The Aviation Industry and the Stall in Aircraft Innovation

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Last Updated on: 19th June 2025, 03:07 am

Lack of innovation is putting aviation’s decarbonisation targets at risk, new modelling suggests.

Summary: The state of play in aircraft innovation

Decarbonising aviation requires a sector-wide approach — from measures to address the industry’s continuing growth, to ensuring that truly sustainable aviation fuels (SAFs) are prioritised. Aircraft technology also has a key role to play, but the onus so far has been on airlines and energy providers, with plane manufacturers largely left off the hook.

While manufacturers have been quick to highlight their contribution to aviation’s green transition — producing more efficient aircraft — the majority of these new models are re-engined versions of existing planes. The most innovative projects from the world’s leading aircraft original equipment manufacturers (OEMs), Airbus and Boeing, are either delayed or paused.

This suggests a clear decline in aircraft technology innovation over the past decade. It appears that this trend is set to continue, with no new aircraft models expected from Airbus or Boeing in the next ten years either. At a time when we need aviation to significantly increase its efficiency and reduce its energy use and emissions, these delays in innovative aircraft technologies are hampering the industry’s green transition.

The root causes are clear: a lack of market competition, and no effective policies pushing manufacturers to innovate. For aircraft technology to have the chance to make a dent in emissions and energy consumption by 2050, this briefing highlights the need for strong policies to spark the truly radical innovations that the aviation sector needs.

Our modelling suggests that European aviation could be up to 13% more efficient by 2050 in an ambitious yet achievable innovation scenario — saving enough renewable electricity to power 27 million heat pumps. This scenario assumes that cleaner, more advanced technology, including zero-emission aircraft, will be developed and widely used, following expert forecasts. If manufacturers went even further, efficiency gains could increase to 17%. This shows that aircraft technology can provide a significant contribution towards meeting the EU’s aviation climate goals in 2050 and beyond.

To unlock aircraft technology’s full decarbonisation potential, T&E makes the following recommendations:

• Strengthen the “polluter pays” principle, including an extension of the EU Emissions Trading System (ETS) to cover all flights departing Europe, and jet fuel taxation through the Energy Taxation Directive (ETD), to bridge the price gap between current polluting aircraft and future green technologies.
• Set and implement robust aircraft CO₂ standards, either at international or European level, to incentivise the production and design of new, more efficient aircraft models.
• Maintain and diversify EU support to aircraft research and development, including instruments for innovative companies developing disruptive technologies, such as zero-emission aircraft and infrastructure, to help them enter the market.
• Update relevant EU aviation legislation, including airport legislation and public service obligation (PSO) routes under the Air Services Regulation, to favour the use of latest generation and zero-emission aircraft.

Part 1: The role of aircraft efficiency in aviation’s green transition

Aviation is one of the most emission-intensive modes of transport, and an industry that is projected to keep on growing significantly. Decarbonising this sector requires attention from all angles — from measures to address the industry’s unsustainable growth, to ensuring that the right kinds of sustainable aviation fuels (SAFs) are prioritised across legislation and financing mechanisms. Within this context, aircraft technology also has an essential role to play in reducing the emissions and energy use from the sector.

Over the past decades, new aircraft designs have resulted in greater efficiency, helping to reduce fuel consumption and carbon emissions per passenger — albeit driven by commercial pressure to deliver planes that are cheaper to operate, rather than by environmental concerns.

These gains, however, have been increasingly marginal and largely outpaced by growth in air traffic, with aviation emissions increasing faster than any other transport sector in Europe since 1990. After the COVID setback, recent T&E analysis showed that air traffic and emissions have almost bounced back to 2019 levels, with flights within Europe even exceeding these in 2024.

Looking ahead, new technologies could help bring about greater efficiency gains. On the one hand, improvements in aerodynamics and propulsion systems, and weight reductions, can increase the tank to wing (TTW) efficiency, reducing the energy consumption of the aircraft. On the other hand, zero-emission (ZE) propulsive technologies can make direct use of electricity and hydrogen, increasing the well to tank (WTT) efficiency, and lowering the amount of renewable electricity and other energy sources required to decarbonise aviation. This briefing shows that in both TTW and WTT efficiency, radical disruption — rather than small-step changes — will be needed to make a dent in the emissions reduction of the sector.

The above-mentioned technologies will play an essential role in meeting aviation’s climate goals, especially under the EU’s SAF mandate, ReFuelEU, which sets blend targets that the sector will need to meet up to 2050. Since the supply of truly sustainable feedstocks for bio-based SAF is limited, lower energy demand from aviation will minimise the risk of unsustainable SAFs flooding the market, which can increase aviation emissions. E-fuels from renewable hydrogen and captured CO₂, on the other hand, are green and scalable, but energy-intensive. Working to reduce aircraft fuel consumption altogether could help meet the synthetic fuels sub-target under ReFuelEU and the sector’s wider decarbonisation goals.

Commercial aircraft innovation is on the decline

Over the past ten years, we have seen far fewer new aircraft models entering the market. This trend appears to be set to continue, especially on the narrowbody and widebody markets, which are dominated by the two global giants: Airbus and Boeing. The last time either of these companies — whose aircraft will be responsible for an estimated 95% of the existing in-service fleet’s CO

₂ emissions — introduced a new, clean sheet design aircraft to the market was in 2015. Since then, their efforts have gone into re-engining existing airframes, such as Airbus’ A320neo and A330neo, and Boeing’s 737MAX and 777X.

While there has been talk of new, far more innovative technology — such as Airbus’ ZEROe programme and its hydrogen aircraft, and Boeing’s Transonic Truss-Braced Wing concept — these have yet to see the light of day, having either been delayed or paused. With no new aircraft designs in sight from the European or US manufacturers, the decline in commercial aircraft innovation appears set to continue for at least another decade.

Rather than bringing new models to market, aircraft manufacturers have focused on fitting new engines into existing models. These re-engined planes are based on existing airframes, some dating back to the 1980s — in the case of Airbus’ A320 family — and to the 1960s when it comes to the Boeing 737 family. Although these re-engined planes are more efficient than the models they replaced, they have lower efficiency gains than what would be achieved through a new, clean sheet design using the latest advancements in aerodynamics and new materials.