American Airlines and Gevo sign $2.75 billion SAF agreement – Airways Magazine
DALLAS – Gevo announced this week that it will now sell Sustainable Aviation Fuel (SAF) to American Airlines (AA). Under the terms of the agreement, Gevo will sell 100 million gallons of SAF per year for a period of five years.
Under the terms of this contract, Gevo will begin delivering SAF in 2026. Gevo expects that over the course of five years, the arrangement should yield approximately $2.75 billion in revenue, including the value of environmental benefits. The agreement with AA represents the single largest fuel sales contract Gevo has ever signed with a customer.
The airline is a member of the oneworld global alliance, with whom Gevo signed a memorandum of understanding (MoU) earlier in 2022. This SAF agreement is covered by the memorandum of understanding, which paves the way for the 14 airlines alliance leader to purchase 200 million gallons of SAF per year from Gevo’s future business operations.
The addition of more committed airline partners under this agreement to purchase SAF is conducive to Gevo’s goal to generate and market one billion gallons of SAF by 2030.
Oneworld announced its commitment to long-term industry sustainability by announcing a 2050 carbon neutral target in September 2020, making it the first global airline alliance to do so. After making this commitment, the alliance set an interim target of having member airlines employ SAF at a rate of 10% by 2030.
Comments from Gevo, American Airlines
“The expansion of global SAF market development has reached an exciting point,” said Dr. Patrick R. Gruber, CEO of Gevo.
“While there is an enormous amount of work to be done to bring all of the critical elements of net-zero carbon SAF to market, our MoUs with amembers of the global alliance and this subsequent commitment by American Airlines demonstrates the significant momentum that is building for these types of products. I am delighted that Gevo is set to continue to lead the development of this product.
“Today’s announcement is a historic step forward for American and our industry as we strive to reduce our carbon footprint,” said Jill Blickstein, vice president of sustainability at AA.
“Using SAF is a cornerstone of our airline decarbonization strategy. While this historic investment represents significant action on the part of American Airlines, achieving progress at the scale and pace we need requires essential political action in Washington and at the state level. Alongside our aglobal partners, we are proud to be leading the way in the transition to SAF and making progress towards our shared climate goals.
American Airlines push for zero-emissions operations
During the Farnborough International Airshow, zero-emission aircraft maker Vertical Aerospace secured delivery slots and pre-delivery payments from AA.
In its initial conditional pre-order of up to 250 aircraft, with an option for another 100, announced in June 2021, AA has reserved delivery slots for the first 50 VX4 aircraft. With the new agreement, the parties will expand their current joint task force to study the future of advanced air mobility and prepare for the entry into service of the VX4 eVTOL.
The agreement to make pre-delivery payments and confirm slot reservations for the first Vertical 50 aircraft is the first of its kind for a major airline in the eVTOL industry, and represents a key milestone in their collaboration.
N834AA American Airlines Boeing 787-9. Photo: Tony Bordelais/Airways