WestJet CEO speaks on decision to wind down Sunwing Airlines and Swoop
The CEO of Canada's second-largest airline says the global push to decarbonize the aviation sector by 2050 will lead to a major increase in ticket prices unless governments step in to offer support.
Alexis von Hoensbroech, the CEO of WestJet, made the comments Tuesday at the 24th World Petroleum Congress, a major international oil-and-gas conference being held in Calgary this week.
The theme of the conference is the energy transition and the growing pressure on the fossil fuel sector to address its role in climate change.
Von Hoensbroech said while it may seem odd for an airline to be a featured presenter at an oil and gas conference, airlines are dependent on fossil fuels.
WestJet, for example — which is headquartered in Calgary — is actually the single biggest consumer of petroleum products in the oil-producing province of Alberta, spending upwards of $1 billion annually on jet fuel, von Hoensbroech said.
The global aviation industry itself is responsible for approximately three per cent of greenhouse gas emissions worldwide. In 2021, the International Air Transport Association (IATA) — which represents 300 airlines, including WestJet — committed to reaching net zero by 2050, in line with the Paris Agreement global climate treaty.
But von Hoensbroech said while WestJet and other airlines are investing billions in fleet improvements and energy efficiency to reduce their environmental impact, getting to net zero by 2050 will be a major challenge. Electric or hydrogen-powered planes remain a long way from becoming reality, making the aviation sector one of the hardest to decarbonize.
"The last barrel of hydrocarbons produced on this planet are likely to be burned in a jet engine," von Hoensbroech said at the conference.
Right now, the industry is putting its hopes in what it calls sustainable aviation fuel, or SAF, a low-carbon fuel made from renewable materials such as used cooking oils or organic waste.
SAF is a drop-in fuel, meaning it works with existing aircraft engines, but it is currently five times as expensive as traditional jet fuel. In an interview Tuesday, Von Hoensbroech said he likes to compare it to a "pharmacy product," something that is "mixed in a lab and sold in small quantities at high prices."
If the global aviation industry is to reach net-zero using SAF, the industry will have to rapidly scale up. In 2022, global SAF production is estimated to have been 300 and 450 million litres, covering less than one per cent of total jet fuel demand. (Sustainable aviation fuel isn't being produced at the commercial level in Canada at all.)
IATA believes the airline industry could require 450 billion litres of SAF annually by 2050 if it is to achieve its emissions reduction targets.
But von Hoensbroech said to get there, governments will need to provide financial incentives both to refiners to produce the product, and to airlines to use it. While the U.S. has already provided a tax credit to support fuel makers and airlines that use SAF, Canada has no similar program.
Von Hoensbroech acknowledged that there are those who suggest that the fastest way to decarbonize the aviation sector is simply to encourage people to fly less. But he said global demand for air travel is expected to grow, not shrink, in the coming decades.
"The way to net zero is not to fly less. The way to net zero is to make flying sustainable," he said.
He added that in Canada, if governments don't step in to help the aviation sector transition to lower-carbon fuels, the cost of those fuels will make air travel cost prohibitive for many.
"Canada needs air travel more than other countries (because of its geography)," von Hoensbroech said.
"This country should make sure it does not cut off the lifeline to the outside world for thousands of communities."