises worldwide.

Part of the problem is that refining and pipeline capacity in some regions of the United States have grown slower than demand, meaning companies must run their equipment harder to satisfy growing fuel needs. This raises the chances of operational snags and leaves less of a cushion when something does go wrong.

Also, the petroleum industry has reduced fuel inventories in recent decades, redirecting funds once spent on storage to oil drilling. Thus, some of the burden of storing surplus fuel has shifted to the airlines. But the industry's financial woes have hindered its ability, or willingness, to increase spending on storage, according to John Armbrust, publisher of Jet Fuel Report, an industry newsletter.