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Return of business travel, sustainable fuels expected in aviation's future

Published 03/01/2021, 02:25 PM
Updated 03/01/2021, 02:30 PM
© Reuters. FILE PHOTO: American Airlines passenger planes crowd a runway where they are parked due to flight reductions to slow the spread of coronavirus disease (COVID-19), at Tulsa International Airport in Tulsa

© Reuters. FILE PHOTO: American Airlines passenger planes crowd a runway where they are parked due to flight reductions to slow the spread of coronavirus disease (COVID-19), at Tulsa International Airport in Tulsa

By Laura Sanicola

(Reuters) - International business travel is not expected to remain permanently depressed, though it will likely recover from the coronavirus pandemic at a slower rate than leisure travel, United Airlines Chief Executive Scott Kirby (NYSE:KEX) said on Monday during CERAWeek by IHS Markit.

Business travel was a key area of growth for the airline industry prior to last year's onset of the coronavirus pandemic, which sapped demand for all transportation fuels worldwide.

Fears that business travel will never return are unfounded, Kirby said during the virtual energy conference, arguing that while some companies may try to reduce business travel to cut costs, they will run up against competition who are willing to fly.

"The first time they lose a sale to a competitor who showed up in person while they tried to do a sales call over Zoom, will be the last time they try to do a sales call on Zoom," Kirby said.

Volumes for jet fuel, while lagging behind gasoline and diesel, will "probably restore itself more or less back to normal by the second half of this year," Ben Van Beurden, CEO of Royal Dutch Shell (LON:RDSa), also said on the panel.

Both CEOs also spoke on the role of sustainable fuels as part of the aviation industry's role in cutting emissions to reach net zero carbon by 2050, a theme of this year's CERAWeek oil and gas conference.

Reducing emissions "is a moral imperative for a company who wants to remain on the right side of history," and also provides a business opportunity, Van Beurden said, adding that he expects Shell to be a major player in biofuels.

Earlier in the conference, keynote speaker, investor and philanthropist Bill Gates noted that lower-carbon fuels to power aircrafts costs three times as much than traditional petroleum-based jet fuel.

United Airlines' fleet will likely need a combination of sustainable fuels that could be sourced from municipal solid waste, industrial gases and algae, though only the latter may be scalable, according to Kirby.

© Reuters. FILE PHOTO: American Airlines passenger planes crowd a runway where they are parked due to flight reductions to slow the spread of coronavirus disease (COVID-19), at Tulsa International Airport in Tulsa

"Algae's tough, the science exists but getting it to be economic and work is really difficult. I don't think there's an answer yet," Kirby said.

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