Scenario 3: SAF and battery-electric powered flight in a connected world

Techno-economic landscape

Battery-electric propulsion has captured the regional aviation market for routes up to 500 kilometers. These aircraft serve short to medium-haul routes with 90-seat capacities, delivering reductions in fuel consumption compared to conventional turboprops. Metal-air batteries, with their higher energy density, have enabled extended ranges previously impossible with earlier lithium-ion chemistries.

For longer routes, sustainable aviation fuels have become the dominant solution. Power-to-liquid (PtL) e-fuels, synthesized using renewable electricity, now represent the fastest-growing SAF pathway, overtaking bio-based options. While HEFA (Hydroprocessed Esters and Fatty Acids) faces feedstock constraints, Fischer-Tropsch processes have scaled significantly, offering synthetic SAF from diverse feedstocks.

While regional variations exist, the deployment of renewable electricity grids across Europe and North America has helped to ameliorate concerns regarding lifecycle emissions, which plagued early electric aviation. Battery recycling systems now operate in closed loops, helping to address manufacturing sustainability challenges and raw material sourcing issues. Thermal management systems, once a critical bottleneck adding drag through heat exchangers, have been optimized through advanced cooling architectures integrated into airframe design.

On the side of SAF, the key breakthrough involved addressing the challenges of scaling up Power-to-Liquid SAF production through coordinated policy efforts—specifically, reducing renewable electricity costs and improving CO₂ capture efficiency. The combination of falling renewable energy prices and carbon pricing systems steadily narrowed the price disparity with traditional fuels.
 

Geopolitical context

The "Connected World" materialized as geopolitical tensions that dominated the early 2020s gradually resolved. The Russia-Ukraine conflict concluded with a negotiated settlement, reopening Eastern European airspace and normalizing energy markets. This stabilization proved crucial for aviation, as Russian airspace reopened for overflights, reducing flight times and fuel consumption on Asia-Europe routes. European natural gas supplies diversified through North African pipelines and LNG terminals, stabilizing energy prices essential for SAF production.

International cooperation strengthened through expanded multilateral frameworks. The International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) evolved into a binding framework with universal participation. Trade barriers were largely removed through the establishment of free trade agreements, facilitating the cross-border movement of SAF and aircraft components. Multiple nations reached détentes on technology standards, enabling harmonized certification processes for electric aircraft and SAF specifications.

However, new tensions simmer. Rivalries over renewable hydrogen production – crucial for PtL SAF – have intensified as nations compete to become dominant fuel exporters, though market mechanisms rather than military conflict characterize this competition.
 

Economic implications for airlines

Airlines have fundamentally restructured around a dual-fleet strategy. Regional subsidiaries operate battery-electric aircraft on dense short-haul networks, achieving lower operating costs per seat-kilometer compared to conventional turboprops. Affordable renewable electricity costs and reduced maintenance (electric motors have far fewer moving parts) has enabled better pricing on routes under 500 kilometers, stimulating traffic growth on these corridors.

SAF mandates have increased fuel costs relative to the conventional kerosene baseline, although carbon pricing mechanisms that penalize traditional fuel use have (partially) offset this increase. Airlines have established purchasing consortia to secure economies of scale, while long-term offtake agreements have provided greater price stability. 

The competitive landscape has shifted. Low-cost carriers operating dense short-haul networks – ideal for electric aircraft - have expanded market share. Legacy carriers have restructured, spinning off regional electric operations while concentrating on long-haul (synthetic) SAF-powered services where their hub infrastructure provides competitive advantages. 

Hybrid reserve systems – tail-mounted gas-turbine generators for emergency use – satisfy regulatory requirements while keeping operations fully electric, adding minimal weight penalty but ensuring safety certification.
 

Economic implications for airports

Airports globally have had to invest in electric charging infrastructure and SAF storage facilities. Public-private partnerships and government infrastructure funding played a crucial role in facilitating these investments. Major hubs like Amsterdam Schiphol, Singapore Changi, and Dubai International now feature dedicated electric aircraft charging zones with high-voltage distribution networks capable of delivering 2-4 megawatts per charging point, enabling 45-minute turnarounds for regional electric aircraft.

Revenue models have evolved beyond traditional aeronautical fees. Airports now operate as energy hubs, generating a noticeable share of revenue from electricity sales to electric aircraft and SAF sales to conventional fleets. Some airports with available land - particularly in regions with high renewable energy potential - have invested in on-site renewable electricity generation, selling surplus capacity to ground transportation and industrial users.

The competitive dynamics between airports have intensified. Facilities that secured early electric charging infrastructure now dominate short-haul markets, as airlines preferentially route electric aircraft through hubs with optimal charging capabilities. SAF availability has become a key competitive differentiator, with airports negotiating exclusive supply agreements with producers. Smaller regional airports have found new relevance, as electric aircraft economics favor point-to-point services over hub-and-spoke networks, distributing traffic more evenly across the airport network and generating economic development in secondary cities.

Economic implications for airframe manufacturers

While large legacy manufacturers have maintained dominance in the widebody aircraft segment, they face disruption in the regional segment. Startups have succeeded at capturing a healthy share of the 90 seat electric aircraft market by moving faster from concept to certification.

Development costs for electric aircraft proved lower than conventional aircraft due to simplified propulsion systems, but certification processes were at least initially more expensive per program, as regulators developed new standards for battery safety, electromagnetic compatibility, and distributed propulsion. Harmonized certification standards across FAA and EASA helped to reduce these costs substantially.

For SAF-compatible aircraft, manufacturers have benefited from the drop-in nature of SAF, requiring no airframe modifications. However, they've invested in optimizing new designs for greater efficiency, so as to help airlines offset SAF cost premiums. Advanced aerodynamics, weight reduction through composite materials, and engine efficiency improvements have enabled fuel burn reductions in new-generation aircraft entering service. Aircraft modernization programs retrofitting in-service fleets with winglets, improved engines, and operational efficiency technologies have contributed to emissions reductions, though less than SAF itself.
 

Passenger experience

Flying now offers contrasting experiences depending on route length. Regional travelers on battery-electric flights enjoy noticeable comfort - near-silent cabins (since electric motors produce 15-20 decibels lower noise levels compared to turboprops ), and no vibration from propulsion systems. However, range limitations mean journeys over 500 kilometers require connections, adding travel time.

Long-haul passengers on SAF-powered flights experience aircraft largely unchanged from 2025 models – SAF's drop-in compatibility meant no cabin modifications. Airlines have improved transparency, itemizing SAF surcharges separately and offering passengers options to purchase additional SAF credits for full carbon neutrality. Corporate travel policies increasingly mandate SAF-powered flights for sustainability reporting.

Charging lounges near electric aircraft gates showcase real-time displays of renewable electricity sources powering flights. SAF production processes feature in terminal exhibits, building public understanding of decarbonization efforts. 
 

Environmental outcomes

Aviation CO₂ emissions have declined, despite traffic growth – a significant achievement driven primarily by SAF adoption. Sustainable aviation fuels now comprise a considerable share of global jet fuel consumption, with PtL varieties approaching 100% emission reductions when produced with renewable inputs and direct air capture. Battery-electric aircraft have eliminated emissions on 15% of global flight departures (concentrated on short routes), achieving near-zero well-to-wake CO₂ per passenger-kilometer when charged from fully renewable grids.

Early political fragmentation on SAF mandates were resolved through the coordination of frameworks. The European Union's ReFuelEU Aviation regulation mandating progressive SAF blending created demand certainty that unlocked producer investments. The United States Inflation Reduction Act's production tax credits provided economic support, while CORSIA's evolution into binding commitments created global baseline standards.

Resistance from fossil fuel interests diminished as oil majors recognized strategic necessity and repositioned as "energy companies" rather than purely petroleum producers. NGO pressure and corporate sustainability commitments from major airlines (many with science-based targets) maintained momentum. Public acceptance grew as transparency around SAF pricing and lifecycle emissions built understanding of transition costs.

Yet challenges persist. The production cost barrier remains aviation's defining constraint – SAF's price premium versus fossil kerosene continues to slow adoption. Further scaling PtL production requires more renewable energy buildout beyond current deployment rates.  Additionally, Carbon capture technology, while imaproved, needs further advancement for scalable PtL production at competitive prices.