The State of Sustainable Aviation: Facts, trends, and leaders

Transcript

David Wills:Good morning, everyone. Um, in 2019, airlines for the first time started to make public commitments around achieving net zero. And in 2020, my company started working with CAPA to essentially track how airlines were doing We've actually found it quite difficult to understand and compare performance of airlines. So we've worked together since 2020 really to collect consistent data so we can compare, not to embarrass airlines, not to name and shame, but really to have a sort of an objective, robust tracking of actual performance of airlines. And so today I just wanted to share— there's a sustainability panel and I'm sure it'll be a great panel straight after this, just some facts and trends that we're seeing in relation to the transition to net zero. And perhaps the first place to look would be, well, how has the total emissions of the industry changed since 2019 when that commitment was made? And you can see there that The, uh, setting aside the COVID slump, the recent trend has been to increase. And in fact, the, um, I think emissions now are about 8% higher than they were in 2019, including last year for the first time probably exceeding about a billion tonnes of CO2 emitted. Um, and if you look at the '23 to '25 Part of that graph. That's about an annual increase of 6%. So against a target of net zero, that's where the current performance is. If you look at it in terms of efficiency, a slightly better picture here which shows that the carbon intensity of airline operations has decreased. In fact, 2024 was the first year where it got back to 2019 levels, and in 2025 there was a further continual— continued improvement in that. It's reducing at about 1.5% a year at the moment, um, and, uh, clearly if it continued at 1.5%, it would take a long time to get to net zero, but there are obviously some other factors at play. Um, To just go a little further into that and say, well, that's the overall industry efficiency. What about the difference between full-cost and low-cost carriers? Full-service, low-cost carriers. And if you look at it, what you see is there's about a 20% difference where low-cost carriers on average emit 20% less carbon per passenger kilometre. Wow. Again, the recent year trend— actually, the low-cost carrier has slowed its reduction, if you like. And there are some limits to it, given that it's mostly driven by high load factors and young fleets. But again, if you take that one step further and say, well, what about individual airlines? What are we seeing there? This graph here, which is— it just looks like a line, I'm sure, and, and, but each one of those dots represents an airline. Um, and you see there's a very wide range of performance in terms of carbon efficiency, if you like, from the green dot on the left, which is Wizz Air, the low-cost Hungary airline, which is currently running at about 50 grams of carbon per passenger kilometre, if that number means anything. But in relative terms, the industry average is about 87. And there are some, as I say, quite a spread. I'm not going to go into any detail on it now, but as you can imagine, this— to get to net zero, airlines need to be at zero or net zero grams. And so anyone that's out at 80, 90, 100 plus— 100. The journey to get to net zero is a lot further than an airline that's at 50, and that journey also potentially represents significant costs. So there are some financial implications and business implications of this that we're not going to go into today. But, um, the, the key plank— and I'm sure the panel is going to talk much more about this— is the uptake of SAF, sustainable aviation fuel. And so this graph represents the percent of fuel, percent of total fuel in the industry since 2019 that's SAF. And it's a good news story, notwithstanding the fact that at 0.7%, it's still a very small percent of fuel. There's clearly a growing uptake. SAF use in '25 was about double that in '24, which was about double that In '23. Um, just some data there, some summary there. The 75% of all SAF was by European airlines, um, and 15% US, 8% APAC. Slightly skewed by the fact that some of the American airlines in particular, many of you may have heard last year when Southwest made a very visible sort of step back from their SAF commitments. under pressure from a significant investor. So some of the data out of the US— in fact, Southwest and Alaska did not report their SAF use last year. So that number is a little bit skewed, but the trend is quite clear in terms of the continued focus of European airlines. This here shows the actual airlines and the amount of SAF they're using. I apologise, I keep turning around, but that screen is so small I can't actually read the, uh, the points on it. But you can see KLM, British Airways, Scandinavian are all up and around 5% of SAF, uh, which is a pretty significant achievement. Cathay Pacific is the highest volume, or was the highest volume SAF user in Asia-Pacific in 2025 at about 36,000 tonnes. The other thing you'll probably notice here, and I haven't quantified it, but probably 95% of the SAF is used by about 10 to 15 airlines. So there are some real leaders in this space and others who are, I guess, making plans and implementing a strategy to increase. Another thing I wanted to look at just briefly was how do the major alliances compare in their performance to the industry average as well as airlines that aren't part of alliances? So the bars there represent the emission intensity of the different— I'm not sure whether you can read that, but the low one on the left is the airlines that are not part of alliances. Yeah. And they're probably about 10% lower in emissions, principally because there's— that's mostly where the low-cost carriers sit within that bucket. But the red line shows that it's the alliance airlines that are most prominent in driving the SAF uptake. This graph here, I just— We talk about breakeven carbon price, and essentially what we do is we look at the profit, operating profit, and divide it by the carbon emissions. And that essentially says, if I took all of the profit of the industry and I used it to offset the carbon, at what price of carbon would all of the profit of the industry be spent on offsetting carbon? So that's a really interesting question. offsetting the carbon emissions. And at the moment it's about $91. Um, and you can see there's a very substantial spread across that. Um, if you convert the cost of SAF, and obviously making some assumptions here about what is the price of SAF, but SAF is approximately $500 US dollars per tonne to remove carbon. Um, so the Total profit of the industry as of 2025 could afford $91 per tonne. And SAF is currently about $500 per tonne of carbon removed. Not $500 per tonne of SAF, but $500 for every— to remove 1 tonne of carbon. So you can see quite a significant gap there. And clearly there are some implications for that. Just quickly, the final thing I wanted to show— one of the things we're starting to do now is benchmark airports. And I don't mean airports in terms of how much energy do they emit from the lights in the terminal and the vehicles driving around, but from the incoming and departing flights to an airport. If we quantify that, what's the carbon footprint of each of the airports in the world? And you can see the rank there. These are just the top 30 airlines by seat kilometre. And again, you see quite a significant spread. The reason I added those light blue— I picked a couple of hubs that are used dominantly by low-cost carriers like Ryanair, Wizz Air, et cetera. And as you might expect, the performance of airports And their rank, if you like, is dominantly affected by the airlines that are using it. Now, my time is 100% up now, so I will finish. But hopefully there are— there were some data points of interest in there. Happy to follow up with anyone afterwards. But I will now hand over to the sustainability panel. Thank you very much.

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