But only 6% of corporates allow travelers to spend more on sustainable travel options.
The aviation sector’s sustainability journey will pass a major landmark when the world’s first net-zero transatlantic flight takes place later this year.
Virgin Atlantic won the competition to receive government funding for the flight from London to New York’s JFK airport – the first using solely sustainable aviation fuel, or SAF. By fully replacing kerosene, SAF can slash lifecycle carbon emissions by over 70% compared to conventional fossil jet fuel.
By using 100% SAF, combined with carbon removal through biochar credits – a material which traps and stores carbon taken from the atmosphere, the flight becomes net zero. SAF is now at the heart of aviation’s sustainability drive and could be worth £2.4 billion by 2040, supporting up to 5,200 UK jobs by 2035.1
The first commercial flights using SAF took off in 2011 but it wasn’t until June of last year that Swedish airline Braathens and SAF supplier Neste teams up to enable the first ever 100% SAF-powered test flight on a commercial aircraft.2
Business driving SAF boom…
As the biggest consumers, corporates around the globe have realized their Environmental, Social and Governance (ESG) commitments mean they have to play a big part in decarbonizing the aviation sector. The ways they are doing so are pretty creative too.
PwC Netherlands says its employees now fly entirely on SAF, whilst KLM’s Corporate BioFuel Program allows companies to pay a surcharge that covers the difference in price between SAF and traditional jet fuel. These surcharges were then used to purchase SAF for its commercial partners.
In Australia, some companies are bulk buying SAF to reduce their carbon footprints, encouraging mass production of the cleaner energy that airlines need to meet their emissions targets.3
Airlines and fuel producers are offering corporate customers the opportunity to buy SAF not linked to individual flights, which is leading some to go beyond cheaper carbon offset options like planting trees to reduce the environmental burden of flying. Qantas Airways recently announced that five companies will pay a premium to reduce their emissions by contributing to the cost of the airline using SAF.
…but business travel isn’t.
Covid forced corporates to re-assess their attitudes towards flying, and although business travel in general is bouncing back, employers and travelers alike don’t seem to want to turn the clock back. However, some old habits still die hard.4
According to a new industry survey, only 6% of travel managers say their company currently allows employees to spend more on sustainable travel options.5 Ryanair boss Michael O’Leary claims only 1% of his passengers pay the €2 surcharge to offset their flight’s emissions.6
“There’s a big disconnect between passengers on a customer survey going: ‘Oh yes, we want carbon offsetting, we want to do this,’ and then ask them, will you voluntarily offset, and 99 percent kindly say: ‘No thank you, we won’t do it,'” O’Leary told an industry conference. And he’s not alone.
According to the International Air Transport Association (IATA), the typical take-up for voluntary offsetting schemes is between 1-3% of airline customers. Marketers call it the ‘intention-behavior gap.’ As humans, we intend to do the responsible thing by eating healthy, recycle and buy greener products, but there are so many factors that stop us doing so, including cost.
Cost is particularly pertinent here because SAF currently costs between two and eight times more than traditional fossil jet fuel. That’s down to a combination of the current availability of sustainable feedstocks and the continuing development of new production technologies.
This matters a lot because, as airlines feel more pressure to use SAF before its cost is the same as regular jet fuel – which is not going to happen in this decade7 – they may pass some of the costs onto passengers, resulting in an increase in fares of up to 15%.8
A sobering prospect, and one that’s definitely not sustainable for most corporates. So, what’s the solution? At TakeTwo we believe the only answer is for the business travel industry to collaborate if net-zero is to be achieved by 2050. As a TMC, TakeTwo is here to help you shape a greener travel program, before it’s too late.
6 https://www.politico.eu/article/people-balk-paying-more-green-flights/
7 World Economic Forum
8 https://edition.cnn.com/travel/article/saf-jet-fuel-green/index.html
