Mentor Name
Dr Somi Shin
Course Title
Intro to Research Methods
Course Number
RSCH 202
Submitting Campus
Worldwide
Student Status
Undergraduate
Project Abstract
IATA's 2050 net-zero emissions target is expected to pose significant financial challenges for airlines due to the high implementation costs and the expense of Sustainable Aviation Fuel (SAF). To remain competitive, this research advocates for the gradual adoption of SAF through a blended approach with Traditional Aviation Fuel (TAF). Incrementally increasing the SAF blend over time allows airlines to recover initial implementation costs while progressively raising the SAF percentage. This research aims to develop a formula to help airlines calculate the ideal SAF-to-TAF blend ratio for maintaining profitability. Key factors considered in the formula include SAF and TAF prices, carbon taxes, government subsidies, and passengers’ willingness to pay a premium for sustainability. Preliminary regression analysis suggests that implementing SAF positively impacts airline profits, though the effect diminishes as the SAF blend increases. Conversely, TAF prices appear to have no significant effect on profitability, likely due to their price stability. While these results are preliminary, the model shows promise as a useful tool for airlines, provided the input data is tailored to their specific conditions.
