European airlines say sustainable fuel targets may mean higher fares, consolidation

European airline chiefs said on Thursday the industry needs to make more money and may consolidate further to pay for sustainability targets, a trend likely to lead to higher fares for passengers on top of rising demand for air travel. The head of British Airways parent IAG told reporters at a CEO roundtable that there was a more than a 90% risk that the industry would not meet a European Union mandate for the availability of sustainable aviation fuel (SAF) in 2025. The European Union has adopted rules requiring flights departing from EU airports to carry a progressively increasing amount of SAF, starting with 2% of total fuel in 2025. Gallego said Europe's tougher rules, compared to other regions, risked making its fragmented industry less competitive, putting pressure on airlines to continue a recent wave of partnerships. "The problem we have in Europe is we have a small group or a small airline competing in a global war with mandates of sustainability that are ahead of others. We are not going to be competitive," Gallego said. "So we need to consolidate the industry, you know, in order to afford all these, for example, sustainability ambitions that we have. And that's the reason why we are trying to be bigger, more efficient, and to develop better platforms for our customers."<br/>