‘Transitioning to net zero will push up ticket prices and dent demand’
The move to net zero will result in higher airline ticket prices and likely lead to lower demand for air travel, said Willie Walsh, Director General of the International Air…
The move to net zero will result in higher airline ticket prices and likely lead to lower demand for air travel, said Willie Walsh, Director General of the International Air Transport Association, at the Sustainable Skies World Summit 2023.
Speaking to FINN, he said the exact impact of the push towards sustainable aviation fuel and ultimately alternative propulsion technologies was uncertain, but would undoubtedly come with higher costs for operators and travellers.
‘There will be a cost’
“It is very difficult to quantify it at this stage,” he said. “But … there will be a cost and that cost will have to be reflected in ticket prices.
“Anybody who says that, you know, the cost of transitioning to net zero is small or negligible. I’m sorry, but they are deluded. If you look at it today, sustainable aviation fuel costs at least twice what traditional jet fuel-kerosene costs. It’s been in the range of two to three times in recent times.
“There’s no way airlines given the weak financial balance sheets can absorb that cost. So it will be reflected in ticket prices. That probably will have an impact on demand. But it’s impossible to calculate at this point what that is going to be.”
‘This is an industry that can adapt’
He added: “The move to net zero is an absolute must for the industry. There’s no question the industry is committed to doing that. I think the pathway to getting there, you know, has not been fully defined at this stage. And I think there will be many different ways we can get there. But I’m very confident that people will still want to fly.
“This is an industry that can adapt to changing prices. There is a perfect correlation between fuel prices and ticket prices. And therefore when fuel prices go up, ticket prices go up.”
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