The Impact of Rising Oil Prices on Aviation
Throughout recent history, we have witnessed how surges in oil prices, often triggered by military conflicts or geopolitical tensions—such as the 1973 oil embargo that led to the Concorde’s commercial failure—have put global air transportation in a tight spot. Fuel can account for between 23% and 30% of an airline’s cost structure, depending on the company and crude oil prices. Consequently, fluctuations in this market always keep airlines on edge.
The Push for Zero-Emission Aviation
In response to global pollution issues, the aviation industry has embraced zero-emission CO2 policies through the development of alternative fuels and new propulsion systems for future aircraft. This shift aims to reduce dependence on a single fuel source, offering relief from the current vulnerabilities.
The CORSIA Initiative and Sustainable Aviation Fuel (SAF)
The International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) has garnered support from over 120 countries, along with the International Air Transport Association (IATA), aircraft manufacturers like Airbus and Boeing, industry suppliers, and numerous stakeholders. The goal is to achieve net-zero CO2 emissions by 2050, with a target of 5% SAF production by 2030. However, the current production stands at only 0.3% of global consumption in 2021, with a projected increase to 0.7% by the end of 2022.
Challenges in SAF Production
SAF’s higher production cost compared to traditional jet fuel is a significant hurdle, largely due to low output. To overcome this, consistent support from governments, passengers, airlines, and producers is essential. Instead of imposing penalties, as the European Union and the UK are doing, incentives like tax credits should be offered to stimulate SAF production.
Promising Developments in Mexico
The recent development of SAF is a positive sign, with Airbus, Aeropuertos y Servicios Auxiliares (ASA), and Canaero sponsoring a SAF development contest during the Mexican Aerospace and Defense Fair (FAMEX) in 2023 and 2025. Additionally, Santander’s commitment to supporting academic institutions with SAF projects through its sustainability director, Maria Calvet, further bolsters this cause.
Expanding Support for SAF in Mexico
The involvement of FIRA, which manages agricultural trusts for Banxico, in the initiative is another encouraging development. Furthermore, existing projects supported by ASA may also receive these funds, demonstrating a promising landscape for SAF advancement in Mexico.
Key Questions and Answers
- What is the main challenge facing global aviation? The primary concern is the industry’s reliance on volatile oil prices, which can significantly impact airline profitability.
- What is the aviation industry doing to address this issue? The industry is actively pursuing zero-emission policies, including the development of alternative fuels like SAF and new propulsion technologies.
- What is the CORSIA initiative? It’s a global scheme by ICAO to offset and reduce CO2 emissions from international aviation, with a target of net-zero emissions by 2050.
- Why is SAF production challenging? SAF’s higher cost and low output compared to traditional jet fuel necessitate consistent support from various stakeholders.
- What positive developments are taking place in Mexico regarding SAF? Several organizations, including Airbus, ASA, Canaero, and Santander, are supporting SAF development through contests and partnerships with academic institutions.
