Building a Sustainable Airline Fuel Infrastructure

Good morning from Skift. It’s Wednesday, November 9. Here’s what you need to know about the business of travel today.

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Episode Notes

European authorities are preparing legislation requiring airlines to use more sustainable fuel by 2030 in efforts to make aviation more environmentally friendly. But to accomplish that ambitious goal, American Express Global Business Travel CEO Paul Abbott argues the travel industry needs to start securing money now to build sustainable fuel plants, reports Corporate Travel Editor Matthew Parsons.

Speaking at the Global Business Travel Association’s Sustainability Summit on Tuesday, Abbott said 300 sustainable aviation fuel plants need to be built to help hit, for example, a 10 percent sustainable fuel target. Building the production plants would cost $90 billion and take five years, Abbott estimated. He added the travel industry has to figure out soon how to obtain the money to start building the plants in 2024 or 2025.

Abbott also said he doesn’t view operating fewer flights as the most appropriate method to reduce carbon emissions, arguing reducing the number of leisure flights is difficult. However, Mark Cuschieri, the association’s vice president, said at the summit that getting the necessary amount of sustainable aviation fuel was challenging.

Next, Booking.com, which is often seen as a rival to Airbnb, only recorded a modest increase in short-term rental bookings from 2019 levels during the third quarter. But the company isn’t worried about stagnant booking levels in the sector, reports Executive Editor Dennis Schaal.

Booking.com CEO Glenn Fogel acknowledged during its recent third quarter earnings call that it wants to expand its roster of short-term rental properties. However, Fogel said its inability to attract more short-term rental bookings wasn’t necessarily a negative since hotel bookings are more profitable for the company. Hotels represented roughly 70 percent of bookings on the site during the third quarter, around the same level as last year.

Fogel stated Booking.com’s strategy isn’t to push travelers toward short-term rentals instead of hotels. But he said the company could easily increase short-term rental bookings if it struggled with hotels.

Finally, Norwegian Cruise Line saw its occupancy level rise in the third quarter even as it increased its pricing. The company believes it will fill ships next year with even higher pricing amid a possible economic downturn, writes Dawit Habtemariam.

Norwegian Cruise President and CEO Frank J. Del Rio said during its third quarter earnings call on Tuesday that its occupancy level rose to 82 percent, a 17 percentage point increase from the previous quarter. That jump occurred in spite of charging customers more to cruise than it did in 2019. Norwegian Cruise expects to reach full occupancy levels by the second quarter of next year.

Habtemarian writes that raising prices is part of the company’s strategy to achieve its recovery targets, with Chief Financial Officer Mark Kempa explicitly stating Norwegian Cruise wants its customers to pay more. Habtemarian notes that most of the company’s guests have more than a quarter million dollars in net worth, a group that has historically continued to book cruises despite economic downturns.