Airline tickets will be nearly 20% more expensive by 2050 due to SAF commitments: report

Airline ticket prices will need to be 18% higher in 2050 if the aviation industry is to afford the trillions of dollars it will cost to meet sustainable aviation fuel (SAF) targets and meet decarbonisation goals, according to a new report. Published by LEK Consulting, the research paper – Fuelling the Future of Aviation: Making Sustainable Aviation Fuel a Reality – identifies SAF as the “critical lever” for decarbonising aviation in the period to 2050 and beyond. However, for the sector to achieve its SAF penetration target of 65% by 2050 it will require global production capacity of more than 400m tonnes per annum, a huge increase on the sub-1m tonnes available today. That will only be enabled though the use of more expensive production solutions such as power-to-liquid fuel, the report argues, contributing to SAF remaining around twice the price of standard jet fuel, despite cost decreases associated with volumes of scale. As a result, hitting the 65% target will cost “$3.5-5.5t in excess of a kerosene-only future”, the study suggests. Total spend on kerosene in that scenario would be $8-9t to 2050, it says. If these costs are passed through to customers, ticket prices will need to rise by 18% by 2050, against a jet fuel-only baseline, it adds. “Whilst this is a significant quantum, this cost must be seen in the context of the overall cost of delivering a net-zero future, which has been variously estimated as c.$130-140t over the period 2022 to 2050.” In fact, the SAF cost is just 2-4% of the estimated cumulative investment required to achieve net-zero, the report notes. Provided there is a willingness by customers to pay “and if competitors can operate on a level playing field”, passenger demand in volume terms will only be around 7% lower by 2050. That implies a growth rate of 3-4% per annum – “only c.0.3% p.a. lower than in a no-SAF world.” Story has more.<br/>