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Federated Hermes

May 25, 2026

Efficiency at Altitude

Macro ThematicEquitiesMacro Economic IndicatorsIndustrialsEnergy

While sustainable aviation fuel (SAF) is critical, it is currently limited by high costs and low supply. Airlines must adopt operational efficiencies—such as optimized flight paths and ground operations—to meet climate goals and protect margins.

Key Takeaways

  • 1.Sustainable aviation fuel (SAF) alone is insufficient to meet industry climate goals due to infrastructure, cost, and production capacity constraints.
  • 2.Operational efficiencies, such as single-engine taxiing and AI-assisted flight path optimization, offer immediate fuel savings of 2-14%.
  • 3.Fleet renewal is a key long-term lever, with modern aircraft consuming up to 25% less fuel than previous models.

Table of Contents

  • Setting the scene
  • Ground operations
  • Engine testing
  • Optimising flight paths
  • Speed control
  • Fleet renewal
  • Disruptive technologies
  • Our engagements
  • Outlook
  • Engagement themes for the aviation sector

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Authors

Hannah HeuserKenny Tsang

Securities

LufthansaAirbusANA (All Nippon Airways)300750 CSComac

Themes

Operational Efficiency vs. SAFClimate Policy & RegulationTechnological Innovation

Regions

EuropeGlobalAsia PacificUnited KingdomBrazilChina