Modelling Airline Investment in Sustainable Fuels

Sustainable Aviation Fuel (SAF) is a central element of aviation decarbonisation policy and is increasingly subject to mandatory blending requirements. While SAF can substantially reduce lifecycle emissions, it remains significantly more expensive than fossil jet fuel, creating economic challenges for airlines operating under low margins and high capital intensity. Airlines therefore face the strategic question of how SAF mandates interact with fuel price developments, fleet-efficiency investments and pricing decisions over time. There is exhaustive literature available that addresses these components separately, while suitable models that include multiple dimensions in order to support strategic decision making are sparse.

Wyss, Pascal, 2025

Type of Thesis Master Thesis
Client
Supervisor Renold, Manuel
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This thesis develops a scenario-based Decision Support System (DSS) to assess the economic implications of SAF adoption for a representative European carrier. The model integrates operational flight activity, region-specific SAF mandates, blended fuel price trajectories, efficiency improvements, and airline financial accounting within a transparent simulation. Passenger demand and fares are treated exogenously, positioning the model as a feasibility tool rather than a predictive demand model.
This thesis develops a scenario-based Decision Support System (DSS) to assess the economic implications of SAF adoption for a representative European carrier. The model integrates operational flight activity, region-specific SAF mandates, blended fuel price trajectories, efficiency improvements, and airline financial accounting within a transparent simulation. Passenger demand and fares are treated exogenously, positioning the model as a feasibility tool rather than a predictive demand model.A scenario ladder is then applied, including a baseline without efficiency investments, scenarios with continuous fleet-efficiency improvements and stress scenarios featuring adverse fossil fuel price developments. Additional scenarios quantify the efficiency improvements and fare levels required to sustain a predefined profitability benchmark under increasing SAF-related cost pressures.
The results indicate that mandatory SAF adoption, in the absence of efficiency investments, leads to a persistent increase in fuel costs and declining profitability. Fleetefficiency investments reduce fuel consumption and partially mitigate these effects, with their economic value increasing under high fuel price conditions. The DSS provides transparent investment and pricing thresholds that support strategic decision-making under SAF-related uncertainty.
Studyprogram: Business Information Systems (Master)
Keywords
Confidentiality: öffentlich
Type of Thesis
Master Thesis
Authors
Wyss, Pascal
Supervisor
Renold, Manuel
Publication Year
2025
Thesis Language
English
Confidentiality
Public
Studyprogram
Business Information Systems (Master)
Location
Olten