The transition is net zeros is going to be costly, take time and energy and will be complex, IATA chief Will Walsh told World Aviation Festival.
The director-general of the global aviation body told the annual event being held in Amsterdam this week that the industry is starting to realise how expensive decarbonising will be.
“The differential between the cost of SAF [Sustainable Aviation Fuel] and traditional kerosene is about $4.7 trillion,” he said.
On a rough calculation, based on today’s numbers, Walsh calculated that the transition will cost £174 billion a year to the net zero target date of 2050.
This could take fuel’s proportion of the industry’s cost vase to 42%, something “never seen before” in a sector that will make a net profit this year of $30 billion.
“There’s no way the industry can absorb this cost,” said Walsh. “It’s absolutely clear the consumer is going to have to pay. There’s absolutely no other way.”
Fares would have to rise by 17% if the industry is to recover all the cost of decarbonising through prices, Walsh added.
“This transition is frightening. It’s causing people to stand back and say how are we going to do this. There’s no other option than SAF at this stage.”
Walsh said hydrogen will play its part but he said the current fleet of aircraft coming in stream are developed to operate on liquid fuels, so SAF has to be the main alternative fuel.
He criticised the approach in Europe, and in particular France, which is using a stick approach to force the use of SAF and said the US model to incentivise production us right.
“It’s time limited, but it is having a big impact. Europe says you have to use SAF, the big stick. All that’s doing is driving up the cost for the industry.”
Walsh said in France the monopoly supplier of aviation fuel “could not give a shit” about the 1% SAF mandate and simply asses on the fines in higher costs to its customers.
“You are getting zero environmental benefit and the penalties are just being passed on to the airlines which are just being passed in to the consumer.
“If the challenge is net zero by 2050 and our industry is aligned with the global political environment then governments are going to have to play their part to incentivise the production of SAF in exactly the same way as they have with solar and wind.”
Walsh said countries like Singapore, Morrocco and India are trying to work out ways to decarbonise while supporting their travel and tourism sectors on which their economies and highly reliant.
“I find the debate in Europe to be quite artificial, quite arrogant. There’s a sense of lecturing the world about what they should do based on what’s possible in Europe but it’s not possible in other parts of the world.
“More government are recognising that SAF is the big opportunity for them. It generates jobs, economic growth and helps to decarbonise a critical industry too.”
Walsh said the good news for the sector is that demand us rising across the board, not just for low cost flying but for more premium seats which us the fastest growing area.