Decarbonizing Aviation with McKinsey - Robin Riedel Flashcards
I grew up in Germany in an aviation family. My father and grandfather were pilots, and so I got a bit of that early exposure and some of my earliest memories are looking over the fence at the airport at airplanes. And so I ended up spending most of my life, most professionally, a lot of it personally too, in aviation. So I became a pilot and learned how to fly large aircraft, certified on an Airbus, the A320 series aircraft.
I studied aerospace engineering at MIT, both undergrad and grad, to get an idea of building these systems. I worked for an airline for a while in baggage handling and kind of overseeing the whole ground operation processes for that airline. And then more recently, for the last decade or so, I’ve been at McKinsey and they have been an advisor to a larger number of aviation companies across the value chain from airports to airlines to OEMs. And so I like to say my whole life kind of evolves around airplanes.
17/01/24
15/02/24
To get started, how might we think about the carbon footprint of the aviation industry? Aviation today is roughly 2% to 3% of the overall carbon footprint of our society. That sounds like a pretty small number to start with, but you got to put that into context. First of all, it’s a small percentage of people in the world that create those 2% to 3%. And then this is a hard-to-abate sector, and so the 2 to 3% today could become 10, 15, 20% in the coming years as aviation keeps growing and as other sectors decarbonize.
Fuel is the largest issue really for aviation. More than 95% of the overall impact of the industry comes from burning fuels in jet engines or sometimes piston engines. Other things like running airports, operating plants to build aircraft, making the materials for aircraft. They’re meaningful topics, but in the grand scheme of things don’t really matter as much. And so it’s really aviation fuel that drives the big footprint.
Aviation has another interesting piece that comes with that because it’s not just about the carbon. It might be 2-3% of carbon, but aviation is operating at very high altitudes in the atmosphere. And so there’s other effects that aviation has on the climate and they’re not quite as well understood. But most studies kind of come up with factor of somewhere between 2-3x the impact when you take those factors into account.
This non-carbon effect implies the combustion of these engines at these high altitudes have a greater impact on warming. I think the non-carbon effects are things like contrails, so water vapor in the air that creates reflective behaviors in the air. It’s other emissions like soot that happens at a high altitude, which takes more time to settle. It also has different effect on the sunlight that comes through the atmosphere and other things. And so those things together are a pretty significant portion of aviation climate impact even though they’re not directly carbon related.
Aviation keeps growing globally and we’re growing pretty fast and it’s hard to abate. And so the relative carbon emissions are not going down quite as fast in other industries. And so if you play all of that forward, we’ll have other industries get greener and we have aviation growing pretty fast. And even though it gets more efficient, it doesn’t quite offset that growth. And so overall, aviation will capture more and more of the share. And it’s not crazy to think that by 2050, aviation could be 10, 15, even 20% of the climate impact because other sectors are kind of reducing their impact and aviation will continue to grow.
I think there is a general concern in society and the growing concern in society about the impact we’re having on climate. And so for airlines and airports and other aviation players, that is a big concern for a couple of reasons.
I think for one reason, your customers are starting to care. We do see other sectors where there’s a big move towards lower carbon products. Aviation has a bit of that. We have flight shaming as a phenomenon more in Europe than in the US. But people are getting more conscious about, do I really want to fly and have that impact? There’s government regulations coming into place. We see around policy quite a bit happening when it comes to mandates or other things in Europe. In France, they implemented a ban for certain type of regional flights if you can do it by train instead.
There’s a financial aspect too in the sense that investors are starting to look at this, and the cost of capital or the cost to lend money might depend on how green you might be in the future. And so there is a bit of thought around, how do we keep our investors on board and people willing to lend and invest in this business? And then last but not least, employees are a big factor as well. As society gets more conscious about the environment, employees are asking about the purpose and how well their companies are playing within the society.
Aviation is one of the few goods that has continuously gotten cheaper and cheaper. And of course, efficiency improvements have made that possible.
So if you look at the last, call it two decades or so, the Western world aviation has really reduced its fuel burn per passenger kilometer or per thousand passenger miles, whichever metric you want to use about by 3.5% per year, which is a pretty significant number. I mean, we’re getting better and better. We’re getting more efficient. And to your point, we’re doing that to save money, but it has this nice side effect that it’s good for the environment.
Fuel burn per passenger kilometer is a typical metric. The reason we look at fuel burn for passenger kilometer is it gives you kind of a unit metric. So it takes out the growth of the industry and looks at just the unit of production. But we also need, as you mentioned earlier, to think about the totality, what it all sums up to, given more and more passengers are flying. aviation has grown for many years at plus 5-7%. If you’re improving your efficiency rate at 3.5%, that’s nice, but it doesn’t offset that growth as an industry.
I think generally we look at about 5 different levers to decarbonize the industry at a high level. I think one is just better aircraft than rolling over the fleet. So you might’ve heard of the A320 Neo, or the 737MAX, also the latest airbus at Boeing aircraft. They’re about 15-20% more fuel efficient than the version before. And so as we’re rolling these new aircraft out to replace the older ones, we’re getting a 15-20% efficiency increase from a fuel perspective, and that definitely helps.
The second big lever are operational efficiency levers, including airspace. So we’ve all been in a holding pattern at some point, I’m sure, that burns unnecessary fuel. We’ve waited at an airport on the ground maybe for a gate to get ready, that burns unnecessarily fuel. So you put these things together. If we can get more efficiency on how we operate, maybe taxi was one engine instead of two, maybe not land with full flaps every time, maybe descent more continuously, all of those little things help. And so there is a few percentage points within just operating more efficiently as a second big lever.
Then we come to kind of the three big levers that really require what I would call innovation around them. So the first one of those, by far the largest lever towards 2050 is sustainable aviation fuel or SAF as we call it. And that is really just a way to create liquid hydrocarbons. So fuel that works with today’s engines, but not use of fossil source for these, but make them from either biomaterials or from carbon capture, and as a result, make it a circular fuel. That will be the third one.
The fourth lever is what I would call novel aircraft design and novel propulsion. This could be completely different aircrafts or blended wing bodies would be a topic here on the one hand, or different propulsion systems, mostly hydrogen or battery electric systems or even hybrid electric systems that people are talking about.
And then the last one is going to be offsets. Offsets is going to play a major role because even if we do all the other things, we’re not going to get to exactly zero with aviation, there’s always going to be a residual there. So if we want to get to net-zero, we’ll have to take advantage of offsets, whether that’s carbon capture or other things to bring it then to the net-zero part.
There’s a number of different things that make one generation of an aircraft more fuel efficient than the previous one. The biggest by far tends to be the propulsion system, so the engine. So if you think about what we’ve been able to do with engines over the last, call it 50 years, with jet engines, we’ve gotten to higher and higher bypass ratios, which makes them more efficient. It makes also the engine look a lot bigger, but it allows for more airflow through it in a more efficient way. We’ve also been able to raise the temperatures inside the core of these engines with new materials, better engineering off the materials, better cooling systems that has helped with efficiency.
The engine typically is the biggest driver of efficiency from one generation to the next. And then you have other things. We have been doing weight reduction on aircraft, right? So either using lighter materials or more, call it, crafty designs in order to minimize how much weight we carry around. And that directly helps the efficiency. And then there’s been aerodynamic inventions, for example, winglets, vortex generators, things like that that just make a better airframe design and a better aerodynamic performance. And then last but not least, I think digital is starting to play a much bigger role as well, just how the aircraft are being flown, the flight support systems. And so you put all of those things together with leading the pack here being the engines, all of that makes the new generation aircraft 15-20% better than the generation before.
When it goes to building large aircraft, there’s a limited number of main players doing it. So on the airframer side, you’ve got Airbus, Boeing, Embraer, now COMAC in China, but those are really the big players that built the big jets. And then on the engine side, Rolls-Royce, Pratt & Whitney, and GE are really the ones in the driver’s seat here.
And on the digital technologies, is that also these incumbents or are these startups who are trying to sell into these incumbents?
You still have many of the incumbents playing. So names there would be Honeywell for example, or also GE, for example, plays in that space. But you do start getting startups applying AI, new data sources, new ideas to come up with little pieces here and there that you can add onto the airframe or into your operation that help you optimize a little bit further out of these. And so even on the hardware side, by the way, you have some innovative companies that, for example, winglets, in many cases are done by third parties to retrofit aircraft later on in life. And so, there is both the big players but also a whole bunch of smaller players. For example, winglets, in many cases are done by third parties to retrofit aircraft later on in life.
I think on the real operating side, there’s just always ways to think about how can I optimize the trajectory and the use of the aircraft in order to be more fuel efficient, whether that’s minimizing delay minutes on the ground or delays in the air or flying at the optimal altitude, staying out of headwinds and using tailwinds, right? So there’s a number of these things that we’re operating in a constrained environment with other traffic and airspace constraint and noise abatement procedures. And so kind of managing that complexity and finding ways to more efficiently operate the aircraft is a big part of that. And that is both incumbents and startups and individual airlines and even individual pilots trying to figure out, “How can I squeeze a little bit more out of this and get more efficient?”
And then I think at the system level, to go to your point about load factor and seed density, if you’re really trying to optimize the unit emissions, so how much emissions do I have per seat kilometer flow or for flight from A to B, of course loading more people into an airplane gives you a better number there.
So seat density increases, so getting more people squeezed into the safe space is one lever to get there. Another one is to fill more seats. And both of those, of course over the last, call it a decade and a half or so, have been going up quite significantly. The emergence of low cost carriers, revenue management systems that better optimize the seat load and load factor, those are the kind of things that we do for commercial reasons in the airline industry, but they do have an impact on the environmental metrics.
That seems like it’s somehow the combination of the airline, the pilot you just mentioned. That’s interesting. And I presume the air traffic controllers also have something to say about your routing. So how do those three players, and maybe I’m missing some, combine forces to lead for the potential for more efficient routing?
The reality is I think we’re getting good at the operating side. The questions that remain are really some of forecasting. How can we get better at forecasting weather? So if I take off, what’s the weather going to be like five hours later? And therefore, if I know it’s not raining, I can take less fuel because I know I don’t need that buffer. Or how do I better forecast traffic so that I know what is the right time to arrive at the right speed to take in order to not end up in a waiting pattern? And so with the emergence of AI in the sector, I think we’re seeing quite a bit of innovation right now, in the effort to minimize fuel burn, which then as a result also minimizes emissions.
Sustainable aviation fuels today is really a category of many different solutions. We describe something as a sustainable aviation fuel, if it is a circular fuel in the sense that it captures the carbon and doesn’t rely on fossil source of carbon, but it captures the carbon early on and then you turn it into a liquid carbon, you can drop it into airplanes that fly today because it’s almost identical to the fuel we have today at least from a chemical perspective and then you burn it just like you burn fuel today.
Where do we capture the carbon and how do we create this fuel is where things vary. And there is dozens of different combinations of that. So we talk about the feedstock on the one hand, and that could be biological feedstock or it could be carbon capture. And then we talk about the pathway itself, which is really the chemical process. Do you then use to take that feedstock and turn that into a liquid hydrocarbon? And there is different ways to do this; require different capital intensity, require different types of processes, but in the end what comes out is that fuel.
I think where at an interesting time where we have dozens of these feedstock pathway combinations and the uncertainty around each of those is enough that we really can’t tell yet which one of these is going to be the lowest cost and the right solution. It’s very, very hard to say, “Here’s the one winner to pick.” And as a result as an industry, we have dozens of these things which are happily growing and moving towards demonstrating what they can do so that we can start narrowing down those uncertainties. I think that is a really interesting moment in time because we are going to have winners and losers decided over the next 5-10 years and it creates a ton of business opportunity for different players
The other thing that’s really interesting about this is that it’s probably going to differ regionally. And so you might have a region like Chile where there’s a lot of green electricity available from hydropower et cetera where power to liquid or e-fuels makes a ton of sense and they might even be an exporter of e-fuels in the future, versus there’s other areas like the Pacific Northwest in North America, for example, where you have a lot of biomass from the forestry industry or otherwise that could make sense in the pathway to convert. So it’s really kind of a local solution that we’ll need to find.
And since we talk about cost, that would be my last point of this. The cost of sustainable aviation fuels today is significantly higher than fossil fuels for aviation. Depending on the fuel you use, the pathway it feeds that combination, you’re looking at 2-3x of what fossil fuel is. Or convert that into dollars per ton of carbon abated, you’re talking somewhere around 500 plus or so dollars per ton abated. And that of course makes it challenging for airlines, but also other industry players to truly use this at scale because it would be economically non-viable. And so that’s what makes sustainable aviation fuel such an interesting topic right now to study because we have a whole bunch of challenges, but we also have the need to figure this out because this is the one pathway that’s going to really help us to get to 2050.
What does that mean in the context of a ticket? So a normal maybe $500 ticket to go coast to coast in the US. If all of a sudden airlines had to pay 2-3x more for fuel, and supposing they passed that along to the customer, what does that look like in terms of the ticket? Because ticket prices include lots of taxes and airport fees. So it’s not like the ticket would necessarily rise by 2-3x.
Let’s do the math together. Fuel today is roughly call it 30% of an airline’s cost base. And let’s say the mandate in Europe, for example, right now in the is 5% of SAF by 2030, and let’s say it’s just 2x the cost of fossil fuel just for the math here. So that is an increase in overall costs then for the airline of about 3%. You add the fees and taxes on top, so you’re really looking at a 1-2% increase if we get to 5% of sustainable aviation fuel, which is again the mandate for 2030 in Europe. If you went to 100%, of course all of a sudden you would have to take those 30% and double them. And so the increase in ticket price would be in the 20-ish percent range probably by that point. Aviation is one of those sectors which is very price sensitive in that if an airline changes its price by 2-3 percentage points up or down, you immediately see the demand reaction. People will buy more or less.
The other interesting thing about aviation is, is that aviation is a global industry, yet we have local regulation.
If you’re flying from let’s say Hamburg and Germany to some place in India, you could fly Lufthansa through Frankfurt and that is a German airline. And so the EU rules apply for both of those flights, the Hamburg-Frankfurt flight and then the Frankfurt-India flight. Or you could fly Turkish Airlines, which would fly Hamburg to Istanbul and then Istanbul to India. So Hamburg to Istanbul, Istanbul to India. Well, for Turkish Airlines, because they’re not in the EU, they wouldn’t have the same mandate on the second flight, the Istanbul to India flight. And so you could see how there’s not a level playing field if we don’t harmonize some of these requirements around the globe and some of these policies. And it is a global industry. And so competition gets kind of, for lack of better words, torn into different ways when we don’t have that of a playing field.
Why is sustainable aviation fuel so attractive compared to other fuels?
Sustainable aviation fuel has the big benefit that it’s a drop-in fuel as we call it. Drop in fuel really just means you can drop it into today’s fuel tanks and it works the same way, whether it’s on the airport or in the aircraft engine. And so from a chemical perspective, it’s pretty much identical to the fossil fuel we use today. And so the aircraft engines can use it the same way, so we don’t need to change the airplanes. We also don’t have to change the airport infrastructure. And that is a big benefit because we don’t have to change every airport and every aircraft out there.
Every aircraft that rolls out of a Airbus or Boeing factory today is still got to be around in 2050. If we had to change them, and we’ve done the math on this, we would’ve to spend about $1.8 trillion in riding off early retirement of aircraft. Economically, that doesn’t make sense. And so sustainable aviation fuels is the pathway to preserve some of these aircraft out there and keep them flying and keep them to their useful life without having the aviation emissions impact that they have today.
Let’s talk about the novel propulsion, the fourth dimension. You’ve mentioned earlier, blended wing bodies. I don’t know what that is. And then you also talked about hydrogen and battery solutions. Now, batteries I thought were off the table when it came to airlines because they don’t have nearly the same energy density that liquid fuels do. But you mentioned batteries, so maybe we could start there. What application could you imagine batteries being used for in aviation?
I think batteries are significantly heavier for the same energy content than fossil fuels or any kind of liquid hydrocarbon fuels. And so the problem we had something heavy in aviation is that we’re always fighting gravity. And so it takes energy to carry weight. And so when you carry something heavy, you burn a lot of energy. And so, batteries, as you want to fly with them, you need a lot of energy to carry them. You can’t have a lot of energy inside of them. And so you’re really range restricted, meaning how far you can fly when you think about battery aircraft.
In today’s batteries which have around 200-watt hours per kilogram or so in terms of gravimetric density, that means you can probably fly 100 to 200, maybe 300 miles operationally depending on the aircraft design, but that’s about it. After that, if you add more battery to fly further, what happens is the weight that you’re adding requires all the energy that you’re adding. And so you’re not actually gaining any more distance because you’re fighting gravity.
I think there is a whole bunch of short range aviation opportunities, and this is new type of aviation. You might’ve heard about EV tolls, electric vertical takeoff and landing aircraft, flying cars, so to speak. That is one application. Drones, whether it’s delivery drones or cargo drones on shorter distances is another application. Or even just regional aircraft that fly shorter distances, there is an application there. And there’s a range of startups that are building these aircraft or working on solutions for that. And so there is this whole area of advanced air mobility or regional air mobility emerging, which will heavily use battery-electric aircraft.
I think the second area for batteries of application is hybrid aircraft. And so the thing with an aircraft today is we really give the engines a very challenging task in that we tell the engines, “Look, you should be efficient when running at cruise power, but you also need to be able to do takeoff and landings, which requires a lot more power. And by the way, we want you to be redundant.” So on a two-engine airplane, we need each engine alone to be able to carry the whole airplane in case one fails.
So what batteries now allow us is to think about how do we design maybe a combustion engine that is very efficient but only works at one design point and we augment the other design points, whether it’s the takeoff and landing or the emergency situations with a battery system that can kind of provide the required power but without impacting the efficiency of the engine. This is a topic that both incumbents and startups are working on hybrid electric aircraft engines, and that could even be on larger aircraft.
And then the last thing I would mention is look, technology continues to advance. And even though we’re maybe 200-watt hours per kilogram today, maybe there is a breakthrough in the chemistry, maybe there is a breakthrough in other technology and we get to 1,000-watt hours per kilogram in the next decade or so. And if that happens, all of the sudden instead of only doing 200 or 300 mile range, you could do a thousand miles, which covers a lot of the flying that happens today.
Volume is also an issue, but less so for batteries. I mean, volume is really the issue for hydrogen. Because the interesting thing about hydrogen is, hydrogen is super light, but it’s not very dense from a volume perspective. And so on the one end, you have batteries’ really heavy, on the other end you have hydrogen really light, and then you’ve got liquid hydrocarbons, which is somewhere in the middle and kind of outperform in the combined space.
So we’ve talked a lot about batteries. In the hydrogen space, is that the primary issue that we can’t compress it enough for it to be useful yet in an aircraft setting?
Hydrogen is a promising pathway. I think one big challenge is the storage of hydrogen. How are we going to store it? Especially remember an airplane goes from ground level, sea level, up to 30,000 feet where the pressure and temperatures are very different. So building a vessel that can contain the hydrogen in those changing environments and contain a lot of it, which means it’s probably liquefied or under high pressure, is not a trivial thing. And so research shows that the technologies we have today to build these tanks is actually quite heavy. And so the benefit you get from having hydrogen being quite light gets somewhat eaten up by having to build a really heavy and bulky tank. The beauty of today’s airplanes is the liquid fuel kind of goes in wherever you want it to go, and so you could put it into the wings. That’s where it is in today’s airplanes. It’s not so easy to do that with hydrogen because the tanks just have a different shape. So tanks is one big question.
Another big question is where do we get the hydrogen from? I know there’s a lot of people thinking about, “Hey, hydrogen industry overall, we’ll get to a dollar per kilogram of green hydrogen or so on.” But we’re nowhere close to be there yet. And if we think about the electricity that’s going to be required to make hydrogen through electrolyzers and others and then to liquefy it or to put it under pressure, it’s not a trivial problem to solve on where do we get the hydrogen from.
And then there’s kind of two different ways to use hydrogen aviation. You could use it either for combustion, so you burn it in an engine just like we do with liquid fuels today, or you run it through a hydrogen fuel cell to create electricity and then run kind of an electric motor from it. And so both those technologies, there’s a lot of work being done on to see how efficient can we really get and how light can we really get? Because again, weight is always the problem of aviation.
I won’t sleep well tonight if I don’t understand what a blended wing body is. So tell us about that. This is a novel design? Probably over more 80 plus years, airplanes have looked the same. They’re a tube with wings attached, and then you just throw a couple of engines either under the wing or on the back of the fuselage. What we’re talking about now is building different types of configurations, so different shapes of aircraft. And what makes that possible is on the one hand, digital today and analytics allows us to study these things much better than we could in the past. And then we have new materials, whether it’s carbon fiber or eventually thermoplastics and others, to build things slightly different. And so from a manufacturing perspective, we’re getting to a point where we can build different types of aircraft.
And so you see a few programs out there, whether it’s a trust-based wing, whether it is a blended wing body that just look nothing like the airplanes you’re used to. They’re just different kind of shapes with different kind of efficiencies. And so a blended wing body is basically, imagine your airplane today, you get rid of the fuselage in the middle, and what remains is just the wing. And so you put the passengers and the cargo and the fuel, everything, inside the wing, and it’s basically just one big flying wing.
That comes with some challenges around how do you maneuver in an airport environment. It comes with some challenges around people won’t have windows to the same degree they have on airplanes today. It comes with some challenges about how do we truly design this and make it pressurized and all of those things. But it is something now that we’re seriously investigating.
In the past, this was kind of a military application, the B-2 bomber would be an example of that. But we’re now thinking about doing that for passenger flight. And you could imagine a 20, 30, even 40% efficiency improvement if you got that right, versus the airplanes we’re flying today just because it’s aerodynamically better.
So the last lever was carbon offsets or carbon credits, and I wanted to talk to you about that. It seems to me like there’s maybe two things to talk about here. One is that airlines themselves have been purchasing carbon credits as part of their carbon reduction or net-zero goals. And then also a growing number of them are offering customers the opportunity to purchase carbon credits sort of as you check out on their websites. So I wonder if you can speak a little bit about this sort of dual strategy and who are the leaders in this space and what challenges they’re facing. And we’ll make sure to talk about a recent lawsuit that’s just arisen against Delta Airlines for their carbon-neutral claims.
It’s a complicated topic with a lot of things to unpack. So let’s start with why do we going to need carbon offsets for aviation? I think the reality is even if we pull all the levers, even if it would fly with 100% SAF, we’re getting to a point where SAF in itself is never 100% offsetting in itself. There’s always residuals, even if you have a good SAF today that’s about 85%. So you have that residual of 15%, which is still there. And so that’s where kind of offsets come in. And it’s more likely than not that we’re not going to ramp up SAF supply quite as fast as we need. And so carbon offsets might provide that buffer while we’re kind of ramping up SAF supply.
And in the offset world, there’s a broad range of different solutions. You have anywhere from nature-based solutions to technology-based solution of capturing carbon from the air. They come with different qualities. So it’s still an industry that’s kind of emerging. And so I think airlines overall are cautiously experimenting in figuring out how do we deal with that? What do we want to buy? What do we want to pass on to our customers? Because the customers are concerned, whether it’s individuals or corporations about the carbon footprint.
There’s a big European airline (Lufthansa) that has green fares now where they’re truly offsetting your whole footprint if you buy one of those green fares. They’re more expensive than the standard fares, but you’re doing the right thing. Other airlines offer a click-through process on the website and the booking flow to be like, “Hey, do you want to buy some offsets to offset your footprint?”
It’s always risky if there is no ”clear accounting f’amework on what counts or what quality do you have. And so some traps are out there that might be accused of greenwashing when you do some of these things.
A lot of airlines have started to offer some sort of either offset or purchasing SAF through their website in this experimentation that is partially because there’s startups out there who’ve made this really easy to put that widget on the website to allow the process to go through. Airlines are generally trying to figure out the roles they want to play here. There’s this interesting question around individual consumers. If you ask them, and we run surveys every year on this, most people will actually say, “Hey, I’m worried about this and I’m willing to pay a little bit more.” Yet we’re not quite seeing that reflect in behavior. So it’s a stated preference revealed action kind of challenge. So individual travelers to be seen when they really take up on that.
Corporate customers is a more interesting bucket right now, because corporations in a way have in many cases made their own statements around when they want to read an net-zero and what they want to do about their missions. And for many places, travel emissions, business travel of the employees, is one of the largest sources. So if you are a large professional services company or large technology company and you fly people all over the globe as part of your work, you have some real emissions coming in as Scope 3 from this flying around that you’ll have to deal with. And so airlines are trying to figure out how do we help our corporate customers continue to fly? Because the alternative is they stop flying, which is not really what airlines want.
You’re a partner in an aviation practice at McKinsey. What are the types of projects that you work on? And so I’ve been fortunate to be able to play across the value chain with a number of different players to help them think that through.
I’ve worked with airlines that are trying to figure out, “What should be my pathway, what should I be willing to commit to? And then what are the things I need to do to get there? Do I need to think about my fleet renewal differently? Do I need to start buying SAF? Do I need to build a corporate customer program so people can buy SAF through me? How do I think about operational efficiency? Do I need to train my pilots differently?” And so we get to help airlines build that strategy and then also execute it, like building a SAF sales program internally or building an operational efficiency program. So that’s kind of the airline bucket.
There is the OEM bucket. OEMs are on the one hand worried about, “Hey, if aviation gets somehow damped by environmental concerns, what does that mean to our business in the future and how can we minimize that risk? And then on the other hand, how do we stop disruption from other technologies?” And so if you’re a big aerospace OEM today, you might be feeling good about the product you have, but you might say, “Okay, we’re having all these startups planning to build hydrogen and battery electric aircraft. And while many might not make it, some of them might, and then could that be a big disruption to my industry?” So there’s strategic questions for incumbents around that.
