IAG warns of higher airfares to fund carbon emission reductions
Sustainability Economics
E2E AUTOMATION AND LIFECYCLE MANAGEMENT OF NET-ZERO TRANSITIONS
International Airlines Group (IAG), owner of British Airways, said that airlines in Europe will be forced to raise fares to fund the cost of cutting carbon emissions.
Company chief Luis Gallego said in an interview with the Financial Times that switching to cleaner, more expensive sustainable fuel would “have a big impact” on the industry and might impact passenger demand.
“Flying is going to be more expensive. That is an issue, we are trying to improve efficiency to mitigate that, but it will have an impact on demand,” he said.
Gallego added that European airlines might become less competitive due to the bloc’s stringent Net-Zero targets, which mandate that 6% of jet fuel must come from sustainable sources by 2030.
He said, “We agree with decarbonisation, but I think we need to do it in a consistent way worldwide not to jeopardise European aviation.”
Sustainable aviation fuel (SAF) is produced from various non-fossil fuel sources, such as waste cooking oil and crops. Compared to traditional jet fuel, it can reduce carbon dioxide emissions by up to 70%.