Airline industry has clear path to net zero in 2050, but prices will be higher - IATA head

WATCH: IATA's Willie Walsh speaks to CGTN Europe about the future of aviation

Airlines will continue their drive towards green and sustainable flying but warn that, despite predicting their first industry-wide profit since 2019 next year, travelers must be prepared to pay higher prices.

That's the warning from the director general of the International Air Transport Association (IATA) after new figures stated the airline sector returned to profitability in 2023, with net profit expected at $23.3 billion before reaching $25.7 billion next year.

"We're absolutely determined to hit that net zero in 2050," IATA's Willie Walsh told CGTN Europe. "Sustainability is the number one agenda item, for I think pretty much every airline around the world now, given the focus on the environment. We have a clear pathway as an industry to net zero in 2050. It's going to be very challenging and it is going to be expensive."

At the end of November, Virgin operated its first transatlantic flight by a large passenger plane powered only by sustainable aviation fuel, highlighting the potential of the aviation industry to use low carbon options to reduce emissions and secure its future.

Walsh, who became the eighth person to lead IATA in April 2021, said the industry would become "heavily dependent on sustainable aviation fuel," adding that it costs around 2.8 percent more than traditional jet kerosene. 

"You've got a clear determination by the industry to achieve long term sustainability," Walsh said. "Given that fuel is the single biggest element of an airline's cost base and this year and next year it will represent about 31 percent of costs for the industry on average, that clearly will increase as we transition to more sustainable fuel. 

"That's going to put a bit of a challenge in the way of airlines to continue to grow at the pace we have seen. So we do see growth levels for the industry moderating a little bit. We believe that people will still fly, but it is going to become more expensive because anything that increases the cost of fuel for the airline ultimately will have to be passed through to consumers in the form of higher ticket prices."

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The global airline sector has largely recovered from Covid, which saw planes grounded and travelers reluctant to fly, as demand has boomed across North America, the Middle East and Europe. There was also a huge boost with China announcing people from France, Germany, Italy, the Netherlands, Spain and Malaysia can visit without a visa.

"When you consider where the industry has come from, I think it's a fantastic achievement to be back in profit and to be upgrading the profit forecast," Walsh said.

China, where international travel is still 40 percent below pre-pandemic levels, is set to turn a profit again in 2024. On the country's visa-free travel rules, he added: "This is a great development. Being able to travel without visa in this day and age really does make a difference. 

"People have so many choices as to where they go, applying for and in some case, going through the process of handing in your passport to get a visa discourages people from traveling. So more and more, we are seeing countries relax their visa regulations. And that is certainly making it more attractive for people to travel to these countries. 

"So longer term, we believe that transitioning to an electronic visa system, if visas are required or indeed travel without visa will make a big difference to where people travel to. And certainly that's evidenced by the travel patterns that we're witnessing in the current environment." 

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