The Impact of SAF in Aviation: Sustainability and Cost Management in Airlines

Commercial aviation faces an unprecedented challenge in the 21st century: decarbonizing operations without compromising economic viability. In a sector where fuel represents 20% to 30% of total OPEX, the emergence of SAF—more expensive, more complex to produce, and still scarce—is reshaping airline cost structures. Understanding the balance between sustainability, regulation, and profitability is now an essential competency for any aviation management professional.

What Is SAF in Aviation? Definition and Origin

What do the initials SAF mean for airlines?

SAF stands for Sustainable Aviation Fuel. It is a liquid fuel certified by IATA and ICAO that can be used in commercial aircraft without modifying engines or infrastructure.

It is not a brand, nor a product from a specific country, nor an experimental fuel. It is a global standard, regulated and validated by international bodies, encompassing different production technologies with a common goal: reducing the aviation sector’s net CO₂ emissions.

SAF emerged as a response to three major pressures:

• Regulatory: CORSIA, the EU ETS, ReFuelEU Aviation.
• Corporate: Net Zero 2050 commitments from airlines and airports.
• Social and reputational: pressure from investors, governments, and passengers.

In this context, SAF becomes the most immediate tool for reducing emissions without replacing fleets or redesigning airport infrastructure.

How does SAF work and how many types exist?

SAF is a “drop‑in” fuel: it can be blended with Jet A‑1 and used in existing engines without modifications. There are two major families: bio‑based SAF and synthetic SAF (e‑fuels).

The two main categories are:

1. Bio‑based SAF

Produced from feedstocks such as:

• Used cooking oils (UCO)
• Agricultural residues
• Lignocellulosic biomass
• Animal fats
• Municipal solid waste

Its advantage is technological maturity, but its limitation is the availability of sustainable feedstock.

2. Synthetic SAF or e‑fuels (Power‑to‑Liquid)

Produced by combining:

• Green hydrogen (electrolysis powered by renewable energy)
• Captured CO₂ (from industrial processes or direct air capture)

Its lifecycle can be nearly carbon‑neutral, but production is extremely costly and requires large amounts of renewable energy.

Both types must comply with ASTM D7566 certification, ensuring compatibility with modern turbines and operational safety.

Sustainability in Airlines: Advantages and Disadvantages of SAF

What are the advantages of SAF?

SAF can reduce lifecycle CO₂ emissions by up to 80%, requires no changes to engines or airports, and supports circular‑economy models.

• Significant emissions reduction compared to Jet A‑1.
• Full compatibility with existing infrastructure (drop‑in technology).
• Supports circular economy through waste‑based feedstocks.
• Direct contribution to CORSIA and Net Zero 2050 targets.
• Greater energy resilience through fuel diversification.
• Reputational benefits and alignment with ESG criteria.

SAF also helps airlines avoid penalties in regulated markets and access tax incentives in regions such as the EU and the United States.

What are the disadvantages of SAF?

The main disadvantage of SAF is its price: it currently costs 2 to 4 times more than traditional kerosene, and global production is insufficient.

• Much higher cost than Jet A‑1, directly impacting operating margins.
• Production scarcity: SAF represents less than 1% of aviation fuel consumption.
• Dependence on limited or costly feedstocks.
• Regulatory uncertainty and lack of global harmonization.
• Need for long‑term offtake agreements to secure supply.
• Insufficient large‑scale production infrastructure.

The real challenge is that demand will grow faster than supply, keeping prices high for at least the next decade.

Fuel Cost Management in the SAF Era

Fuel is the financial core of an airline. In an environment where Jet A‑1 already accounts for 20% to 30% of OPEX, introducing a fuel that costs two to four times more forces a complete reconfiguration of cost structures.

The impact of SAF on CASK (Cost per Available Seat‑Kilometer)

CASK is the key competitiveness indicator in aviation. SAF directly affects:

• Operational CASK
• Fuel‑adjusted CASK
• Regulatory CASK (green taxes, ETS, CORSIA)

A 50% increase in fuel price can raise total CASK by 12% to 20%, depending on the business model.

Direct impact on operating margins

• A 10% increase in fuel cost can reduce operating margin by more than 3 percentage points.
• Low‑cost carriers, with tighter margins, are especially vulnerable.
• Legacy carriers can absorb part of the cost through premium fares, but not indefinitely.

The key insight: if an airline replaced 100% of its Jet A‑1 with SAF today, its cost structure could increase by 25% to 40%.

Hedging and SAF price volatility

Traditional Jet A‑1 hedging relies on liquid, mature markets. SAF, however:

• Has no global spot market.
• Lacks a universal benchmark index.
• Depends on bilateral agreements with producers.
• Shows volatility linked to renewable‑energy markets rather than oil.

Airlines must therefore develop new hedging strategies, closer to those used in electricity or hydrogen markets.

Who ultimately pays the SAF premium?

Airlines have three options:

• Pass the cost to passengers: higher fares, especially on long‑haul routes.
• Absorb part of the cost: reducing margins or adjusting other OPEX items.
• Rely on government incentives: subsidies, tax credits, or green‑policy support.

A strategic issue emerges: airlines that do not adopt SAF risk being excluded from regulated markets such as the EU, where ReFuelEU Aviation mandates minimum SAF usage starting in 2025.

Technical Challenges: Use and Implementation in Current Fleets

Can any aircraft use SAF?

Yes. Any modern commercial aircraft can use SAF as long as it is certified and properly blended with Jet A‑1.

Engines from CFM, Rolls‑Royce, and Pratt & Whitney are certified to operate with blends of up to 50% SAF without modifications. This makes SAF the most immediate solution for reducing emissions without fleet renewal.

Can aircraft operate on 100% SAF?

Technically yes, but regulatory approval for commercial flights is not yet in place.

In 2023, Virgin Atlantic operated a transatlantic flight using 100% SAF, proving technical feasibility. However, full certification requires further studies on:

• Long‑term stability
• Lubricity
• Low‑temperature behavior
• Material compatibility

ICAO and ASTM are working on this, but full approval may take several years.

Which Airlines Are Using SAF Today?

SAF adoption is led by airlines that have signed long‑term offtake agreements to secure supply and price stability. Notable examples include:

• IAG Group: agreements with European and North American producers through 2030.
• Air France‑KLM: one of Europe’s largest SAF consumers.
• United Airlines: pioneer in direct investment in e‑fuel startups.
• Lufthansa Group: strong focus on corporate SAF programs.
• Qantas: agreements in Australia and the U.S. to develop local SAF plants.

These airlines aim not only to reduce emissions but also to protect themselves from future regulatory constraints and gain competitive advantage in carbon‑sensitive markets.

Conclusion: The Future of Airport and Aviation Management

SAF is not just a chemical or technological challenge—it is fundamentally a challenge of economic, logistical, and strategic management. Its large‑scale adoption will depend on the sector’s ability to:

• Balance sustainability with profitability.
• Develop new hedging and financial‑planning tools.
• Negotiate long‑term supply contracts.
• Adapt to increasingly demanding regulatory frameworks.
• Integrate ESG criteria into financial decision‑making.

Future leaders in the aviation sector must master these variables to guide the ecological transition without compromising airline competitiveness. These competencies—cost management, regulatory analysis, strategic planning—are central pillars of advanced aviation‑management training.