World Reimagined: What Will Air Travel Look Like in the Future?
Delegates from all over the world are planning to meet in Scotland starting on October 31 for COP26, the next United Nations climate change conference. The goal of the conference is to collectively take more aggressive steps to slow global warming, and decisions related to cleaner transportation will be crucial to reaching any sustainable goals.
In recent years, there have been more and more developments in the cleaner transportation space that are occurring in the skies above.
Between Elon Musk’s Twitter feed and Tesla (TSLA) owners on Instagram, it would be easy to think that the green transportation evolution is all about passenger cars and delivery trucks. Tesla recently reported that automotive sales for the third quarter were up 77.4% year-over year, an astounding increase. And at the Munich Motor Show in September, the first major European exhibition in two years due to the pandemic, there were almost no new combustion models. According to McKinsey & Company, the electric and connected car industry attracted more than $100 billion in investment in 2020 alone.
However, roads and highways aren’t the only places cleaner transportation technology is being deployed. In 2021, battery-tech startups raised roughly $17 billion, according to McKinsey, and this is leading to significant improvements in battery performance, making Zero Emission Aviation (ZEA) increasingly viable. Aviation solutions range from large and small passenger airplanes to unmanned delivery drones.
Public policy is also looking to help the sector clean up. The Biden administration has set aggressive targets to reduce aviation emissions by 20% by 2030 and plans to support innovation that will help reach a fully zero-carbon aviation sector by 2050. The European Commission recently released a program to reduce Greenhouse Gas (GHG) emissions by 55% (compared to 1990 levels) by 2030. The program includes three measures to accelerate the decarbonization of the aviation industry. These measures include a Sustainable Aviation Fuel (SAF) blending mandate and the removal of aviation fuel tax exemptions.
So, just how big of a problem is this? According to the Air Transport Action Group, in 2019, flights worldwide carried about 4.5 billion passengers and produced 915 tons of CO2, which represents about 2% of all human-induced carbon dioxide emissions. According to Oxford University’s Our World in Data, global aviation accounts for 2.5% of CO2 emissions but 3.5% of “effective radiative forcing.” Radiative forcing measures the difference between incoming energy and the energy radiated back to space. If more energy is absorbed than radiated, the atmosphere becomes warmer, aka global warming.
But that isn’t the whole story. According to the European Commission, by 2050, demand for flying could increase aviation’s greenhouse gas emissions by upwards of 300%, which will be over 2005 levels if drastic measures are not taken. Furthermore, there is a growing understanding of the additional impact of aviation on the climate through the production of non-CO2 emissions, which could be responsible for as much as 60% of the sector’s contribution to climate change. According to the United Nations specialized agency that oversees aviation, the path to zero emissions for the aviation sector by 2050 requires a combination of solutions where new propulsion and fuel technologies play a major role.
Here's the thing: batteries are heavy, and it takes a lot of them to generate enough power to get a typical commercial passenger plane up into the air. And so, other ideas are in development. Airbus (EADSY) has announced plans to deliver the first zero-emission aircraft by 2035 using hydrogen fuel cells, and these are planes with passenger counts ranging from under 100 to under 200 and with ranges of 1,000+ to 2,000+ nautical miles, depending on the model.
Over the past year alone, four electric aviation companies have gone public: Joby (JOBY), Lilium (LILM), Archer (ACHR), and Vertical Aerospace through a SPAC merger with Broadstone Acquisition Corp (BSN). The previous year also saw several important milestones for hydrogen and electric aviation. In September 2020, the startup ZeroAvia completed the first passenger flight in a commercial-grade plane powered by a hydrogen fuel cell taking off from the U.K.’s Cranfield Airport.
While hydrogen fuel cell looks to be the leading technology for larger commercial planes, several companies have already announced plans to develop hybrid/ZEA horizontal take-off aircraft designed for under 20 passengers.
- Eviation Aircraft (EVTNF), based in Arlington, WA, is developing “Alice,” which is intended to be the world’s first all-electric commuter aircraft, designed for nine passengers with a range of 440 nautical miles
- Sweden-based Heart Aerospace, whose investors include Y Combinator Management LLC, EQT Ventures, and Endowment Arm, is developing a 19-passenger, fully electric battery-powered airliner that targets short-haul flights with an operating range of 200 nautical miles and a cruising speed of 180 knots. In July of this year, United Airlines (UAL) and Mesa agreed to buy 200 aircraft, and back in September of 2020, the company won a $2 million to $9 million grant from the European Innovation Council
- The privately held MagniX, based in Everett, WA, recently showcased a Cessna 208B Grand Caravan that was equipped with an all-electric propulsion system during its first test flight. Developed in partnership with Aero Tec, the plane is the world's biggest-ever all-electric commercially focused aircraft. It is also powered by a 750 hp magni500 propulsion system and a one metric ton (2,200 lb) 750V lithium-ion battery.
While it is still early days in the world of ZEA, there is an astounding amount of innovation being developed. We believe there are four key areas that will influence the switch from traditional aircraft to ZEAs:
- Performance. Just as with the switch from a combustion engine passenger car for a family is dependent on the vehicle’s range, speed, and what it can carry, performance will be vital.
- Infrastructure. The adoption of EVs is dependent on and limited by the buildout of charging stations. The same goes for ZEAs, which will need charging and/or hydrogen refueling infrastructure to be viable.
- Cost of ownership. Just as an EV becomes more attractive or less attractive based on maintenance costs post-purchase, so does the cost of operating and maintaining ZEAs impact the decision to switch.
- The desire for cleaner living. As the world becomes increasingly aware of the costs of not switching to low-to-no emission options, so does the willingness to make the switch.
Imagine airports without the smell of exhaust, and air travel without the drone of combustion engines. That world is coming and will be here sooner than you think. In the first ten months of 2021, there have been 5,800 orders for ZEA or hybrid aircraft, according to McKinsey. Cleaner and quieter skies, now that is a world to reimagine.
- Tesla (TSLA) is a constituent of the Tematica BITA Cleaner Living Index and of the Tematica BITA Cleaner Living Sustainability Screened Index
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.