2023-06-27 02:00:43
Aviation biofuels (SAF) are right now the fastest route for the sector to meet its decarbonisation obligations. The Fit for 55 – the European plan for the ecological transition – establishes that, in 2050, 70% of the fuel for aircraft will have to be from SAF. But, at the current production rate, it will be difficult to have enough fuel of this type to meet that goal. And at a reasonable price. Right now, SAF is three to four times more expensive than kerosene. And if its production is not promoted to scale up technologies and thus lower its price, the consequences can be paid by consumers. “We do not consume more SAF because there is little and it is very expensive,” said the CEO of IAG, Luis Gallego, yesterday. For the chief executive of the Iberia, Vueling and Level holding company, it is crucial to give a boost to this industry because “if we do not produce cheaper SAF, that will impact tickets and flying will be an activity that few will be able to afford.”
Potential
Iberia and Vueling published a study commissioned to PwC last week in which they ensured that if Spain bets decisively on this industry, it could reach a SAF production of 62.22 million tons in 2050 and create a sector that would generate 270,000 new jobs and would contribute 56,000 million to Spanish GDP. To do this, it would have to raise between 35 and 40 plants, for which some 22,000 million euros would be needed, for which European funds could well be used, according to these airlines.
IAG impact
Gallego insisted on this commitment yesterday during the presentation of another PwC study, in this case on the impact of IAG’s activity in Spain. The report ensures that Iberia, British Airways, Vueling and Aer Lingus contributed with their activity 21,500 million in the country’s GDP and 371,000 full-time jobs in 2019.
Aviation, Gallego insisted, is the engine of tourism, an activity that, in the case of Spain, represents 12% of its GDP. For this reason, from IAG they consider that the “hub” of the Adolfo Suárez Madrid-Barajas airport is “critical” for Spain. And for this reason, he also defended, they are carrying out the Air Europa operation, “to be stronger in the” hub “of Madrid, to be able to contribute more to the economy.” The CEO of IAG assured that they have not calculated the impact in the terms of the report presented today that the incorporation of the Globalia Group airline to its structure would have. But what he is clear about is that “a bigger hub would make it possible to have more routes, more income, more employment…”. In this sense, Gallego explained that it is important for Barajas to gain size with this operation because, if not, it will not be able to become a 360-degree “hub” that also looks towards Asia to compete with other large European airports such as Frankfurt, Heathrow or Paris-Charles De Gaulle.
Gallego did not want to reveal many details regarding the conversations they are having with the European competition authorities about the operation of Air Europa and limited himself to acknowledging that “we know that there are some routes where we will have to offer “remedies”, and there are different airlines that could operate. And Ryanair could be one of them. We are open to everything”, he explained when asked about the Irish company’s interest in operating these routes.
TAP
The CEO of IAG was not much more specific when asked about the holding’s interest in the Portuguese TAP. Gallego repeated again that they will study the operation and that they would only consider undertaking it “if it suits us.” “If we were interested in the privatization conditions of the Portuguese government, it may make sense because of the access to the Brazilian market and to some African countries where we do not have a presence,” he assured. The chief executive of IAG wanted to clear up in any case the doubts that have arisen in Portugal about the possibility that IAG was tempted to weaken the Lisbon “hub” if it undertakes the purchase of TAP. “All the companies we have bought have grown,” he said, citing Aer Lingus as an example, whose flagship airport, Dublin, has not weakened in favor of other Britons some feared.
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