“Flying is going to be more expensive,” a top executive said
Another European airline is bracing customers for more expensive flights as the industry faces pressure to reduce its greenhouse gas emissions. Luis Gallego, CEO of the International Airlines Group, told the Financial Times on Thursday that cheap fares are part of the sacrifice to reducing aviation’s carbon output.
“Flying is going to be more expensive,” he told the paper. “That is an issue, we are trying to improve efficiency to mitigate that, but it will have an impact on demand.” He did not lay out any explicit changes that would be coming in the near term.
International Airlines Group is the parent company for British Airways and Irish carrier Aer Lingus, among a few others.
The airline industry is responsible for 1 in every 30 to 50 tons of carbon released into the atmosphere every year, and the European Union is trying to reduce that contribution through regulation. Beginning next year, cleaner-burning aviation fuel at European airports has to be at least 2% sustainable aviation fuel (SAF). That portion has to be 6% by 2030, 20% by 2035, and will reach 70% by 2050. Despite prices falling fast enough to make Shell $SHEL pause construction on a biofuels plant, SAF is still much more expensive than traditional jet fuel.
“We agree with decarbonisation…but I think we need to do it in a consistent way worldwide not to jeopardise European aviation,” Gallego told the FT.
Last month, German airline Lufthansa said that it would soon be tacking on a fee of up to $77 to each ticket departing the European Union in order to help pay for things like cleaner-burning jet fuel and infrastructure for regulatory compliance. At the annual meeting of the International Air Transport Association earlier this summer, general director Willie Walsh stated plainly that airlines were not going to take on the costs all by themselves.
“I’m sorry to say but the transition to net zero will require customers to pay,” he said, adding that “the costs can’t be borne by the industry given the wafer thin margins we have.”
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