British Airways' Anglo-Iberian owner International Consolidated Airlines Group SA (LSE:IAG) and other European airlines are going to need to spend a further €820bn (£721bn) to reach net zero emissions in the next three decades, industry experts have warned.
Airlines and airports will not be able to remain profitable and fund the transition to net zero unless they receive government support, according to a report commissioned by trade bodies Airlines for Europe and ACI Europe and carried out by SEO Amsterdam Economics and the Royal Netherlands Aerospace Centre.
With the airline sector, which accounts for about 3.8% of emissions in the EU, having committed to hitting net zero carbon emissions by 2050, this will require spending around €441bn on cleaner fuels derived from household waste, cooking oil or biofuel, the report said.
The report, which was first published in the FT, said airlines and airports will need support from governments if they are to pay for the climate transition and remain profitable.
“Since [profits] are historically low due to high levels of competition and compounded by recent crises, the absorption capacity by the sector, in particular that of European airlines and hubs is expected to be low,” the report said.
While the industry has called for governments to classify more energy-efficient newer aircraft as green investments under the EU's 'taxonomy for sustainable finance', environmental campaigners have criticised this potential move as greenwashing as these planes only slightly reduce emissions.