SINGAPORE—Cebu Pacific has tapped Shell Aviation for the supply of sustainable aviation fuel (SAF), which is as much as eight times more expensive than conventional fuel.
The two companies signed on Tuesday a memorandum of agreement for Shell Aviation to supply 25,000 metric tons of SAF per year to Cebu Pacific from 2026 to 2031.
Cebu Pacific Chief Strategy Officer Alex B. Reyes noted that SAF will be initially used to take delivery of new planes from Airbus.
“This is just a first step,” he said. “As far as the commercial flights are concerned, there are no firm plans yet.”
Doris Tan, who heads Shell Aviation in Asia Pacific and the Middle East, noted that the supply of SAF is still limited, hence it is as much as eight times more expensive than conventional jet fuel.
She noted however that “if production ramps up, it will bring down the cost” of SAF.
SAF is said to reduce carbon emissions by as much as 80 percent. However, the caveat is that sustainable fuel is two to eight times more expensive than conventional aviation fuel.
“We all want to invest in SAF making it more part of our business as usual operations. Supply is actually not available and whatever is out there is more expensive than jet aviation fuel. We’re in very early stages for this,” Reyes said.
Should Cebu Pacific decide to incorporate SAF in its commercial flights, passengers will have to shoulder the difference between SAF and conventional fuel.
“We try to reflect the operating economics to the passengers…up to the point that consumers are willing to pay,” Reyes replied.
Aside from reducing its use of conventional jet fuel, the Gokongwei-led carrier is gunning for net zero emissions by 2050 by replacing its fleet of old current engine option (CEO) planes with new engine option (NEO) jets.
Reyes noted that the company is strengthening its sustainability initiatives with its refleeting program through 2028.
Currently, the majority of Cebu Pacific’s fleet are still Airbus CEO jets, with only 43 percent of its entire fleet NEO planes. By 2028, it should have a fleet of 100 percent Airbus NEO jets.
“We are looking at replacing our entire fleet of Airbus A320 CEOs…our plan is to completely replace them with Airbus A320 and Airbus A321 NEOs…by 2028,” Reyes said, noting that the carrier is “very committed” to completing this endeavor.
NEO planes use 20 percent less aviation fuel than CEOs, making these jets more fuel efficient and reducing their carbon emissions.
“We’re expecting 51 brand new NEO aircraft starting from now until 2028,” he added.