Scenario 1: Hydrogen powered flight in a fragmented world

Techno-economic landscape

Hydrogen propulsion technology has achieved commercial viability for aircraft up to 150 seats on flights shorter than 120 minutes. The industry successfully deployed both hydrogen fuel cell systems – converting hydrogen and oxygen electrochemically to power electric propellers –and direct liquid hydrogen combustion through modified gas turbines in turbofan and turboprop configurations.

While challenges remain, the successful resolution of technical challenges related to onboard hydrogen storage and the management of liquid hydrogen played a major role in advancing the adoption of hydrogen propulsion. Airports invested in storage tanks up to four times larger by volume than conventional kerosene infrastructure, maintaining the ultra-cold -252°C required for liquid hydrogen. Renewable energy integration at major hubs enabled economically viable green hydrogen production, with costs dropping significantly in regions with abundant renewable resources.

Liquid hydrogen has achieved a lower per-passenger cost per km, than synthetic sustainable aviation fuel. This cost advantage materialized only after substantial up-front capital investments in hydrogen trucks, pipeline systems, liquefaction plants, and specialized refueling infrastructure were absorbed, primarily through coordinated policy frameworks and subsidies bridging the gap between fossil kerosene plus CO₂ costs, and hydrogen infrastructure expenses.

Geopolitical context

The geopolitical landscape bears scars from the Russian-Ukrainian airspace closures that disrupted global aviation networks in the 2020s. While that specific conflict has stabilized through an uneasy détente, the pattern it established – weaponization of airspace – has proliferated. Aviation networks have become permanently fragmented, with multiple closed corridors forcing circuitous routing that increases fuel consumption and operational costs.

Escalating tensions between China and Taiwan have resulted in restricted airspace over the Taiwan Strait, forcing carriers to reroute Asia-Pacific traffic with significant distance penalties. The India-Pakistan corridor remains periodically closed during diplomatic crises, disrupting South Asian connectivity. These fragmented networks have inadvertently created regional aviation zones, where battery-electric aircraft serve contained geographic markets while SAF-powered aircraft navigate the complex web of international restrictions.

The geopolitical crisis environment has accelerated each region's push for energy independence, driving localized SAF production from diverse feedstocks rather than global fuel supply chains.

Economic implications for airlines

Airlines operate under fundamentally transformed cost structures. SAF mandates have addedto fuel costs compared to the fossil kerosene baseline (for instance, in 2035, a blending requirement of 12% blending have resulted in 8-15% additional costs), offset partially by carbon pricing mechanisms that penalize conventional fuel use. Legacy carriers have split their fleets into distinct operational categories: battery-electric aircraft for dense regional networks and SAF-compatible conventional aircraft for longer routes.

Business models have adapted to fragmented networks through aggressive hubbing strategies within politically stable regions. Airlines concentrate traffic through fortress hubs where SAF infrastructure is most developed, creating competitive moats around Amsterdam, Singapore, and Dubai. Route profitability calculations now incorporate geopolitical risk premiums, with carriers demanding higher yields on politically volatile corridors.

The capital-intensive nature of fleet renewal has driven unprecedented consolidation, as smaller carriers lack resources to maintain dual propulsion capabilities. Airlines have formed SAF purchasing consortia to achieve economies of scale, with long-term offtake agreements providing price stability. Operating margins remain compressed as carriers absorb transition costs while competing on fragmented, lower-density routes.

Economic implications for airports

Airports underwent fundamental business model transformation, with infrastructure investment in hydrogen systems requiring unprecedented capital deployment. Major European hubs, for instance, invested in cryogenic storage infrastructure, liquefaction plants, and renewable electricity integration to enable on-site green hydrogen production. Storage facilities expanded to accommodate hydrogen's volumetric requirements – up to four times larger than kerosene tanks. Public-private partnerships ameliorated investment risks, with government funding in certain jurisdictions helping accelerate deployment.

The ownership structure evolved toward airports directly investing in hydrogen production capabilities where regulatory frameworks permitted. Airports with available land became energy producers, generating hydrogen for aircraft while supplying ground service equipment, and passenger vehicle charging stations, creating diversified revenue streams beyond aeronautical fees.

Fragmented geopolitical networks created infrastructure disparities. Airports within stable regional blocs with coordinated hydrogen rollout strategies avoided stranded assets through strategic harmonization. However, those in politically volatile regions, or lacking renewable energy access, struggled with insufficient hydrogen supply, limiting their ability to attract hydrogen-capable aircraft.
 

Economic implications for airframe manufacturers

Airframe manufacturers faced constrained market opportunities despite technological advancement. Hydrogen aircraft remained limited to 150 seats or fewer for flights shorter than 120 minutes due to onboard storage constraints. This restriction meant that larger aircraft continued requiring SAF or kerosene, fragmenting the product portfolio.

Even on routes under 3,000km, the total market share for hydrogen aircraft reached only 27% by revenue passenger kilometers, with conventional aircraft serving most traffic due to aircraft retirement cycles and fleet replacement economics.

The development of dual systems – sustainable aviation fuel compatibility and hydrogen propulsion – created capital-intensive risks of stranded investments. Manufacturers required clear long-term policy frameworks to justify research expenditures on completely new cryogenic fuel systems, thermal management technologies, and specialized safety procedures. The lack of global coordination meant different regional standards, limiting economies of scale. Demonstrator programs, such as EU-financed hydrogen aircraft leased to airlines for operational experience, proved essential for market validation.
 

Passenger experience

Passengers navigate a fragmented global network where geopolitical boundaries dictate routing options. Booking systems display airspace accessibility based on nationality and departure point, with travel times varying significantly depending on political bloc affiliations. Short- to mid-haul journeys within integrated regions like Europe offer relatively efficient (hydrogen-powered) service, but intercontinental travel involves circuitous routing avoiding closed airspace, significantly extending journey times.

Security procedures incorporate political risk assessments, with passengers facing additional documentation for cross-bloc travel. The promise of hydrogen aviation's environmental benefits resonates with climate-conscious travelers, particularly Europeans where "flight shame" (flygskam) concerns now increasingly influences consumer preferences. However, the reality of restricted global connectivity tempers enthusiasm as travelers confront the practical limitations of a politically divided world.

Hydrogen aircraft feature redesigned cabin configurations accommodating enlarged fuel storage systems, sometimes reducing passenger space or cargo capacity. Specialized boarding areas for hydrogen aircraft feature educational displays and safety briefings that inform passengers about the technology, its environmental advantages, and its distinct risk profile; which requires careful thermal management. The flying experience feels simultaneously more environmentally responsible yet constrained by geopolitical realities beyond aviation's control.

Environmental outcomes

Hydrogen propulsion has demonstrated its capacity for drastic carbon footprint reduction, with hydrogen aircraft producing only water vapor at point of use. European aviation achieved measurable progress toward its CO₂ reduction targets through intra-European hydrogen operations. However, the contribution to global emissions reduction remained limited – estimated at approximately 9% of total aviation CO₂ emissions – due to hydrogen aircraft's restricted range capabilities and limited market penetration of 27% even on suitable routes.

Geopolitical crises systematically counteracted climate mitigation efforts. The ongoing fragmentation forced continued inefficient routing, and increased fuel consumption. Aviation sustainability objectives became casualties of political conflicts, with crisis-induced emissions undermining benefits from both hydrogen adoption and sustainable aviation fuel deployment.

Political challenges regarding sufficient support for hydrogen infrastructure were partially overcome in Europe through coordinated policy frameworks, but global fragmentation prevented the strategic, regionally harmonized rollout necessary to avoid stranded assets. The failure to establish collaborative airspace governance frameworks integrating security and sustainability imperatives meant environmental progress remained constrained by geopolitical realities, leaving the industry's net-zero ambitions somewhat uncertain.