Transition to net-zero will bring end of affordable air travel, aviation official warns

Top airline industry executives met this week and said that going net zero for carbon would end up costing customers.

DUBAI, United Arab Emirates – Get ready to pay more for airline tickets, warns an aviation trade group. The net-zero goal by 2050 for the industry, lack of technology and jet manufacturer slowdowns are creating the perfect storm for price turbulence.

"I'm sorry to say, but the transition to net-zero will require customers to pay," Willie Walsh, Director General for the International Air Transport Association (IATA) said during their annual meeting. "Ultimately, costs will increase, and those costs will have to be recovered. And that, in all probability, will lead to an increase in the cost of air travel. I just don't see how we can do it any different way."

The airline industry pledged to be net-zero in terms of producing greenhouse carbon dioxide emissions by 2050. Some airlines, like Alaska Airlines, imposed a 2040 deadline on themselves.  But at this time, experts say refineries aren't pumping out enough sustainable aviation fuel (SAF) and it comes with a price tag three to four times higher than conventional jet fuel.

And, the International Council on Clean Transportation estimated the goal would cost up to $5 trillion in fuel and aircraft investments.


Why net-zero by 2050?

The United Nations is among many energetic supporters of net-zero 2050.

"The science shows clearly that in order to avert the worst impacts of climate change and preserve a livable planet, global temperature increase needs to be limited to 1.5°C above pre-industrial levels. Currently, the Earth is already about 1.1°C warmer than it was in the late 1800s, and emissions continue to rise," wrote the U.N.'s Net Zero Coalition.  "To keep global warming to no more than 1.5°C emissions need to be reduced by 45% by 2030 and reach net-zero by 2050."

Aviation produced 2.4% of all carbon dioxide emissions in 2018 and 3% of the nation's greenhouse gas production, wrote the Environmental and Energy Study Institute. But, the industry has been responsible for about 4% of anthropogenic global warming to date, according to research in Environmental Research. The same study found that aviation's role in warming could be halted by an annual 2.3% decrease in air travel or transitioning to a 90% carbon-neutral fuel mix by 2050.


‘It's amazing that ticket prices are where they are today’

With a profit margin of 3.1%, airlines can't afford to absorb the costs, Walsh said. IATA said that airline profits average out to $6.14 on every passenger. Walsh pointed to Starbucks with an 11% profit margin. That means relatively affordable airline ticket prices will be a thing of the past, soon, suggested Walsh.

"This industry works extremely hard to be as efficient as possible. It's cheaper to fly now than it was to fly 10 years ago. If you look at inflation figures…, you know, ticket prices going back to 2018, 2019 have broadly kept pace with consumer inflation," Walsh said. "And that's despite the fact that the inflation that airlines have experienced is much higher than consumer inflation because of what's happened with the price of jet fuel.

"I think it's unrealistic to expect that airlines can continue to absorb all of the costs," he continued.


IATA estimates that 31% of an airline's costs will go to fuel in 2024. Emirate Airlines President Tim Clark said costs in Africa are closer to 40%. 

"It is quite amazing that ticket prices are where they are today," he said.

He adds airlines can not achieve net-zero alone.

Policy makers need to step in, suggests IATA

"The governments have got to be stronger about how they do this, recognizing the difficulty of getting it done and scaling that down until we get to the point where you can actually introduce some kind of science to produce green hydrogen, and even that requires huge amounts of power," Clark said.

Walsh pointed to what he says is an ineffective French mandate for fuel companies to deliver an SAF blend fuel.

"If they don’t achieve, fuel companies are penalized," Walsh said. "But you’re penalizing a monopoly who just passes that cost onto the airline industry, (with) zero environmental benefit and huge economic damage."


Clark said multinational corporations will need incentives to build or convert refineries for SAF. And, he said, that has its own carbon footprint issues.

"But if we can cross that river in the 2030s and 2040s, then you can start seeing the costs falling per liter of fuel. But at the moment we've got a long journey ahead, and it's difficult, and it'll be expensive," Clark continued. "But our main goal is to try and get the amount of SAF into the aviation industry at the levels that everybody wants. The consumers want, the governments want. And that's not an easy task."

An Alaska Airlines spokesperson told FOX 13 last year, "The technology to get us to that destination does not exist today at the size, or scale, or even certified in operation at the level we need to reach those goals."


Jet manufacturing issues compound the issue. Clark said the issues have "hamstrung" growth. Walsh said that there is nothing that any individual airline can do.

"It's the cause of quite a lot of frustration. Many airlines see opportunities to expand their network, want to provide services to new destinations and can't because they can't get delivery of new aircraft," Walsh said.

"It's also caused some airlines to keep in service aircraft that they had planned to retire, and in some cases, to bring back into service aircraft that they had announced that they were retiring, putting into storage all of this adding cost," he continued. "It's not helping our journey to net-zero, because clearly part of that journey is investment in new technology aircraft that are much more fuel efficient."