Sustainable Aviation Fuel Is Too Expensive For Ultra Low Cost Carriers

With the proposed ReFuelEU Aviation blending mandate on the table, the price for Sustainable Aviation Fuels (SAFs) is projected to decrease significantly. However, given the current lack of supply and infrastructure, they are still prohibitively expensive for ULCCs such as Wizz Air. Until biofuels become more accessible, the airline is doing its part by operating one of Europe’s youngest fleets.

Wizz Air’s initial A321neo
Wizz Air says Sustainable Aviation Fuels are currently too expensive to be compatible with its business model. Photo: Wizz Air

Equal European approach needed

Speaking to Simple Flying’s Managing Editor Joanna Bailey during the latest installment of our Future Flying webinar series, Wizz Air’s Chief Commercial Officer George Michalopoulos gave his thoughts on the use of biofuel in the budget airline market. The takeaway is that, at the moment, SAFs are still too expensive to make any commercial sense for an ultra-low-cost carrier like Wizz.

However, with the right investments from governments and an equal push of political will across Europe, the Wizz CCO does believe that it will be a key element in the sustainability work of the industry moving forward.

“What we’re seeing is governments in certain countries are picking this up and are making significant investments, but it’s it not equally done across Europe,” Mr Michalopoulos stated when asked who should pick up the tab for the promotion of SAF and adjacent infrastructure.

Sustainable Aviation Fuel Is Too Expensive For Ultra Low Cost Carriers
Wizz’s management is calling for coordination from governments across Europe when it comes to SAFs. Photo: Getty Images.

ReFuelEU aviation

Mr Michalopoulos could well get his wish, or, at least partly. While there is still a ton of work to be done, including politically motivated negotiations within the motley group that make up the EU 27, the European Commission has just tabled its ‘Fit for 55’ package.

Intended to facilitate a 55% cut of CO2 emission across the bloc compared to 1990 by 2030, the proposed package features the ReFuelEU Aviation initiative. This would mean that all aircraft departing from an airport in the EU will need to operate on a blend of SAF and traditional jet fuel.

The requirement will start at 2% in 2025, go to 5% in 2030 and reach 63% in 2050. Brussels believes that the blending mandate will incentivize production, bringing the cost for SAFs down to much less than its current price, which sits at about three times that of traditional kerosene jet fuel.

The Commission says that by this measure alone, emissions will be reduced by 5% by 2030 and by 60% by 2050. SAFs currently make up just 1% of total jet fuel consumption within the EU.

Sustainable Aviation Fuel Is Too Expensive For Ultra Low Cost Carriers
Wizz Air operates one of the youngest fleets in Europe. Photo: Getty Images.

Young fleets should be supported more

Meanwhile, the Wizz Air CCO also believes that one of the most important parts within the sustainability realm is for airlines to invest in new aircraft and operate a young fleet. Something he says is being hampered by the insistence of governments to protect their national carriers, creating an ‘uneven playing field’.

“If you take the European airlines, and if they were to operate on Wizz’s fleet, average age 5.4 years, they would reduce CO2 emissions by 34%, which is roughly 20 million tonnes in a year,” the CCO said during yesterday’s interview.

Do you think a blending mandate is the way forward? What responsibilities should be placed on individual governments in terms of SAF investment? Should there be a ‘fleet renewal’ mandate? Leave a comment below and let us know.