The costs associated with transitioning to greener Sustainable Aviation Fuel (SAF) could put many airlines out of business, if Government funding aid is not included, the chief economist of global aviation representative group, the International Air Transport Association (IATA) has said.
Marie Owens-Thomsen told last week’s Airlines 24 industry conference in London that the huge jump in costs associated with switching from traditional jet fuel to SAF means a realistic transition can only come about if outside investment aid is forthcoming.
Ms Owens Thomsen told delegates: “SAF today costs around three times the price of jet fuel. We’ll pay $1 billion extra in 2025 and the costs [of SAF] will go up to $750 billion in 2050. That is not possible.
“Fares have not kept pace with consumer price inflation and have struggled even more to keep pace with jet fuel inflation.
“So, we need strong policy to encourage investment [in SAF] or there will be no airlines.
“It’s a nascent market and needs a lot of help. It needs to grow up really fast. We need to increase production by a factor of one thousand.”
She said SAF production calls for 70 international refineries to be fully producing by 2030, 650 to be producing by 2040 and between 4,000 and 8,000 to be up and running by2050. The total investment needed – $2tn-$3tn – is equivalent to the establishment of a strong global wind and solar energy sector.
The 1 million tonnes of SAF due to be produced this year doesn’t even cover 1% of the global demand, she said.
“Are we going to ship SAF over large distances? We need to work for a global SAF market, and that needs a SAF registry which we’ll try to bring forward with the International Civil Aviation Organisation [ICAO] next year,” she said.
