Category: news

5 March 2025     No. 10

Geneva –  The International Air Transport Association (IATA) announced that the 2025 World Cargo Symposium (WCS) will focus on digitalization, sustainability and safety/security as the key issues in helping the global air cargo industry as it adapts to unfolding geopolitical shifts.

“Air cargo demonstrated its resilience in adapting to the post-pandemic world. In 2024, more cargo was transported by air than ever before. But the world is moving at an even faster pace with technological advancements, geopolitical shifts, evolving risks, and changing customer needs. At WCS in Dubai, we’ll collectively take stock of what’s next for air cargo, focusing on digitalization, sustainability, safety/security, and e-commerce. The growing demand for air cargo underscores its critical role,” said Willie Walsh, IATA’s Director General.

WCS is taking place in Dubai, United Arab Emirates, from 15 to 17 April hosted by Emirates SkyCargo and dnata. It is the second time the WCS is hosted in the United Arab Emirates, with the first in 2017.

“With its strategic location and world-class logistics infrastructure, Dubai is a natural choice for the 2025 IATA World Cargo Symposium. As this year’s host airline, Emirates SkyCargo is set to showcase its expanding capabilities and commitment to driving efficiency, innovation, and connectivity across the air cargo industry. The symposium will be a key platform to shape the future of air cargo and align on the best strategies for growth,” said Badr Abbas, Divisional Senior Vice President, Emirates SkyCargo.

“We’re proud to welcome industry leaders to Dubai, home to our first and largest operations, at a time of incredible growth and transformation in the cargo sector. With safety, innovation and sustainability at the core of our business, the IATA World Cargo Symposium offers an excellent opportunity to exchange ideas and explore new solutions. We look forward to connecting with our partners and stakeholders to enhance both operational and environmental efficiency, driving meaningful progress across the industry”, said Clive Sauvé-Hopkins, dnata’s CEO – Airport Operations.

Speakers & Sessions

Walsh along with Brendan Sullivan, IATA’s Global Head of Cargo will be speaking at the event along with:

• Badr Abbas, Division Senior Vice President, Emirates SkyCargo
• Clive Sauve-Hopkins, CEO – Airport Operations, dnata
• Andres Bianchi, Chief Executive Officer, LATAM Cargo and IATA Cargo Advisory Council Chair
• Gabriela Hiitola, SVP, Finnair Cargo
• Dr. Ludwig Hausmann, Senior Partner and Leader of the Logistics Sector in Europe, McKinsey & Company
• Tom Owen, Head of Cargo, Cathay Cargo

The symposium will feature plenary sessions, specialized tracks, workshops, and executive summits, addressing:

• Digitalization: The role of AI and automation in the future of air cargo.
• Sustainability: Strategies for decarbonization, reducing single-use plastics and ESG reporting.
• Risk & Resilience: Navigating geopolitical uncertainty, regulatory shifts, and supply chain disruptions.

The WCS program will be complemented by a series of workshops, including:

• Building the next generation of talent at the Future Air Cargo Executives Summit (FACES)
• The benefits of competency-based training through IATA’s Competency-Based Training and Assessment Center (CBTA Center) and how it helps to improve workplace safety and performance.
• Improving performance on key market segments using IATA Center of Excellence for Independent Validators CEIV programs (CEIV Pharma, CEIV Live Animals, CEIV Lithium Batteries and CEIV Fresh).
• How IATA’s Cargo Solutions are assisting the industry in decision making and cargo compliance, towards improving safety and efficiency.
• The E-Commerce Forum will identify how more visibility between e-retailers and cargo operators would improve efficiency.
• The ULD Forum will focus on ULD Design, opportunities for AI, and how ULDs can collect and report sustainability-related data.

WCS is open to accredited members of the press.

By Rebecca JeffreyRebecca Jeffrey27 February 2025

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shutterstock_1836506008

Source: Shane Hoggatt/Shutterstock

January marked the 18th consecutive month of growth for the air cargo industry, but the rate of improvement continues to decelerate and yields and cargo load factors are down.

Total demand, measured in cargo tonne-kilometers (CTK), rose by 3.2% compared to January 2024 levels, the latest data from IATA shows. However, growth rates have been decelerating since September.

Capacity, measured in available cargo tonne-kilometers (ACTK), increased by 6.8% compared to January 2024. Meanwhile, Cargo Load Factor (CLF) declined to 43.9%, the lowest in 17 months.

“January marked 18 consecutive months of growth for air cargo, but the month’s 3.2% year-on-year growth is a moderation from double-digit peaks in 2024. Similarly, yields, while still above January 2024 levels, saw a 9.9% decline from December as cargo load factors also declined by an average of 1.5 percentage points,” said Willie Walsh, IATA’s director general.

“While external factors such as trade growth, declining fuel costs and expanding e-commerce remain positive for air cargo, it is important to closely watch the evolution of market conditions at this time. In particular, the wild card is the potential for tariff-driven trade policies from the US Trump Administration. Fortunately, the air cargo industry is well practiced at dealing with shifts in the operating environment.”

Looking at the wider operating environment, IATA noted both economic growth and inflation.

Year on year, industrial production rose 2.6% in December. Global goods trade grew for a ninth consecutive month, reporting a 3.3% increase in December.

The Purchasing Managers Index (PMI) for global manufacturing output was above the 50-mark for January, indicating growth. At 50.62, this was the highest reading since July 2024, said IATA. The PMI for new export orders rose to 49.37, remaining just shy of the 50-mark, which is the growth threshold.

In January, consumer inflation in the US and in Europe both rose by 0.1 percentage points to 3% and 2.8% respectively. Chinese consumer inflation rebounded to 0.5% in January, after progressively falling to 0.1% in the previous four months.

 

By

Miquel Ros

March 4, 2025, 16:26 (UTC +3)

AviationTurkish Airlines Airbus A350 900

Kevin Hackert / Shutterstock

On March 4, 2025, Turkish Airlines announced its 2024 full year financial results, which show a US$2.4 billion net profit.

Part of these funds will go straight to shareholders, since the airline, which has been buying back its own stock, will pay $260 million in dividends.

The Turkish flag carrier achieved this positive result on a total revenue of US$22.7 billion, up 8.2% over the previous year, for a 10.5% net profit margin.

Taking into account Earnings Before Interest, Tax, Depreciation, Amortization (EBITDA) and rent, Turkish Airlines’ profit margin climbs to a whopping 25.3%.

Although passenger revenue increased by a mere 4%, the airline’s cargo business saw revenue surge by 35% year on year. Turkish Cargo, the airline’s freight division, operates a fleet of 24 dedicated freighters and has seen its business increase by 20% in 2024, already making it one of the world’s three top air cargo operators.

In 2024, Turkish Airlines also consolidated its absolute global lead when it comes to the number of international destinations, 352, and countries served, 131. What’s more, 2024 saw the addition of several iconic far-flung destinations, such as Santiago de Chile (SCL) and Sydney (SYD) and Melbourne (MEL), in Australia.

The carrier’s network is expected to keep growing unabated in 2025. The first quarter of the year has seen already the resumption of flights to Damascus (DAM) and Benghazi (BEN), as well as the announcement of the launch of new services between Istanbul (IST) and Phnom Penh (PNH), Auckland (AKL) and Minneapolis (MSP).

Likewise, capacity is also on the rise. It went up by 8.2% in 2024 as Turkish Airlines expanded its fleet by 12%, to 492 aircraft.

If Turkish Airlines manages to fulfill its long-term plans, the 85.2 million passengers it carried in 2024 may soon be dwarfed, as the carrier prepares to nearly double its fleet to more than 800 aircraft within a decade.

 

Air cargo will lose out with retail Red Sea return

By Rebecca Jeffrey  12 February 2025

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Logistics

Air cargo should expect the loss of some consumer and retail goods volumes when ocean shipping resumes in the Red Sea and Suez Canal.

Milena Milenkovic, regional airfreight manager, Benelux, Flexport said that consumer goods and retail goods that are traditionally transported by ocean but moved to air at the start of the Red Sea crisis will switch back when passage becomes safe and reliable.

Speaking during a Flexport webinar on 10 February, she said: “If the Suez Canal opens I do expect that certain volumes – mainly fast moving consumer goods and retail – will go back to ocean because when the navigation is more reliable in ocean there will be no reason for these companies to ship by air again.”

However, Milenkovic said it’s possible that ocean shipping in its regular form won’t return to the Red Sea this year due to the complexity of the geo-political situation.

“Yes, there is a ceasefire but there is still a lot to be solved (in the region),” she stressed during Flexport’s ‘Scenario Planning: 3 Developments Shaping The Freight Market’ webinar.

Following the start of the Red Sea crisis and rerouting of ships from the Suez Canal to the Cape of Good Hope, some shippers and forwarders invested in airfreight capacity in a bid to fulfil orders without delays.

While, there are different schools of thought about how much business Red Sea disruption has generated for the air cargo industry, many agree that sea-air shipment options have been well utilised.

Certain countries such as India, Singapore, Sri Lanka, Korea and others “became quite big hubs for sea-air…once the Suez Canal got closed”, said Milenkovic.

She added that the popularity of the model is down to it being “much more economical than air, just a little bit more expensive than ocean”.

Red Sea scenarios

There are several scenarios that could play out with the introduction of shipping back to the Red Sea and Suez Canal, according to Flexport’s research.

 

Guillaume Caill, head of ocean, EMEA, Flexport said the most likely (45% chance) scenario is a “bandwagon” effect where carriers all switch back simultaneously, driven by market leaders signalling confidence, peer pressure and competitive advantage.

“We would see volatility,” Caill said. In the short term a surge in price would be expected, while in the long term there would be more capacity putting pressure on rates.

But carriers could also adopt different strategies and there could be a gradual return to the Suez Canal (30% chance), or the Red Sea could stay closed, although this is unlikely (25% chance), believes Flexport.

Shipping lines have reacted with extreme caution so far and most are in a “wait and see” mode to see how the ceasefire will play out before allowing ships to operate in the Red Sea, said Caill.

If the situation remains stable and carriers do return to the Red Sea “then we will likely see overcapacity kicking in again” with “rates under pressure”, he said.

There will also likely be port congestion with container flow disrupted and “a problem with empty container availability back to Asia”.

In a live poll during the webinar, most participants said Red Sea shipping would likely return in late 2025.

Sanne Manders president, Flexport noted that the time of year will make a difference as to the impact on ocean as the closer to the peak season the more disruption, but stressed we should expect Red Sea shipping to return at some point when the route is safe because it’s a “better product at a lower rate”, compared to shipping through the Cape of Good Hope.

Whether or not there will be more opportunities for airfreight, it’s likely too early to speculate.

 

13 February 2025

Geneva – The International Air Transport Association (IATA) and 123Carbon announced a strategic collaboration to develop interoperability between their respective Sustainable Aviation Fuel (SAF) registries. Interoperability will increase transparency, avoid emissions reporting errors—including double issuance—and streamline certificate management across SAF registries.

The collaboration between IATA and 123Carbon will focus on three key elements:

1. A unique identifier and alignment of the relevant data points to exchange between registries.
2. A process for the exchange of information to avoid any potential double issuance.
3. A dispute resolution process.

“User trust is essential. The transparency that comes with interoperability will ensure that our registries can function cohesively to maximize SAF’s potential to support aviation’s decarbonization. The broader the alignment among registry providers, the better. We welcome all entities active in this field to work with IATA and 123Carbon towards global interoperability between all registries,” said Marie Owens Thomsen, IATA’s Senior Vice President Sustainability and Chief Economist.

“123Carbon is committed to establishing integrity and trust in the market for Environmental Attribute Certificates (EACs) within multi-modal transportation (e.g. air, sea, road & rail). With IATA, we have found a strong partner in the aviation sector that shares our beliefs. This collaboration allows SAF providers, airlines, freight forwarders, and corporate entities to utilize our platforms without the concern of double issuance, whilst managing their SAF certificates digitally on our platform,” said Jeroen van Heiningen, Managing Director, 123Carbon.

IATA and 123Carbon will seek engagement with other SAF stakeholders to join this initiative to deepen the interaction between registries.

About the IATA SAF Registry

The IATA SAF Registry will launch in April 2025 with the aim to facilitate the broadest possible use of SAF in aviation’s decarbonization by standardizing the market for SAF certificates. SAF certificates are issued after a SAF batch is registered and contains product and environmental attribute information. As part of its preparation for the Registry’s launch, IATA recently released the IATA SAF Accounting and Reporting Methodology.

 

The development of the IATA SAF Registry is supported by over 50 organizations, including airlines, fuel producers, and State authorities. In developing the IATA SAF Registry, IATA is also consulting with a broad range of SAF stakeholders, including 123Carbon.

About 123Carbon

With over 50 global users, 123Carbon is the first independent platform for carbon insetting across all transport modes. It supports fuel suppliers, fleet operators, forwarders and cargo owners in the issuance, management and transfer of Environmental Attribute Certificates (EACs) across all modalities and all technologies, including SAF. Next to the central registry, 123Carbon also offers a private Book & Claim solution that SAF suppliers and airlines can use to allocate company-branded SAF certificates to their customers in a private environment. This is also regarded as a critical instrument for forwarders that operate across different transport modes and are seeking a single solution to allocate their environmental benefits.

January 21, 2025 by Payload Asia

association of asia pacific airlines

The Association of Asia Pacific Airlines (AAPA) announced that Qantas Airways Limited has joined AAPA with immediate effect.

“We are very pleased and honoured to welcome Qantas Airways as a member of AAPA. Qantas, a leading Australian airline with a long heritage, would not only strengthen the Association’s voice in international aviation policy discussions, but also reinforce effective regional collaboration on key aviation tenets, namely safety, sustainability, and seamless air travel,” said Mr. Subhas Menon, Director General of AAPA.

Mr. Cam Wallace, Chief Executive Officer of International and Freight, Qantas, said, “Qantas looks forward to working with members of AAPA as the industry embraces opportunities to meet the evolving needs of customers in a dynamic market, while at the same time confronting challenges such as climate change and supply chain disruptions. There are many areas airlines can share best practices and experiences to benefit the travelling public”.

Other Topics: Air Cargo Network, Air Express, Air Freight Services, Air Logistics, Asia Pacific Air Cargo, Asia Pacific Air Freight, Asia Pacific Air Logistics, Asia Pacific Shipments, Association Of Asia Pacific Airlines, Cargo Flights, E-Commerce Logistics, Express Delivery, Express Logistics, International Air Shipments, International Express Delivery, Qantas Airways, Transpacific Air Cargo, Transpacific Air Freight

By Damian BrettDamian Brett16 January 2025

US Customs and Border Protection (CBP) has unveiled its planned changes to de minimis rules to help ease the administrative burden of dealing with rapidly growing e-commerce volumes and to clamp down on shipments that contain illegal goods.

CBP yesterday announced the proposed changes that would require extra shipment information to be submitted and create a fully electronic process to allow filers to submit data prior to a shipment’s arrival.

The proposals should not come as a surprise as politicians and regulators have in recent years been calling for changes to the de minimis rules that allow shipments worth less than $800 to be imported duty-free and with minimal scrutiny compared with other cargo types.

The proposed Entry of Low-Value Shipments (ELVS) rule was announced in a Notice of Proposed Rulemaking (NPRM), with interested parties given 60 days to respond.

“This data will reduce the burden for CBP officers who process these large volumes of shipments, leading to more accurate targeting,” CBP said. “As a result, CBP resources will be better focused on accurately identifying and interdicting violative shipments.”

On average, CBP processes over 4m de minimis shipments into the US each day, up from around 1.9m per day in 2022.

“The overwhelming volume of low-value shipments and lack of actionable data collected pursuant to current regulations inhibit CBP’s ability to identify and interdict high-risk shipments that may contain illegal drugs such as illicit fentanyl, merchandise that poses a risk to public safety, counterfeit or pirated goods, or other contraband,” CBP said.

“The proposed rule is part of a larger effort to address vulnerabilities and prevent bad actors from exploiting this growing segment of international trade to smuggle dangerous goods into the US.

“It will allow CBP to target high-risk shipments more effectively, including those containing counterfeit goods, synthetic opioids such as fentanyl, or the precursors and pill press parts used to make that deadly drug.

“Additionally, it will revise the current process for entering low-value shipments to require additional data elements that would assist CBP in verifying eligibility for duty- and tax-free entry by creating a fully electronic process for filers to transmit entry data prior to a shipment’s arrival.”

The proposed new process is termed the enhanced entry process.

 

In order to file an enhanced entry, CBP will require the submission of certain advanced electronic data, including data about the contents, value, origin, and final destination of eligible shipments.

CBP added that the ELVS rulemaking is the first of two NPRMs announced by the Biden-Harris Administration in September 2024.

The second NPRM is expected to be published in the coming days and CBP encouraged congress to move forward with statutory reform to address the surge in de minimis imports that put ”American consumers, workers, retailers, and manufacturers at risk”.

The rapid growth in e-commerce volumes has been a boon for the air cargo industry over the last couple of years, playing a major role in last year’s rapid volume growth.

There are concerns that attempts to stamp down on e-commerce shipments could hit the air cargo market.

Geneva – The International Air Transport Association (IATA) released data for November 2024 global air cargo markets showing:

• Total demand, measured in cargo tonne-kilometers (CTK), rose by 8.2% compared to November 2023 levels (9.5% for international operations) for a 16th consecutive month of growth.
• Capacity, measured in available cargo tonne-kilometers (ACTK), increased by 4.6% compared to November 2023 (6.5% for international operations).

“It was a good November for air cargo with 8.2% demand growth nearly doubling the 4.6% growth in cargo capacity. Fuel costs tracked at 22% below previous-year levels and tight market conditions supported yield growth at 7.8%. All things considered we are looking to close out 2024 air cargo performance on a profitable note. While this strong performance is very likely to extend into 2025, there are some downside risks that must be carefully watched. These include inflation, geopolitical uncertainties and trade tensions,” said Willie Walsh, IATA’s Director General.

Several factors in the operating environment should be noted:

• Year-on-year, industrial production rose 2.1% in October. Global goods trade grew for a seventh consecutive month, reporting a 1.6% increase.
• The Purchasing Managers Index (PMI) for global manufacturing output was above the 50-mark for November, indicating growth. However, the PMI for new export orders remained below the 50-mark, suggesting ongoing uncertainty and weakness in global trade.
• US headline inflation, based on the annual Consumer Price Index (CPI), rose by 0.1 percentage points to 2.7% in November. In the same month, the inflation rate in the EU increased by 0.2 percentage points to 2.5%. China’s consumer inflation fell to 0.2% in November, continuing concerns of an economic slowdown.

Air cargo market in detail – November 2024

November 2024

(% year-on-year)             World share1     CTK        ACTK     CLF (%-pt)           CLF (level)

Total Market      100%     8.2%      4.6%      1.6%      49.0%

Africa    2.0%      -0.7%     0.4%      -0.5%     42.5%

Asia Pacific          33.3%    13.2%    9.4%      1.7%      50.0%

Europe 21.4%    5.6%      4.3%      0.7%      57.6%

Latin America     2.8%      11.6%    6.4%      1.9%      39.6%

Middle East        13.5%    3.6%      -0.6%     2.0%      49.4%

North America  26.9%    6.9%      2.2%      1.9%      43.8%

1% of industry CTKs in 2023

Asia-Pacific airlines saw 13.2% year-on-year demand growth for air cargo in November, the strongest growth among the regions. Capacity increased by 9.4% year-on-year.

North American carriers saw 6.9% year-on-year demand growth for air cargo in November. Capacity increased by 2.2% year-on-year.

European carriers saw 5.6% year-on-year demand growth for air cargo in November. Capacity increased 4.3% year-on-year.

Middle Eastern carriers saw 3.6% year-on-year demand growth for air cargo in November. Capacity decreased by 0.6% year-on-year.

Latin American carriers saw 11.6% year-on-year demand growth for air cargo in November. Capacity increased 6.4% year-on-year.

African airlines saw a 0.7% year-on-year decrease in demand for air cargo in November, the slowest among regions. Capacity increased by 0.4% year-on-year.

Trade Lane Growth: International routes experienced exceptional traffic levels for the 16th consecutive month with a 9.5% year-on-year increase in November. Airlines are benefiting from rising e-commerce demand in the US and Europe amid ongoing capacity limits in ocean shipping.

Trade Lane          YOY Growth       Notes    Market Share of Industry*

Asia-North America        +13%     13 consecutive months of growth            24.90%

Europe-Asia       +12.9% 21 consecutive months of growth            19.60%

Middle East-Europe        +9.9%    16 consecutive months of growth            5.00%

Middle East-Asia              +9.0%    18 consecutive months of growth            7.20%

Within Asia         +12.2% 13 consecutive months of growth            6.70%

North America-Europe  +5.6%    13 consecutive months of growth            14.20%

Africa-Asia          +7.6%    15 consecutive months of growth            1.20%

10 December 2024

Geneva – The International Air Transport Association (IATA) expects severe supply chain issues to continue to impact airline performance into 2025, raising costs and limiting growth.

IATA quantified the scale of the challenges facing airlines because of supply chain issues in its latest airline industry outlook:

• Average age of the global fleet has risen to a record 14.8 years, a significant increase from the 13.6 years average for the period 1990-2024.
• Aircraft deliveries have fallen sharply from the peak of 1,813 aircraft in 2018. The estimate for 2024 deliveries is 1,254 aircraft, a 30% shortfall on what was predicted going into the year. In 2025, deliveries are forecast to rise to 1,802, well below earlier expectation for 2,293 deliveries with further downward revisions in 2025 widely seen as quite possible.
• The backlog (cumulative number of unfulfilled orders) for new aircraft has reached 17,000 planes, a record high. At present delivery rates, this would take 14 years to fulfil, double the six-year average backlog for the 2013-2019 period. However, the waiting time is expected to shorten as delivery rates increase.
• The number of “parked” aircraft is 14% (approximately 5,000 aircraft) of the total fleet (35,166 as at December 2024, including Russian-built aircraft). While this has improved recently, parked aircraft remain 4 percentage points higher than pre-pandemic levels (equivalent to some 1,600 aircraft). Of these, 700 (2% of the global fleet) are parked for engine inspections. We expect this situation to persist into 2025.

“Supply chain issues are frustrating every airline with a triple whammy on revenues, costs, and environmental performance.  Load factors are at record highs and there is no doubt that if we had more aircraft they could be profitably deployed, so our revenues are being compromised. Meanwhile, the aging fleet that airlines are using has higher maintenance costs, burns more fuel, and takes more capital to keep it flying. And, on top of this, leasing rates have risen more than interest rates as competition among airlines intensified the scramble to find every way possible to expand capacity. This is a time when airlines need to be fixing their battered post-pandemic balance sheets, but progress is effectively capped by supply chain issues that manufacturers need to resolve,” said Willie Walsh, IATA’s Director General.

Specifically, IATA noted that, persistent supply chain issues at least partially responsible for two negative developments:

• Fuel efficiency (excluding the impact of load factors) was unchanged between 2023 and 2024 at 0.23 litres/100 available tonne kilometers (ATK). This is a step back from the long-term (1990-2019) trend of annual fuel efficiency improvements in the range of 1.5-2.0%.
• Exceptional demand for leased aircraft pushed leasing rates for narrow body aircraft to levels 20-30% higher than in 2019.

“The entire aviation sector is united in its commitment to achieving net zero carbon emissions by 2050. But when it comes to the practicality of actually getting there, airlines are left bearing the biggest burden. The supply chain issues are a case in point. Manufacturers are letting down their airline customers and that is having a direct impact of slowing down airlines’ efforts to limit their carbon emissions. If the aircraft and engine manufacturers could sort out their issues and keep their promises, we’d have a more fuel-efficient fleet in the air,” said Walsh.

10 December 2024

Geneva – The International Air Transport Association (IATA) released new estimates for Sustainable Aviation Fuel (SAF) production showing that:

• In 2024, SAF production volumes reached 1 million tonnes (1.3 billion liters), double the 0.5 million tonnes (600 million liters) produced in 2023. SAF accounted for 0.3% of global jet fuel production and 11% of global renewable fuel*.
• This is significantly below previous estimates that projected SAF production in 2024 at 1.5 million tonnes (1.9 billion liters), as key SAF production facilities in the US have pushed back their production ramp up to the first half of 2025.
• In 2025, SAF production is expected to reach 2.1 million tonnes (2.7 billion liters) or 0.7% of total jet fuel production and 13% of global renewable fuel capacity*.

“SAF volumes are increasing, but disappointingly slowly. Governments are sending mixed signals to oil companies which continue to receive subsidies for their exploration and production of fossil oil and gas. And investors in new generation fuel producers seem to be waiting for guarantees of easy money before going full throttle. With airlines, the core of the value chain, earning just a 3.6% net margin, profitability expectations for SAF investors need to be slow and steady, not fast and furious. But make no mistake that airlines are eager to buy SAF and there is money to be made by investors and companies who see the long-term future of decarbonization. Governments can accelerate progress by winding down fossil fuel production subsidies and replacing them with strategic production incentives and clear policies supporting a future built on renewable energies, including SAF,” said Willie Walsh, IATA’s Director General.

Aviation is part of the global energy transition

“The airline industry’s decarbonization must be seen as part of the global energy transition, not compartmentalized as a transport issue. That’s because solving the energy transition challenge for aviation will also benefit the wider economy, as renewable fuel refineries will produce a broad range of fuels used by other industries, and only a minor share will be SAF, used by airlines. We need the whole world to produce as much renewable energy as possible for everybody. Airlines simply want to access their fair share of that output,” said Marie Owens Thomsen, IATA’s Senior Vice President Sustainability and Chief Economist.

To reach net zero CO2 emissions by 2050, IATA analysis shows that between 3,000 to over 6,500 new renewable fuel plants will be needed. These will also produce renewable diesel and other fuels for other industries. The annual average capex needed to build the new facilities over the 30-year period is about $128 billion per year, in a best-case scenario. Importantly, this amount is significantly less than the estimated total sum of investments in the solar and wind energy markets at $280 billion per annum between 2004 and 2022.

“Governments must quickly deliver concrete policy incentives to rapidly accelerate renewable energy production. There is already a model to follow with the transition to wind and solar power. The good news is that the energy transition, which includes SAF, will need less than half the annual investments that realizing wind and solar production at scale required. And a good portion of the needed funding could be realized by redirecting a portion of the retrograde subsidies that governments give to the fossil fuel industry,” said Walsh.

Short Term Measures

Progress on expanding SAF production and use could be accelerated in three critical ways:

• Increase co-processing: Existing refineries can be used to co-process up to 5% of approved renewable feedstocks alongside the crude oil streams. This solution can be implemented quickly and requires minimal material investments. It should urgently be expanded by allowing a greater amount of renewable feedstock to be co-processed. By 2050, co-processing could save $347 billion in capex as more than 260 new renewable fuel plants would not need to be built.
• Diversify SAF production: There are 11 certified pathways to make SAF, but the HEFA method (hydrotreated esters fatty acids (used cooking oil, animal fats etc.)) accounts for around 80% of production in the next five years. SAF volumes could be boosted by increasing investments to scale up production through the other certified pathways, in particular Alcohol-to-Jet (AtJ) and Fischer-Tropsch (FT), which use biological and agricultural wastes and residue.
• Create a global SAF accounting framework: It is essential to have a registry that allows airlines to benefit from the environmental attributes of their SAF purchases and to be able to claim these against their obligations in a transparent manner that prevents double counting. Such a registry is necessary for achieving a global SAF market where all airlines can buy SAF, and all SAF producers can sell their fuel to airlines.

Passenger Support

A recent IATA survey revealed significant public support for SAF. Some 86% of travelers agreed that governments should provide production incentives for airlines to be able to access SAF. In addition, 86% agreed that it should be a priority for oil companies to supply SAF to airlines.