Airfares are set to continue rising as airlines switch to sustainable aviation fuel, the industry’s foremost economist has said.
Marie Owens Thomsen told airline executives this week that it would be “many years” before the transition biofuels was not “an excessive cost burden on carriers”.
She told the International Air Transport Association’s annual summit in Istanbul that the cost of sustainable aviation fuel – up to four times higher than the price of jet fuel - would need to be passed on to travellers.
“To be a robust business, everybody needs to cover their costs,” she said.
“Airlines will have to find a way to cover their costs, or they will start making losses again, which is not in the interests of anybody.”
Thomsen, chief economist at the International Air Transport Association, predicted costs would continue to rise until at least 2040.
The airline industry has committed to be net-zero by 2050.
Qantas sustainability CEO Andrew Parker said the Australian airline was developing a “user pays” approach to biofuels.
Fliers would be encouraged to voluntarily contribute to the costs in the same way that they are currently asked to pay carbon offsets when booking flights online.
But he said fewer than 10 per cent of travellers were currently electing to tick the carbon offset box when confirming their travel.
“Many airlines are trying to solve this conundrum of the green premium, so we’re investing, we need government support, but we want consumers largely to be participating with us as well,” he said