Alaska Air Group is taking a measured approach to sustainable aviation, focusing on both immediate fuel alternatives and longer-term aircraft innovations. With thin 2.5% profit margins and the technical constraints of flight, the company is carefully selecting its low-carbon investments. The airline is partnering with Breakthrough Energy Ventures, backed by Bill Gates, to accelerate adoption of sustainable aviation fuel (SAF). Ryan Spies, Alaska Air’s managing director of sustainability, outlined the carrier’s dual-track strategy at Bloomberg Green in New York during Climate Week NYC.
Strategic SAF Partnerships
Aviation accounts for 2.5% of global CO2 emissions but up to 5% of warming when accounting for high-altitude effects. SAF, made from feedstocks like used cooking oil, agricultural waste, and captured carbon, is the primary short-term solution, though it currently supplies less than 1% of aviation fuel worldwide. To close the supply-demand gap, Alaska Air joined other carriers and Breakthrough in launching a $150 million fund to support SAF producers. The fund leverages Breakthrough’s expertise to assess the best feedstocks, chemical processes, and economic models for scaling production.
Market conditions are improving the economics of SAF. Spies noted that six months ago, SAF was significantly more expensive than conventional jet fuel, but recent volatility, including disruptions from geopolitical tensions, has made prices more competitive. The market volatility has also heightened interest in SAF as a tool for U.S. energy independence, rather than just an environmentally friendly alternative. In January, Pacific Northwest officials from organizations including Alaska Air, Amazon, Boeing, SkyNRG and government representatives launched the Cascadia Sustainable Aviation Accelerator to establish the region as a SAF hub.
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Next-Generation Aircraft Bets
Beyond fuel, Alaska Air is investing in future aircraft designs. The company has backed JetZero, which is developing a blended-wing body plane projected to cut fuel consumption by half. A prototype is expected to fly next year, with commercial service targeted for 2030. Spies described the potential impact of a 200-plus-passenger aircraft with 50% better fuel efficiency as a “game-changing development.” Alaska Air is also supporting Ampaire, a hybrid-electric startup Spies likened to “the Prius of aviation,” initially designed for smaller eight-seat planes with plans to expand to Hawaii routes.
While new aircraft designs may transform the flying experience over the next decade, Spies emphasized that progress in aviation sustainability will remain gradual. Advancing aviation sustainability remains a slow process and one of the hardest sectors to decarbonize, Spies said, “because of pure physics.” The company, parent of Alaska Airlines and Hawaiian Airlines, continues to balance near-term SAF adoption with long-term bets on breakthrough aircraft technologies.