Airline companies warn of higher fares from green transition

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Airline passengers may soon have to pay more for flights as the industry tries to cut emissions to net zero by 2050, Reuters reports.

Airline passengers will have to pay the price as the industry moves towards its target of reducing emissions to net zero by 2050, the head of a global trade association said on Tuesday.

Willie Walsh, Director General of the International Air Transport Association, which includes most of the world’s major airlines, called for quicker action in Europe to drive up scarce production of greener Sustainable Aviation Fuel (SAF).

Airfares have already jumped this year as a result of higher prices for conventional fossil-based jet fuel.

The airline sector is considered one of the most difficult to decarbonize as fuel for flights cannot be easily replaced with other kinds of power.

Walsh said that the airline industry cannot be expected to make $1 profit per customer to absorb the increases. 

“Going forward as we see increases in carbon costs…there has to be an impact on ticket prices as the industry transitions to net zero. The airlines cannot absorb increased costs,” he said. 

Environmental groups argue that air higher travel costs will help to rein in emissions by curbing growth in traffic.

Walsh praised the new efforts being made by the U.S. to increase the output of clean fuels. This comes in apparent contrast with objections from the EU that the new U.S. incentives could create an uneven playing field. 

The Biden administration has launched a government challenge to supply at least 3 billion gallons of SAF per year by 2030.

The U.S. Inflation Reduction Act passed a few months ago includes significant subsidies to the SAF industry in the form of tax credits, but European industry leaders including the head of the plane maker Airbus have said the legislation is unfair.

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