Net zero mandates could make airfares too expensive for most: Qantas boss

Net zero mandates could make flying “something for the privileged”, the boss of Australia’s biggest airline has warned.

Qantas chief executive Vanessa Hudson said the higher costs associated with clean fuel were likely to push up airfares and could put them out of reach of the masses.

Qantas chief Vanessa Hudson says flying green will come at a cost. Credit: Eamon Gallagher

Her warning came as the boss of Airbus, Guillaume Faury, said net zero would add a “green premium” to plane tickets and reverse the decades-long trend of flying getting cheaper over time.

Faury said the price of sustainable aviation fuel (SAF), which is regarded as key to slashing aviation’s carbon footprint, may never match traditional kerosene.

“Is it going to be as cheap as jet fuel? I don’t think so. I think there will be a price to pay for decarbonised fuels,” he said.

The public will feel the squeeze through a “green premium” as airlines are compelled to use an ever-increasing proportion of SAF over the coming decades, he added.

Britain has issued a mandate for carriers to use at least 10 per cent SAF by 2030, one of the most stringent requirements in the world. The EU target by the same year is 6 per cent. In Australia, Qantas is aiming to use 10 per cent SAF by 2030, and around 60 per cent by 2050.

“Increasing the percentage of SAF will raise pricing,” Faury says. “What we have seen with pricing going down very significantly is not necessarily what we will see from the future.”

Airlines may be able to absorb some of the costs of SAF, with relatively modest increases in ticket prices following sharp fluctuations in the price of oil.

However, Qantas’ Hudson warned that flying could become “so expensive that it’s something for the privileged”. While price rises may be necessary, “there’s a big difference between five times and 1.5 times,” she said, pointing to the uncertainty around fuel costs. Qantas has a joint venture with Airbus on SAF production.

SAF currently costs three to five times as much as kerosene but is seen as the only realistic route to achieving the aviation industry’s target of net zero carbon emissions by 2050.

The high price and low production volumes mean the fuel last year made up less than 1 per cent of industry-wide fuel consumption.

However, governments around the world are betting on a sharp increase in production and usage of the fuel to meet net zero goals. SAF, which is most commonly derived from used cooking oil sourced from Asia, can reduce the so-called life-cycle CO2 emissions by around 80 per cent compared with traditional jet fuel.

Faury admitted that the aviation industry may struggle to deliver on its goal of reaching net zero by 2050, saying that “maybe it’s going to take a bit more time.”

He delivered the warning as Airbus unveiled a blueprint for a new generation of narrow-body planes capable of running off 100 per cent SAF.

Current plans for the aircraft, to be introduced some time after 2035, feature composite wings that are much longer and narrower than existing models. The supersized wings create more lift, reduce drag and lower fuel burn. However, their length means the wings need to fold to use existing airport gates.

Airbus also confirmed that it had shelved studies for a jet engine-powered plane that would burn hydrogen instead of kerosene.

Separately on Tuesday, Qantas confirmed it planned to start running direct flights from Sydney to New York and London by 2027. The ultra-long-haul flights will last up to 19 hours and will rely on a new generation of Airbus plane, the A350-1000, to be delivered at the end of next year.

The Telegraph, UK

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