The aviation market will have to make some significant changes as governments seek to mitigate the risk of climate change.
On the IB Talk podcast, Steadfast co-founder and CEO Robert Kelly talked about how the aviation industry is a major contributor to greenhouse gas emissions and climate regulations’ effect on the aviation insurance market.
“The biggest polluter in the world is jet aircraft flying,” Kelly said. “I subscribed to the NASA climate change analysis … And when all the planes stop flying, CO2 [emissions] dropped dramatically.”
As people become more climate-conscious, they realise that flying, especially using jet aircraft, is a major contributor to carbon footprint.
“If you accept that aviation has to exist, then it cannot exist in the current system of propulsion,” Kelly said. “So what you've now got is the realisation that smaller planes will come back. It's a complete paradigm shift. You've got the aviation industry working on, believe it or not, going back to propeller-based turbo jet engines.”
As the insurance industry shies away from coal, Kelly believes the same thing will happen to jet travel.
“I think in many ways the aviation industry will get to that stage as well, where there'll be pressure to say, do not insure those CO2-belching, big [aircraft] and only insure these eco-friendly ones that are doing the right thing. But again, like coal, the insurance industry has got to accept that.”