The rising oil price makes development of alternative aviation fuels essential even without the need to tackle global warming.

Virgin group chairman and president of Virgin Atlantic Sir Richard Branson warned: “Five to six years from now we could see fuel prices at $150-$200 a barrel. There is likely to be more demand for oil than there is supply.

“The price is out of control and the effect on the global economy could be devastating. “

Speaking in New York as the oil price rose to a record high of $103 a barrel, Branson called on rival carriers to follow Virgin Atlantic’s lead.

The airline carried out a successful trial of a biofuel on a flight between Heathrow and Amsterdam last week.

Branson said: “We became the first airline in the world to fly using biofuel, proving aircraft can fly on it without modification to the engines. We spoke about developing biofuels with other airlines two years ago and everyone was skeptical. Last week, we showed it can be done.

“Now we will move rapidly to deliver an algae-based fuel, which we believe will be the fuel of the future.
We invite other airlines to join us.”

He revealed: “Our Virgin fuels company is talking to sewage plants about building algae-producing facilities.”