The journey to sustainable aviation

• Sustainable Aviation Fuels can result in an 80% reduction of lifecycle emissions, but significant capital expenditure and government incentives will be required to ramp up production.
• The electric and hybrid aircraft revolution is underway but technological maturity remains a challenge. A wholesale shift from regulators and companies is needed to embrace a new safety environment.
• Operational and design efficiencies and innovative technologies such as AI can also deliver gains in the short term for the aviation industry.
• Insurers have a key role to play in supporting the de-risking of the transition.

From the International Air Transport Association (IATA) commitment to ‘Fly Net Zero’ [1], to the declaration from the International Aviation Climate Ambition Coalition at COP 26 [2] the air transport industry is not short of promises to dramatically reduce its carbon footprint.

Compared with some other sectors, aviation is a relatively small contributor to global greenhouse gas emissions – in 2019 it was estimated to account for around 2.5% of the world’s CO2 emissions [3]. However, it is also one of the fastest growing, and there is little doubt that every major airline and aerospace manufacturer in the world now has its environmental impact front and center, a topic that is not creeping but is vertiginously ascending the corporate priority ladder. So what have companies got in the pipeline to make good on their promises and what are some of the innovative air travel technologies taking flight?

The first, and most obvious, conclusion is that there is no silver bullet. Potential solutions abound but there is no answer likely to single-handedly push aviation to net zero. The second is that, pressure groups and activists aside, intermediate decarbonization goals are linked to commercial aims – stating the obvious, the more efficiently an aircraft burns fuel, the better for all concerned. Longer term, however, the aviation industry may need assistance from both its insurance, and other financial, partners in de-risking the transition as the costs associated with change are a significant, but not insurmountable, barrier to progress.

While SAFs will be the short- to medium-term workhorse, perhaps the more exciting future developments are the new air travel technologies that remain nascent but capture the imagination more than a simple fuel switch.

The electric aircraft revolution is firmly underway with more than 200 global companies developing concepts. Several have even completed test flights and the appeal is obvious: electric aircraft have no climate impact during operations. They are a thrilling proposition.

However, the biggest issue remains technological maturity – in particular, battery density and the associated range. Batteries will need to be at least five times denser than current lithium-ion batteries and it is not currently thought true electric aircraft will ever have a range greater than 500 to 1,000km (310 to 621 miles) – although it is estimated half of all global flights are shorter than 800km or 500 miles. They also remain relatively far off, with 2040 probably a realistic date for entry into service. There will be an arduous process of certification of such new types of aircraft, with regulators (quite rightly) needing to know the new technology is safe before allowing consumer usage.

So what for long haul? The answer may rest with hybrid aircraft. A concept familiar with road vehicles, but likely to be a blend of electric technology and hydrogen propulsion rather than involving traditional fossil fuels. This is certainly the approach being taken by Airbus, which hopes to develop the world’s first zero-emission aircraft by 2035, with its three ZEROe concepts [6]. The aircraft are powered by hydrogen combustion through modified gas turbine engines. In addition, hydrogen fuel cells create electrical power that complements the gas turbine, resulting in a highly efficient hybrid-electric propulsion system. While not as efficient as pure electric aircraft, hybrid aircraft will be able to provide a range out of reach of electric alone. They will also be able to carry greater number of passengers and offer a realistic alternative to kerosene-powered long-haul routes. 

Such hybrid aircraft may seem like the nirvana, but they are not without drawbacks. Hydrogen storage and usage of course brings safety concerns. While hydrogen processing has been used for years in oil refineries and the fertilizer industry, aviation represents a new road to travel. Happily for its passengers, the aviation world is safety obsessed. All parts of the industry (transport, storage, usage etc.) must pass rigorous safety tests. Current aviation protocol is based on the fossil fuel powered jet engine – a technology that has been around for decades. There will need to be a wholesale shift from regulators and companies to embrace a new safety environment.

“Insurers can of course help by providing cover for new and test products and assisting their clients in de-risking the evolution to new technology,” says Adam Tozzi, Head of Underwriting Global Tasks and Processes, Aviation at AGCS. “This could include insuring electric and hybrid aircraft types through their testing phases and as they move into service, or creating an insurance safety net for a company’s R&D operations. Such a technological leap is not without risk and companies (both manufacturers and end users) will hugely benefit from the support of their trusted partners as they adapt for the future.”

While they are the future, both electric and hybrid technologies will not be available tomorrow and, along with SAFs, there are shorter-term, more mundane, gains to be made by the aviation industry. One of the key areas for such gains is operational efficiency and there is nothing to stop all aircraft operators looking at this side of their business and making changes now. A combination of operational levers can drive emission reductions at scale. Examples can include pre-flight via mission tailoring and fuel planning (i.e. ensuring the right aircraft is being used for the right flight); on the ground via traffic management (to reduce the time engines are in traffic); during approach and descent via better air traffic management (to reduce holding time) and adapting climb and descent procedures (to spend longer at optimal cruise altitude); during cruise via dynamic routing (responding to changing weather patterns); and after flight via preventative maintenance and cleaning.

There are plenty of airlines already embracing these marginal gains. Over 40 airlines have partnered with Sky Breathe [7] – big data technology that uses artificial intelligence (AI) to analyze billions of data records from all types of data sources, including flight data recorders, operational flight plans and Aircraft Communications Addressing and Reporting Systems (ACARS). This is then combined with environmental data from actual flight conditions (such as payload, weather conditions, Air Traffic Control, or ATC, constraints, etc.). The technology identifies the most relevant saving opportunities and provides a series of recommended actions which it claims can reduce total fuel consumption by up to 5%.

There are also improvements that can be made to existing aircraft design to drive fleet efficiencies. This mostly comes through the incremental introduction of enhancements (for example, wingtip, blended winglets, or increased wingspan) and improvements to engine efficiency.

None of these improvements will drive the industry to net zero, but they will all play a vital role in reducing emissions intensity of the aircraft and inch aviation further on its journey towards a more environmentally friendly future.

This is the broader picture in a nutshell. There are many exciting developments each with a part to play. Some will grab the headlines and appear to be futuristic leaps; others will go unremarked but are just as important.

“No one development can help the industry single-handedly. Instead aviation will look at multiple solutions and there are risks and barriers with each. Given the uncertainty, there has never been a more important time for insurers and other financial partners to support their clients as they take the steps necessary for a net zero future,” Fadden concludes.