British Airways can be more expensive than some other airlines, particularly budget carriers due to their premium services and route network. However, this could soon change with the airline poised to undercut its rivals thanks to a £2.6bn ($3.5bn) push into “green” fuel. 

The UK’s flag carrier has been an early and major adopter of sustainable aviation fuel (SAF) and is working towards achieving net zero carbon emissions by 2050. They currently use or plan to use SAF produced from used cooking oil, woody biomass, used tyres, or orchard and forestry waste. They were also the first airline in the world to use SAF produced on a commercial scale in the UK after signing a multi-year agreement with Phillips 66.

These movements have unlocked a 40% discount to market prices.

Governments are now setting mandates for airlines to use a certain percentage of SAF to reduce their carbon emissions. Net-zero targets are highly likely to increase fares over the next couple of years as the price of SAF can be two to seven times more expensive than traditional kerosene.

This higher cost is primarily due to the current technology and feedstock costs. The EU SAF blending quota starts at 2% from 2025, 6% from 2030, 20% from 2035 and 70% from 2050.

While SAF's price is expected to decrease as production scales and supply increases, it remains a significant challenge for airlines, many of whom are already rolling out additional costs. 

German flag carrier Lufthansa has already introduced an environmental cost surcharge on all tickets  on flights from the 27 EU countries as well as the UK, Norway and Switzerland.

The supplement can vary between 84p (one euro) to £60.70 (€72), depending on the flight route.

Virgin Atlantic has announced a £24 surcharge as part of the new green levy aimed at covering the costs of using SAF.

The airline’s boss previously warned that a return trip to New York could ultimately cost £40 more per person as SAF usage increases.

However, BA has signalled its customers could avoid footing some of the bill for transitioning to net zero as thanks to them being an early adopter they can lock in SAF prices at a hefty discount to market rate.