Feb. 24 (Bloomberg) -- Virgin Atlantic Airways Ltd., the U.K. carrier controlled by billionaire Richard Branson, tested a jumbo jet partly powered by a biofuel made from babassu nuts and coconut oil, a first for a commercial aircraft.

The Boeing Co. 747-400, which took off from London and landed at Amsterdam, had one unmodified engine running on a mixture of about 25 percent biofuel and the rest standard jet kerosene, Branson said today at a Heathrow airport news conference.

``This pioneering flight will enable those of us who are serious about reducing our carbon emissions to go on developing the fuels of the future, fuels which will power our aircraft in the years ahead through sustainable next-generation oils, such as algae,'' he said.

The flight, without passengers, is part of a joint project between the London-based airline, Boeing and enginemaker General Electric Co. Airlines and aircraft makers are racing to develop a viable alternative to jet fuel as the price of oil rises and aviation is increasingly blamed for contributing to global warming.

``Two years ago, people said that was impossible. They said it would freeze at 30,000 feet,'' Branson said in an interview. Today's test was ``purely'' to prove biofuel will work on commercial aircraft, he said.

Branson said he views algae-derived fuel as the most promising because it can be produced in large quantities without harming the environment. The fuel source used today isn't plentiful enough to be a major resource for the airline industry he said.

`Sustainable'

``We've really got to move towards something sustainable,'' he said. Air New Zealand Ltd., the country's biggest carrier, will operate a test flight using algae in four months time, according to Branson.

The world's biggest planemaker, Toulouse, France-based Airbus SAS, tested gas-to-liquid fuel earlier this month on a superjumbo A380 in conjunction with Rolls-Royce Plc.

The information gleaned from today's test flight will be evaluated by Virgin, Boeing and GE. After the flight, Chicago- based Boeing will ask other carriers to do tests, which may lead to biofuel-powered commercial flights within five years, according to Billy Glover, Virgin's environment director.

Amazon Rainforest

Virgin and GE tested a number of different biofuels produced by Seattle-based Imperium Renewables Inc. before choosing coconut and babassu because they were suitable in initial tests and won't compete with staple food supplies or cause deforestation, the airline said. Babassu nuts are harvested from palms by local workers from the Amazonian rainforest.

``Biofuels are not a panacea, there are a whole load of issues,'' said John Strickland, director of London-based aviation specialist JLS Consulting. ``Some have the issue of substituting food crops and they don't necessarily produce enough, in terms of volume, to replace kerosene.''

Today's flight was approved by the U.K.'s Civil Aviation Authority. The plane used the biofuel in only one engine, with a separate tank. The aircraft will now go into maintenance and the engine will be examined.

The plane landed at Amsterdam Schiphol airport after reaching a planned maximum altitude of 25,000 feet, Virgin said today. No other details about the flight were released.

Fuel accounts for 30 to 50 percent of airlines' operating costs, and aviation contributes about 2 percent of global carbon dioxide emissions. That's expected to rise to 3 percent by 2050, according to the Intergovernmental Panel on Climate Change.

``I'm highly skeptical because the industry will see this as an unsustainable idea,'' said Howard Wheeldon, an analyst at BGC Partners in London. ``This is taking up land that was previously used for food, food is in short supply. So nice idea Virgin but I'm afraid this isn't the way forward.''

To contact the reporter on this story: Tracy Alloway in London at talloway@bloomberg.net

Last Updated: February 24, 2008 10:09 EST