{"title":"Redefining the skies: How sustainable aviation fuel alters airline cost structure and market dynamics","authors":"Fecri Karanki","doi":"10.1080/15568318.2024.2397642","DOIUrl":null,"url":null,"abstract":"<div><div>Forecasts by the FAA in 2022 suggest that air travel will consistently increase over the next two decades, further escalating greenhouse gas emissions. Sustainable Aviation Fuel (SAF) is pinpointed as a potent solution for greenhouse emissions. However, its higher costs compared to conventional fuels present a challenge for its adoption. We examine the economic ramifications of SAF adoption on U.S. airlines by simulating two distinct scenarios. Our results reveal a 5.9% rise in the marginal costs (MC) of Full-Service Airlines (FSAs) with a 20% SAF blend while Low-Cost Carriers (LCCs) experience only a 1% increase under the same scenario. Alternatively, using a SAF blend that is 20% cheaper in a 50–50 ratio results in an 8.8% increase in the MC of FSAs, compared to just a 2% rise for LCCs. These scenarios suggest that the cost convergence of business models observed in recent years is unlikely to be achieved.</div></div>","PeriodicalId":47824,"journal":{"name":"International Journal of Sustainable Transportation","volume":"18 8","pages":"Pages 695-703"},"PeriodicalIF":3.1000,"publicationDate":"2024-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Sustainable Transportation","FirstCategoryId":"5","ListUrlMain":"https://www.sciencedirect.com/org/science/article/pii/S1556831824000303","RegionNum":3,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ENVIRONMENTAL STUDIES","Score":null,"Total":0}
引用次数: 0
Abstract
Forecasts by the FAA in 2022 suggest that air travel will consistently increase over the next two decades, further escalating greenhouse gas emissions. Sustainable Aviation Fuel (SAF) is pinpointed as a potent solution for greenhouse emissions. However, its higher costs compared to conventional fuels present a challenge for its adoption. We examine the economic ramifications of SAF adoption on U.S. airlines by simulating two distinct scenarios. Our results reveal a 5.9% rise in the marginal costs (MC) of Full-Service Airlines (FSAs) with a 20% SAF blend while Low-Cost Carriers (LCCs) experience only a 1% increase under the same scenario. Alternatively, using a SAF blend that is 20% cheaper in a 50–50 ratio results in an 8.8% increase in the MC of FSAs, compared to just a 2% rise for LCCs. These scenarios suggest that the cost convergence of business models observed in recent years is unlikely to be achieved.
期刊介绍:
The International Journal of Sustainable Transportation provides a discussion forum for the exchange of new and innovative ideas on sustainable transportation research in the context of environmental, economical, social, and engineering aspects, as well as current and future interactions of transportation systems and other urban subsystems. The scope includes the examination of overall sustainability of any transportation system, including its infrastructure, vehicle, operation, and maintenance; the integration of social science disciplines, engineering, and information technology with transportation; the understanding of the comparative aspects of different transportation systems from a global perspective; qualitative and quantitative transportation studies; and case studies, surveys, and expository papers in an international or local context. Equal emphasis is placed on the problems of sustainable transportation that are associated with passenger and freight transportation modes in both industrialized and non-industrialized areas. All submitted manuscripts are subject to initial evaluation by the Editors and, if found suitable for further consideration, to peer review by independent, anonymous expert reviewers. All peer review is single-blind. Submissions are made online via ScholarOne Manuscripts.