Airlines are rapidly shifting toward sustainable aviation fuel (SAF) as geopolitical disruptions make it cost-competitive with conventional jet fuel for the first time, while also investing in next-generation aircraft designs that could cut fuel consumption in half. Aviation accounts for 2.5% of global carbon dioxide emissions but contributes up to 5% of global warming when accounting for additional atmospheric effects, making the industry one of the hardest sectors to decarbonize.

What's Changing in Aviation's Sustainability Strategy?

Ryan Spies, managing director of sustainability at Alaska Air Group, outlined the airline's two-pronged approach to reducing emissions at Bloomberg Green New York this week. The strategy combines immediate deployment of sustainable aviation fuel with long-term investments in aircraft technology that could fundamentally reshape how planes fly.

The timing is significant. Six months ago, sustainable aviation fuel cost substantially more than conventional jet fuel, making it economically challenging for airlines operating on thin 2.5% profit margins. Today, that equation has shifted dramatically. "If you went to a producer of SAF today, you can get a pretty competitive price compared to jet," Spies explained, noting that international oil shipping disruptions from regional conflicts have altered market dynamics.

"Six months ago, sustainable aviation fuel was absolutely more expensive than jet fuel. If you went to a producer of SAF today, you can get a pretty competitive price compared to jet," said Ryan Spies, managing director of sustainability at Alaska Air Group.

Ryan Spies, Managing Director of Sustainability, Alaska Air Group

How Are Airlines Scaling Sustainable Aviation Fuel Production?

The primary challenge remains production capacity. Sustainable aviation fuel currently supplies less than 1% of aviation fuel globally, far below what the industry needs to meaningfully reduce emissions. To address this shortage, Alaska Air Group partnered last year with other carriers and Bill Gates' Breakthrough Energy Ventures to create a $150 million fund specifically backing SAF innovators. The fund leverages Breakthrough's expertise to identify the most viable feedstocks, chemistries, and economic models for scaling production.

Regional initiatives are also gaining momentum. In January, Pacific Northwest officials from Alaska Air, Amazon, Boeing, SkyNRG, and government representatives launched the Cascadia Sustainable Aviation Accelerator to establish the region as a hub for SAF development and production. Startup Twelve is already producing fuel in Moses Lake, Washington, while Montana Renewables has emerged as a sector leader.

• Feedstock Sources: Sustainable aviation fuel can be made from used cooking oil, agricultural waste, forestry waste, and captured carbon, then blended with conventional jet fuel
• Market Drivers: Beyond environmental benefits, geopolitical volatility and interest in U.S. energy independence are now motivating SAF adoption as a strategic priority
• Production Timeline: Current supply meets less than 1% of global aviation fuel demand, requiring significant scaling to meet industry needs

What Next-Generation Aircraft Could Transform Aviation?

While sustainable fuel addresses immediate emissions concerns, Alaska Air is also backing transformative aircraft designs that could reshape aviation's future. Two years ago, the airline invested in JetZero, a company developing a blended-wing body aircraft designed to reduce fuel consumption by 50% through improved aerodynamics. The company plans to fly a prototype next year and begin carrying passengers in 2030.

"An aircraft that can carry 200 plus passengers that can reduce fuel usage by 50% through better aerodynamics, that's a game-changing development," said Ryan Spies.

Ryan Spies, Managing Director of Sustainability, Alaska Air Group

Alaska Air has also backed Ampaire, a startup developing hybrid-electric drivetrains for aircraft. Spies described the company as "the Prius of aviation" due to its efficiency gains. The system is currently designed for smaller eight-seat aircraft, and the airline is exploring deployment in Hawaii.

Spies

Despite these innovations, aviation sustainability remains a slow process. "Advancing aviation sustainability is one of the hardest sectors to decarbonize because of pure physics," Spies noted, acknowledging that meaningful change will come through incremental advances in fuel technology and aircraft design rather than revolutionary overnight shifts.

The convergence of economic incentives, geopolitical pressures, and technological innovation suggests that the next decade will bring visible changes to aviation's carbon footprint, even if the transformation happens gradually. For passengers, most of these advances will occur behind the scenes as fuel compositions change and aircraft designs evolve, making the shift toward low-carbon flying largely invisible to those in the cabin.