Although there has been a generally constructive background for aviation in the past few years with approximately 3% global GDP growth and low unemployment, the future is less certain.
The volatile geopolitical situation, from the new US administration to conflict zones, will likely stop that growth from accelerating and may even decelerate it, according to Marie Owens Thomsen, IATA’s SVP Sustainability and Chief Economist.
“It’s a great shame that airlines haven’t had access to new aircraft when they’ve needed them most and might get the deliveries when business slows down,” she says.
Supporting renewable energy
The supply chain issue affects multiple areas, including sustainability. As the industry fleet ages—the average is now at 14.8 years—fuel efficiency improvement has stagnated, the first time this has happened since the metric was recorded.
This has put even greater pressure on the supply of sustainable aviation fuels (SAF). In 2024, SAF production doubled to 1 million tonnes, but this was below expectation. Moreover, the European Union mandate for 2% SAF uptake that came into force on 1 January 2025 has pushed the SAF price notably higher. The low oil price is a double-edged sword too. Usually seen as a positive, new energy markets perform far better when the cost of oil is higher.
“It is too easy to make money on oil and too difficult to make money on new energy,” Thomsen informs. ”No private company or individual organization can address that. Only policy makers can. They must support oil less and renewables more. It is that easy.”
Or so it would seem. At the 2023 COP and G7 meetings, states agreed that oil subsidies should stop. No such wording came out of the 2024 events.
But there are positives too. The next COP meeting is in Brazil, a country with enormous SAF production potential and likely to be among the first to be a net negative country in terms of emissions.
And China has expanded a SAF trial and is expected to announce a policy structure in the near future. With a huge domestic market, exports might be limited but it would be a massive boost for the sector even so.
There are also several industry initiatives that promise to support the emerging SAF market. The SAF Registry, based on the SAF Accounting and Reporting methodology, and the upcoming SAF Matchmaker tool show commitment to, and proof of, progress.
Confidence in the future is also strengthened by a growing portfolio of new technologies. Progress has been made in hydrogen and electric power for both SAF production and as alternative propulsion methods. And there are advances in Alcohol-to-Jet (AtJ) and Power-to-Liquid (PtL). Commercialization beyond HEFA (Hydrotreated Esters and Fatty Acids)-based SAF will be critical.
“Some technologies may become more important post-2050,” says Thomsen. “But we can’t wait. The research has to happen now and that can sometimes lead to accelerated breakthroughs.
“The point is we can’t pick a winner yet. It’s way too early. We have to explore every possibility, including new feedstocks for SAF, co-processing, carbon capture, hydrogen and electric.”
