Air Transport: Strategic Challenges of Landing Within Planetary Limits?

In 2025, air traffic is expected to reach 5.2 billion passengers and 1,000 billion dollars in revenue^[1]. The industry predicts that the The number of air passengers will double within the next 20 years (2043), with annual growth of +3.6% per year^[2].

How can the sector decarbonize and pursue a path consistent with the Paris Agreement while maintaining such growth? What are the main risks associated with the transition to a low-carbon economy?

General Framework for Decarbonizing the Aviation Sector

To limit global warming to below +2°C (Paris Agreement), the UN’s Intergovernmental Panel on Climate Change (IPCC)^[3] has set global carbon budgets, specifying the maximum amount of CO₂ that humanity can emit^[4].

The aviation sector is a special case. While domestic flights are included in the national commitments, this is not in the case of international flights (60% of the sector's emissions^[5]). The latter are therefore outside the scope of the Paris Agreement. The UN has entrusted ICAO with^[6] the responsibility for regulating these emissions through the mechanism CORSIA^[7]. But this system, based on the carbon offsetting is largely insufficient to align the sector with the objectives (see question 6 of our Aviation FAQ).

Allocating a carbon budget to aviation is essential for assessing its trajectory in relation to global goals. The share allocated to it is a matter of choice politics which involves determining the level of effort the sector must make relative to other sectors. If the aviation industry keeps pace with the decarbonization efforts of the rest of the economy, this would allow it to emit between 10 GtCO₂(to limit global warming to +1.5°C) and 23 GtCO₂^[8] (for +2°C) of emissions between 2020 and 2050. These budgets correspond, respectively, to only 9 years of broadcasts at the current level for the +1.5°C scenario and about 20 years for the +2°C scenario. This constraint makes a profound transformation of the airline industry essential.

What decarbonization measures are available to the aviation sector?

The decarbonization of the aviation sector can be analyzed through Kaya's equation, which breaks down emissions into three main factors: energy efficiency, carbon intensity, and traffic volume.

Energy efficiency—a necessary but largely insufficient measure that is likely to trigger a rebound effect.

While technological advances have significantly reduced aircraft energy consumption per passenger, the fleet renewal remains the main driver in the short to medium term (by 2035). New-generation aircraft, which have been available since 2017, consume 15 to 25% less fuel^[9] than the previous generation, but they still account for only a quarter of the global fleet^[10]. Thus, renewal will be a key factor, but constrained by the production capacity of aircraft manufacturers^[11] and the global fleet growth. In fact, more than one out of every two new aircraft is added to the existing fleet to meet the growing demand for air travel^[12].

By 2035 and if there are no delays, the next generation of aircraft (the successor to the A320) could further improve the fuel efficiency of 25 to 30% compared to the latest available generation^[13] thanks to more powerful engines, improved aerodynamics, and lighter structures.

However, the pace of fleet renewal will limit the impact on the sector’s decarbonization by 2050. In fact, it will take about ten years after 2050 so that the entire global fleet will phase out the 2017 generation^[14] !

Carbon intensity—a key driver, but one that faces challenges related to scaling up and the cost of these sustainable fuels

The aviation industry is exploring several alternatives to replace fossil jet fuel: hydrogen, electricity, and sustainable aviation fuels (SAF).

Electric and hydrogen-powered aircraft are promising technologies, but they will remain niche by 2050. These technologies would be limited primarily to regional aviation, which accounts for 6% of the sector’s emissions^[15]. Originally scheduled for 2035, Airbus acknowledges that progress has been “slower than expected”^[16] for the hydrogen-powered plane and has postponed the project indefinitely.

SAFs^[17] are a more promising solution, but one that will remain limited by scalability. They fall into two main categories:

1. Advanced Biofuels (2 of^nde generation, produced mainly from biomass residues). Their availability will remain limited: the Academy of Technologies estimates that, even under a proactive scenario, they could cover only 20% of the sector's needs in 2050^[18].
2. Synthetic fuels, or e-fuels (produced from electricity, hydrogen, and carbon). Their deployment potential is greater, but would require significant consumption of decarbonized electricity. According to the AAE^[19], to meet the 70% SAF quota mandated by RefuelEU by 2050, assuming “moderate” traffic growth, Europe will need to mobilize ~650 TWh/a year, or the equivalent of 60 nuclear reactors. That is more than France's current annual electricity production and could amount to ~11% of European electricity consumption in 2050. Finally, their costs would be approximately three times as expensive than current kerosene. This is mainly due to their heavy reliance on the cost of carbon-free electricity and their very low energy efficiency (it takes about twice as much energy electricity required to produce e-fuel (in addition to the energy it contains) as well as the investment costs required for production infrastructure.

Today, SAF production remains marginal and struggling to take off: approximately 1 million metric tons in 2024, that is 0.3% of consumption total kerosene^[20], well below industry forecasts. Aviation industry executives themselves estimate European goals are unrealistic sustainable fuels^[21].

Traffic as an adjustment variable for staying within planetary boundaries

The graph below illustrates the contribution some various levers Decarbonization of air transport between 2019 and 2050: technological advancements, load factors, operational optimizations, and the deployment of sustainable aviation fuels (SAF)^[22]. The blue curve represents trends in emissionsin an optimistic deployment scenario for these various levers with a Traffic growth remained steady at 3.6% per year. This remains significantly higher than the red curve, which represents the emissions cap compatible with limiting global warming to +2°C. This confirms that, despite ambitious technological and operational efforts, It will be impossible to meet climate goals without also addressing the growth of air traffic itself (shown in gray on the graph), a tool that is now essential for meeting the sector’s carbon constraints.

We then moved on to the traffic growth factor in our model in order to match this red curve. Keeping the other parameters unchanged, To achieve this, we must limit that growth to +0.75% per year through 2050.

To limit this growth in traffic, several categories of measures—ranging from regulatory measures to new technologies—should be explored:

• Behavioral Change : by developing local tourism models, regulating advertising—for example—banning flights where a train alternative takes less than 4 hours and 30 minutes, implementing individual quotas, or eliminating airline frequent-flyer programs;
• Price Signal : The gradual shift to more expensive sustainable aviation fuel will have a significant impact on ticket prices. However, this can be complemented by several other measures, such as: increasing certain taxes on long-haul flights, ending the VAT exemption, a “frequent flyer” tax, a kerosene tax, extending ETS allowances to non-European flights, incorporating non-CO₂ effects into the ETS, and a minimum price based on a carbon price…

An Analysis of the Risks and Opportunities Associated with the Energy Transition That Could Affect Players in the Aviation Industry in a Scenario of Slower Traffic Growth

In a world where the growth from the traffic air would be limited to comply with the constraintsclimatic, the aerospace value chain must anticipate the transformations of its business model. Far from sounding the death knell for the industry, this context reveals economic leeway important.

The models presented above show that a a realistic combination of technological levers and a mastery of the traffic growth would make it possible to maintain a a volume of business at least comparable to today's.The aviation industry is therefore not “in danger,” but it must accelerate its decarbonization roadmap and break away from the paradigm of traffic growth at a rate of 3.6% per year—a rate viewed as absolutely necessary for its survival, without which it would decline.

For the aircraft manufacturers and suppliers in the value chain, the current production capacity was designed to meet both the need for fleet renewal and traffic growth simultaneously. In a scenario of controlled growth, following an initial phase aimed at replacing the older fleet, The number of new aircraft produced annually is expected to stabilize at a level equivalent to today's^[23]. This development by no means signals the demise of the industry, but rather maturity of an industrial sector.

Climate change poses a strategic opportunity for European aircraft manufacturers. As part of the development of the successor to the A320 family, it could enable the industry to maintain a technological edge and create a decisive competitive advantage over Chinese and American manufacturers. These environmental innovations thus serve as a driving force for fleet differentiation and renewal.

For the airlines, the integration of sustainable aviation fuels (SAF) will result in higher operating costs, which may raise ticket prices and thereby help control the growth in traffic. However, without deliberate action to increase supply, availability will remain insufficient in many regions of the world. An energy transition multi-speed could then lead to distortions competition from non-European airlines whose home countries have not signed binding agreements on decarbonization. This situation could undermine the stakeholders involved in the transition, even though the European Union has regulatory tools to address these imbalances. Airlines that have not invested in newer, more fuel-efficient fleets after 2035 could see a significant increase from their operating costs, especially if a higher carbon tax on jet fuel were implemented. Optimization of In-Flight Operations will then become a fundamental issue and a key element of a major competitive advantage.

Finally, the airport operators will have to adapt to these new constraints. Slower traffic growth would reduce the economic viability of airport expansion projects, which would make it difficult for them to remain viable. Furthermore, airports must prepare for an increase in the frequency and intensity of extreme weather events. Between 10 and 20% of the roads global airlines will be at risk of disruption by 2100 due to rising sea levels, which pose a serious risk to airports^[24].

In light of these transition risks, it would be crucial for industry stakeholders toadapt their industrial and commercial strategies. Their ability to anticipate change, invest in low-carbon technologies, and transform their business models will become a key factor in their resilience as they strive to remain competitive in a world that is, for better or worse, trying to meet the goals of the Paris Agreement.

Conclusion

Air travel is currently at a historic crossroads. Despite technological advances and efforts to improve energy efficiency, it is clear that sustained growth of 3.6% per year remains fundamentally incompatible with the goals of the Paris Agreement. The carbon budgets allocated to the sector call for a profound transformation which goes beyond simply relying on technical innovations.

This reality does not spell doom for the aviation industry—far from it. A carefully balanced combination of technological innovations, the adoption of sustainable fuels, and moderating traffic growth would make it possible to maintain a volume of business at least comparable to today's level. European industry can take advantage of the transition to strengthen its competitive advantage.

The low-carbon transition therefore requires a fundamental rebalancing : between growth ambitions and planetary limits, between technological progress and moderation, between competitiveness and equity. Without this awareness, the sector could face breaks far more brutal than the ones he is trying to avoid today. The question, therefore, is no longer whether this transformation will take place, but whether we will shape it or simply endure it.