Airlines can eliminate up to 70% of emissions by 2050, but many will miss their net zero goals if air traffic continues to grow faster than GDP
New research from Bain & Company shows the cost of decarbonizing airlines will start increasing ticket prices by 2026, a trend likely to trim global demand
As a result, airlines seeking to fund their net zero transitions will start increasing ticket prices by 2026, Bain & Company predicts, reducing forecasted global demand by 3.5% by 2030. These are among the findings of Bain & Company's study, "A Realistic Path to Net-Zero Emissions for Commercial Aviation," released today.
"As air traffic continues to grow, airlines are under increasing pressure to reduce emissions in service of their 2050 net zero goals," said
Best bets for 2050
Bain's research shows airlines can reduce CO₂ emissions by 43% through fuel efficiencies with current aircraft renewal cycles and operational improvements. A new generation of evolutionary engines and aircraft-frame design improvements would deliver 80% of these efficiency gains. Continued efforts to optimize flight and ground operations would deliver the rest. For additional improvement, airlines would need to drastically accelerate fleet renewal cycles. But an industrywide move to replace fleets ahead of schedule is unlikely given the business case for amortizing the full value of investments in aircraft. Incorporating SAF on a wider scale could reduce CO₂ emissions by up to 23%.
The high cost of SAF
Bain & Company's analysis shows SAF prices in 2050 will remain two to four times higher than the average historical price of Jet A fuel, the most commonly used aviation fuel, over the past decade. To meet its 2050 goals, the industry will need to invest up to
The research reveals that with current policies, total SAF supply will be limited to
Solutions likely to fall short
There's no single solution for decarbonizing commercial aviation by 2050. All technologies that can contribute to the net-zero goal face challenges, but two are specifically likely to fall short of expectations by 2050.
- Hydrogen and full-electric propulsion. Bain's analysis shows hydrogen and full-electric propulsion are likely to reduce less than 5% of 2050 aviation emissions. Neither will mature fast enough to replace a substantial portion of the existing fleets in the next 30 years. And the first hydrogen and full-electric aircraft will face significant economic and technological obstacles. In the case of full-electric propulsion, battery densities are unlikely to evolve fast enough to power narrow-body or wide-body jets.
- Carbon offsets. Airlines can theoretically compensate for residual emissions by purchasing carbon credits to make up for greenhouse gasses. But offsets won't help the industry reach carbon neutrality. Recent questions about offset accounting methods have undercut its viability as a solution, and several airlines are moving away from offsets.
A path ahead
Leading aviation companies can prepare for a disruptive decade ahead by taking a few important steps.
- Develop a strategy to secure an affordable supply of SAF. That may include investing in fuel production (buy, build, or partner) and advocating for fair regulation or subsidies for SAFs.
- Rethink fleet-renewal plans, considering the cost of decarbonization and changes in competitive dynamics, including different regional mandates for SAF.
- Mitigate the rise in operating costs. Review fleet-renewal cycles, increase cabin density, adjust fleet usage and seat count, and review network plans.
Editor's Note: For more information or interview requests please contact
About Bain & Company
Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future.
Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than
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SOURCE Bain & Company
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