In this episode of our 'Sustainability in the Air’ podcast, SimpliFlying CEO Shashank Nigam and Patrick Edmond, Managing Director of Altair Advisory, debate one of aviation’s most contentious topics: Is demand management still a viable solution for reducing the industry’s rising carbon emissions?
Moderated by Dirk Singer, SimpliFlying’s Head of Sustainability, the discussion stems from a heated LinkedIn exchange between Patrick and Shashank, sparked by Shashank’s reflections after speaking at the World Economic Forum in Davos earlier this year. As the debate gained momentum online, many called for a live conversation – so we decided to host the debate on Sustainability in the Air.
Here are the key highlights of the conversation:
Demand management: myth or reality (3:38)
Airline industry growth plans vs sustainability goals (5:52)
Behind closed doors: What airline executives really say (15:21)
Carbon leakage and regulatory challenges (19:45)
The “guilt premium” vs “good global citizen premium” debate (25:19)
The price elasticity: ticket pricing and travel behaviour (40:38)
The infrastructure solution: stopping airport expansion (42:06)
Flying with purpose: The closing argument (50:27)
Keep reading for a detailed overview of the episode
The “guilt premium”
A central theme in the debate was whether sustainable aviation fuels (SAF) could ever achieve price parity with conventional jet fuel. Shashank challenged whether airlines can be persuaded to pay more for greener alternatives in the long term.
He also contended that without price parity, sustainability efforts may rely more on guilt than economics: “Technologies from SAF to eSAF, regardless of the pathway of SAF, will need to compete on their merit. Otherwise, green premium is just guilt premium, and you can no longer guilt airlines into paying more.”
Further, drawing on his experience of working with multiple airlines and SAF producers, suggested that successful SAF providers must adopt economic models similar to traditional oil refineries – selling multiple products to support overall profitability.
“Traditional oil refineries produce a range of products, and SAF companies should do the same – selling by-products like waxes to L’Oréal for profit, for example. Ultimately, they’ll need to bring the Jet-A component in line with Jet A-1 fuel prices.”
Patrick countered this characterisation, suggesting that voluntary purchases by airlines were a “good global citizen premium” instead, which signal their efforts to reduce carbon emissions.
Patrick also emphasised that relying solely on market forces might not deliver the necessary change: “The idea that technologies should succeed solely on economic merits tends to support the free market ideology… If we actually want to shift our behaviour and reduce emissions, we can’t leave it to the individual actors.”
Is travel demand price elastic?
The debate also addressed the relationship between ticket pricing and travel behaviour and whether raising ticket prices can curb aviation demand (known as price elasticity of demand).
Shashank presented compelling evidence that contradicts the assumption that higher ticket prices reduce flying: “The Air Passenger Duty (APD) in the UK, which is the world’s most expensive tax on any passenger ticket, has gone up 16% since 2010, yet UK international passenger numbers are up 36%,” he explained. “People are not avoiding it. They’re still flying.”
Patrick acknowledged this point but maintained that at some threshold, price increases would eventually impact demand: “Aviation demand is not price inelastic. If I’m in London and a flight home to Dublin costs €99, I’ll fly often. At €499, I’d fly far less – there’s a threshold where price hikes curb demand.”
The infrastructure solution
Rather than focusing on taxation or pricing strategies, Shashank proposed a more direct approach to demand management:
“The only real way of demand management for the purposes of sustainability and achieving sustainable growth in Europe and North America is to stop building new runways. If you build more runways, airports will do everything they can to sell those slots. Airlines will do everything they can to fill those airplanes.”
Patrick agreed with this approach, noting that “by halting runway construction, we limit capacity, which forces higher prices for flights.”
The Singapore model
The debate highlighted Singapore’s innovative approach as a potential middle ground: "Every airline ticket out of Singapore will have a surcharge... ranging from $2 for a short-haul flight to $12 for a long haul. They're actually earmarking these funds to directly fund SAF purchases from the local Neste plant."
This approach, both experts agreed, represents a more thoughtful policy intervention that directly connects revenue to funding sustainability solutions within aviation rather than general taxation.
The frequent flyer factor
Both experts aligned on the idea that the real climate impact comes not from occasional travellers but from frequent flyers.
Dirk highlighted this point early in the debate: “Bearing in mind that, as we all know, 80% of the world does not fly. Who are we, all of us who’ve flown here a lot, to tell the other 80% that they can’t?”
Shashank shared his personal experience: “When Dirk sat me down a few years ago in London and made me calculate my carbon footprint, I almost fell off my chair. I was a vegetarian, I was driving an electric car... and yet my carbon footprint was two times the highest per capita country in the world... and it was all due to my flying.”
Finding silver linings
The debate concluded with Shashank suggesting an unexpected benefit of airline loyalty program devaluations: “If you have to spend 20,000 pounds per year to gain British Airways’ Gold status, you're likely a corporate traveler, and your company is covering the costs. The willingness to pay for SAF, decarbonisation efforts, and carbon credits is much higher on the business side than with individual travellers.”
By focusing more on high-value corporate travellers who are willing to pay for sustainability, airlines could potentially fund more environmental initiatives while inadvertently encouraging more direct, efficient routing for leisure travellers.
The path forward
While Shashank and Patrick approached the issue from different perspectives, they found common ground on several points. Both acknowledged that purely individual actions wouldn’t solve the systemic challenge, and both supported policies that would direct aviation taxes specifically toward sustainability initiatives.
The debate illuminated why conventional approaches to demand management may indeed be largely mythical in their effectiveness. Traditional price signals through taxation have shown limited impact, while more fundamental interventions like infrastructure constraints or frequent flyer levies face implementation challenges. Perhaps most significantly, the discussion revealed that the binary framing of “demand management versus technological innovation” is oversimplified.
Successful demand management in aviation could potentially be achieved through several key frameworks. The European Union Emissions Trading System (EU ETS) could be expanded to encompass all long-haul flights departing from Europe, creating a comprehensive approach to carbon pricing. Frequent flier programs could be strategically redesigned to target business travellers, who typically have greater financial capacity and willingness to invest in carbon offsets.
Additionally, developed countries should critically examine infrastructure expansion, specifically by implementing a moratorium on new runway construction. In cases where runway development becomes unavoidable, these new infrastructure projects should be exclusively dedicated to aircraft utilising SAF or emerging electric and hybrid propulsion technologies. By implementing these interconnected strategies, the aviation sector could meaningfully address its environmental impact while encouraging technological innovation and more sustainable travel practices.
As William Blake’s quote, shared by Patrick, suggests, the aviation industry is beginning to recognise what might be “more than enough” – the challenge now is defining and achieving what is “enough” in a world where flying remains both valuable and environmentally consequential.
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