IATA Director-General Will Walsh told the World Aviation Festival that the transition to net zero will be expensive, time-consuming, energy-consuming and complex.
The director-general of the World Aviation Organization said at its annual event in Amsterdam this week that the industry is starting to realize how expensive decarbonization will be.
“The cost difference between SAF (sustainable aviation fuel) and conventional kerosene is about $4.7 trillion,” he said.
Using rough calculations based on today’s figures, Mr Walsh calculated that the transition would cost £174bn a year by the net zero target date of 2050.
This could push fuel as a share of the industry’s costs to 42%, an “unprecedented” level in a sector expected to generate $30 billion in net income this year.
“There’s no way the industry can absorb this cost,” Walsh said. “It’s clear that consumers have to pay. There is absolutely no other way.”
For the industry to recover the full cost of decarbonization in prices, freight rates would need to increase by 17%, Walsh added.
“The changes are frightening. It’s made people stop and say, how are we going to do this? There is no other option than SAF at this stage.”
Mr Walsh said hydrogen would play a role, but since aircraft currently in service have been developed to operate on liquid fuel, SAF would have to be the primary alternative fuel.
He criticized the approach of Europe, particularly France, which he said was taking a stick-and-gun approach to forcing the use of SAFs, and said the US model of encouraging production was correct.
“Time is limited, but the impact is big. Europe is saying we need to use SAF, the big stick. All that stuff is driving up costs for the industry.”
Mr Walsh said that in France, the monopoly supplier of aviation fuel “didn’t care” about the 1% SAF mandate, only imposing fines at higher costs for customers.
“The environmental benefits are zero, the fines are passed on to the airlines, and the fines are simply passed on to the consumers.
“If the challenges are virtually zero by 2050 and our industry is aligned with the global political environment, governments should have a role in encouraging the production of SAF in exactly the same way as solar and wind power. You will need to fulfill it.”
Mr Walsh said countries such as Singapore, Morocco and India are looking for ways to decarbonise while supporting the travel and tourism sectors on which their economies rely heavily.
“I think the debate in Europe is quite artificial and very arrogant. There is a sense that we are preaching to the world about what to do based on what is possible in Europe but not in other parts of the world. There is.
“More governments are recognizing that SAF is a huge opportunity for them. It will create jobs and economic growth, and also help decarbonise key industries.”
Mr Walsh said the good news for the airline industry was an overall increase in demand for more premium seats, which is the fastest growing area, not just for low-cost flights.