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Flying green will be more expensive

Patrick Pouyanne, the head of oil and gas giant TotalEnergies, which is producing SAF, warned earlier this year that the cost of these non-conventional fuels were far from matching less expensive conventional ones.

“The energy and ecological transition will have to be financed not only by airlines or energy companies, but also by the whole chain, including customers,” he said.

Djebbari added that flight prices could rise “in the short term.”

He warned that the pandemic could also see many airlines disappear, thus reducing competition and pushing prices up.

DROWNING IN DEBT

Higher prices would mark a big change for a sector that was once the preserve of the rich but gradually became accessible to more people, even if it still excludes up to 95 per cent of the global population.

In 1970, 310 million air trips were taken, according to the World Bank.

In 2019, that figure stood at 4.4 billion.

And despite the pandemic, IATA is banking on the figure rising to 10 billion in 2050.

IATA says the cost of air transport has plunged by 96 per cent since 1950 thanks to the introduction of jets in the 1960s, which led to dramatic industry growth, and the 1978 deregulation of the sector in the United States.

It adds that this “downward trend continues due to improved technology and efficiency as well as strong competition”.

Right now, flight prices are also being pushed down in many regions as demand for air travel only timidly recovers from the shock of the COVID-19 pandemic.

Airlines are not in good posture, drowning in debt and struggling to get cash flowing again.

So how are they going to finance a green transition that cannot be delayed as the world faces the catastrophic effects of climate change?

“It’s clear that sustainability and our industry’s ability to meet the targets that are being set is the biggest single challenge that we face,” Pauls Calitis, chief operating officer of Latvia’s low-cost airBaltic airline, said at a recent symposium in Brussels.

With airlines financially fragile, the “money is going to have to come from someone”, said Bertrand Mouly-Aigrot, a partner at Archery Strategy Consulting which specialises in the aerospace and energy industries, at a recent event.

Making the customer pay “might not be a bad idea,” he added.

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