Volatility of fuel prices is still an issue with the crude oil taking the highs of around $150 per barrel to the current lows of $42 per barrel. The scare of very expensive oil has caused airlines about alternative fuel and hopefully with current lows, the effort will not fade.

On January 7th 2009, Continental Airlines will test the use of a biofuel blend (derived from Algae and jatropha plants) on a Boeing 737-800 with nobody on board except for the test pilots. The test pilots “plan to run one engine on the biofuel blend and take it through power
accelerations and slowdowns, in-flight engine shutdown and restart and
other maneuvers. The airline said it expected a post-flight analysis
would show that the lower-emission biofuel plan can substitute for
regular fuel without loss of performance or safety.“

The test is in partnership with airplane manufacturer Boeing, airplance engine
maker GE, Snecma, Honeywell technology and oil producers Sapphire
Energy and Terrasol.

From MSNBC –

An average Continental flight burns 18 gallons of fuel to fly one passenger 1,000 miles.
Alternative fuels for aircraft have been studied for years, but the
push got new urgency this year when jet-fuel prices hit record highs in
July. Fuel is one of the largest expenses for an airline.
Some fuels such as hydrogen lack the acceleration of traditional
kerosene-based jet fuel and would require planes be outfitted with
massive fuel tanks.
Airlines in South Africa use a coal-based fuel blend developed by
petrochemicals group Sasol that doesn’t require altering aircraft
engines or other parts. Air New Zealand is testing jatropha fuel in a
747 jetliner.