As airline ticket prices rise to reflect higher jet fuel costs, the aviation industry is responding. Actually, the industry has been re-engineering and innovating for years. As I blogged a few days ago, planemakers are doing very well these days and have a years-long backlog of orders. Boeing reports strong demand for its new, more fuel-efficient airplanes, which can be as much as 40 percent cheaper to operate. In addition, the Economist reports the helicopter industry is developing diesel-powered engines in an effort to help cuts operating costs.

Aviation innovation is being pushed along not just by airlines, but also by owners of private jets. Even NASCAR drivers, many of whom now own airplanes and helicopters, are grousing over the cost of fuel. The AP has reported that drivers Jeff Burton and Carl Edwards have cut back on the use of aircraft because of the cost, and owner Richard Childress had some folks drive to the Bristol race rather than fly.

This story — the demand for greater fuel efficiency — is a great example of how the market works: customers create a need by demanding a product or service, and industry fills the need through technology, innovation, and creativity.