As the aerospace industry gathers in Montreal, the challenges of getting to net-zero are laid bare.
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Rush Transcript:
Joe Anselmo:
Welcome to this week's edition of the Check 6 podcast. I'm Joe Anselmo, Aviation Week's editorial director.
The commercial aviation and business aviation industries have both committed to achieve net zero emissions by 2050, and the daunting question of how that ambitious target can be met was front and center at this week's Aero Montreal International Aerospace Innovation Forum in Montreal, Canada. I was at Aero Montreal this week, along with Graham Warwick, Aviation Week's chief technology editor, and Michael Bruno, our lead business editor. Graham and Michael join me on this podcast to talk about what we heard -- and what we think about it.
Graham, let's start with you. A couple of my key takeaways were: There could be slower growth in air transport, and there's going to need to be a so-called SAF Marshall plan to get these enormous quantities of sustainable aviation fuel that's going to be needed to get to net-zero. What were your key takeaways?
Graham Warwick:
So I lost count of the number of times that they mentioned SAF over the two days that we were there. They painted a pretty challenging picture of what's needed to scale up SAF. Now this was an innovation forum. So fundamentally the kind of approach that was taken was that they see it as a bit of an innovation challenge. Can we bring innovation? Can Montreal cluster play a role in bringing this to fruition?
So overall, SAF was one piece of it. There was also a lot of discussion about electric and hydrogen, where that would play, and a lot of talk about the infrastructure requirements to support that transition to a different form of energy or a different form of propulsion. So, what struck me was I saw across all of the sectors that they're talking about, whether it's short range, EVTOLs for electric, air taxis, all the way up to Airbus and its hydrogen short-haul airplane plans, this kind of common theme that they need government support to deploy this technology.
And it just struck me that when you had all these people in a room talking about these different sectors of innovation and new propulsion, there was sort of common needs. They need the airports to become energy hubs. They need the airports to be able to charge the aircraft. They need the airports to be able to refuel hydrogen airplanes. But airports are also transportation hubs, there's trucks coming in, there's all the people who drive there, et cetera.
So I was feeling that maybe there's a theme emerging that where governments can play best in all of this is to put the enabling infrastructure in and let industry layer on top of it what it wants competitively, but for government to say, "Okay, we're going to enable this energy transition. We're going to let the airports electrify and hydrogenify. We're going to let the airports become places where they generate power or where they generate hydrogen."
I think as we move out of the technology development into the looking at how we get this into the market, the people's focus is really becoming on this enabling infrastructure that we need to put in place. So I think that was the theme I saw coming out of it.
Joe Anselmo:
Michael, as Graham pointed out, this show was focused on the Montreal cluster, but it was broader than that. I mean, you had all the major companies represented there, Airbus, Boeing, Bombardier, Pratt & Whitney, startups, venture capitalists. What were some of your takeaways as business editor from the event?
Michael Bruno:
Yeah, so Aero Montreal this year was definitely sort of a microcosm of the summer air shows that we've been going to, and it was exciting for such a large group of people to be back together, coming from all over. You could say not only all over North America, but also from Europe as well. It's truly wonderful for the industry to get back together. And that energy alone reminds everyone of the passion and the reasons we do these jobs in the industry we cover.
So definitely excitement, definitely talk of recovery, how we're on our way. Nobody was living in a fantasy world of saying every bad day is behind us. And in fact, I think Joe, you alluded to this in the beginning. A couple of the interesting things that I heard were yes, sustainment, sustainability, big deal, urban air mobility, big deal. These are both right in Graham's wheelhouses, and he can talk a little more about what we heard. But I heard about the economic forecast and about don't quite get your hopes up that things are going to be roaring back any faster than they are now. And one of the reasons is because of what's happening in China with the zero COVID policy, and about frankly, politics there and the way the political calendar works is you're not going to see a major recovery in Chinese flying activity until -- could very well be late next year, simply because that's how the elections work and making sure that the communist party keeps its hold on power there. And so they may not take a chance with more travel and more people traveling around and therefore need more aircraft until much later.
There's also generally a slowdown effect when it comes to sustainability on the whole commercial aerospace sector. Net zero is a big, big challenge in many ways, and not just technologically. It's also business models. How are you actually going to not only make money while you face this challenge, but how are you going to make enough money that fuels the investment you need to make some of the changes that won't get paid for by government? Graham just alluded to the fact that the entire industry, whether you're an airline, a lessor, an OEM, a small supplier, everybody wants government to step in and do more. Now every industry wants that across the board. By doing more, that starts with money, but there's just frankly, a limit as to how much any government's ever going to spend. And industry itself has to come up with the money in doing that and remaining profitable is a big challenge.
And then finally it was almost a broken record in the challenges we've heard at the other air shows and conventions so far this year. Workforce, the cost of inflation, managing this disruption that's happening everywhere, whether you're a mom and pop shop all the way up to the OEM supply chain, long lead times are just getting longer. Raw material costs are exploding and workers, talent and recruiting and retaining is still perhaps the number one challenge that companies can't get their heads around.
Aero Montreal provided a very wonderful tour of the local industry to some of us reporters. Went out and talked to a supplier, and this supplier is very experienced in the industry. And when you talk to the CEO, he's had a passion for it for decades. And he's saying, "I don't see other people with passion." He's having difficult recruiting. And he just doesn't see where there's end in sight.
And I'll end my opening remarks with a couple of statistics. So, there are about 210 aerospace and defense businesses around Montreal in the Quebec region. And they employ about 35,000 people directly. They say over the next 10 years, they need 38,000 people to be hired. And it's just a daunting number when you think about it. It's more people than work there now, and they're struggling to fill those roles.
Joe Anselmo:
Full disclosure. Michael, you, Graham, and I in our capacity as journalists all participated in this event. We moderated panels, interviewed people. Graham, I interviewed Eric Martel, the CEO of Bombardier on stage. And one of the things I found really interesting was when we talk about sustainability, we're always talking about SAF, hydrogen propulsion, hybrid electric. He talked about Bombardier's EcoJet project, which is really focused on aerostructures. They're looking at a blended wing body, just that alone could achieve a 20% improvement in fuel burn. We're not used to seeing shapes of airplanes radically altered, are we? Is this for real?
Graham Warwick:
Well, I mean, I think an indication of the size of the challenge they face is that people are willing to consider a change of how airplanes look. We've settled into a very successful tube and wing formula that we've now had since the [Boeing] 707, essentially, and it works really well. But you also did an interview with Pratt & Whitney Canada. The CEO said, “We do 1-2% year improvement in performance on turbine engines. And we've done that for decades. That's really good, but it ain't fast enough. So that's why we're looking at electrics, why we're looking at hydrogen.” But even that's not fast enough. So we are beginning to seriously look at changing the way airplanes to look for aerodynamic and other improvements that we could add to the propulsion improvements.
So NASA, as we already know, NASA's got this thing called a Sustainable Flight Demonstrator program. And it's going to look at a change of configuration in aircraft. It could be Boeing's trust based Transonic Truss-Braced Wing, which is about a 10% improvement just from the configuration. Then you add the engines and everything like that. So ,Bombardier has -- and this EcoJet is the result of more than a decade of research inside Canada. It actually started looking for the next big step in regional jets. They looked at a 100-seat regional jet, where the origin of this shape is in a regional jet. But then when Bombardier got out of the commercial aircraft business, they kind of pivoted the research towards a business jet. Now, they call it blended wing body, but it's not your classic Boeing blended wing body. It looks like a flying manta ray. This thing is not as radical as that. It's really what's called a lifting fuselage aircraft.
So, it has a broad fuselage that generates about 30-40% of the total lift on the aircraft. And then in Bombardier's design, it has a wing that we'd all recognize. It looks like the wing off a Global Express or a global 7500 or something. It's a very efficient, long slender wing that's attached to this broad body.
And the reason they're doing it is that business aviation faces some very unique sustainability challenges because of the mission of a business aircraft. By and large, the things that people look for in a business aircraft are a large cabin and long range. Now, if you go to hydrogen, there's nowhere to fit the tanks. You can't get the tanks in the airplane and still get a big cabin. You'll get the range, but you can't get a big cabin. And the other one is, if you go electric, you don't get the range. So, they're looking at how do we basically get a business jet that has a large cabin, long range, that gives you this dramatic improvement just from the aerodynamics. And they're saying 20%, that's probably optimistic, but even if they get 15%, that's a big delta.
Joe Anselmo:
Graham, we should note that this is not just something on paper. They've flown a small scale prototype of this, right?
Graham Warwick:
Yeah. And they're about to fly a bigger one. He was being very coy about where they're flying it in Canada, and he challenged people to go find with the airport that they're flying it at. So everybody in Canada, please start looking at your local airport and take a picture if you see something weird flying. And they are already discussing the possibility of doing a crude demonstrator, a really big scale crude demonstrator aircraft. That's where the government would come in. It would be a technology demonstrator. That's where its industry partners would come to play. if they go that far.
Michael Bruno:
Graham talked about really, really exciting technological differences and advances. But if I can be a little bit of the sour note and rain on the parade, the thing is though at the exact same time, these presentations are being put up in the conference center and hundreds of people are looking at it. And we're all looking at these blended wings and whatever, and talking about new power sources and that can generate some real fear inside the supplier base.
Because as Graham noted, we've been using the same tubular design and the same oil-based engines for decades now. And when you talk about such significant change to the base technology of commercial aviation, you're talking about incredible disruption within the supply chain. So, on the one hand we had this excitement over the technology. But one other thing I sense is suppliers -- in particular, lower down in the tier -- they really, really would love a better idea as to where this technology is going. And Graham, I'm curious, did you get a sense from the conference either past couple of days, what was said on stage or what you heard directly, about any more decisions? Are we leaning one way versus another when it comes to any of this huge technological change?
Graham Warwick:
I sense maybe a kind of an ordering of priorities is underway. This sustainability challenge has kind of come up quickly in aerospace terms, in sort the speed with which aerospace changes. So sustainability has come up quickly and also the long development time for anything we do in aerospace. So, there's a kind of an urgency now, even though nothing might hit the runway in for 10 years or 20 years or something like that. So I think what I'm seeing is as we retire some of the technological risks for some of this technology -- we know how to make SAF many, many different way -- it becomes more of a deployment challenge. And I think folks are beginning to see that there's an order in which you do these things that the first priority is to get SAF scaled up. And while you're scaling SAF up, you can move forward these other pieces.
There was a very, very good point. I think again, it goes back to Pratt & Whitney Canada. They said, and it was actually, Alan Newby of Rolls said it. And a couple of other people said it. He said, "We are not going to stop improving the turbine engine. We are not going to stop improving the efficiency of airplanes. We've got to layer all this stuff on top of that continued improvement in efficiency."
So, I think you've got that underlying, let's just keep heading in the direction we've been heading for decades. Then as these other technologies get to a point where they make sense, you layer them on top. So, we keep improving the turbine engine, bring in SAF, then bring in electric, then bring in hydrogen. But I think we're seeing a bit of an ordering in which that happens. And some of it is, as you point out, they all want government support and the governments are telling them, pick one of these, pick a horse to ride for at least the next five years. Then you can change your horse, but for the next five years, pick a horse.
Michael Bruno:
There's one other thing, just Joe, before we go on. And I found it very interesting. I don't know about you gentlemen, but I was impressed by the amount of time given, talking about carbon offset maneuvers that the industry can get behind and perhaps even lead, whether it's Airbus looking into taking CO2 out of the air and pumping it into the ground, or just how many trees you're going to plant. But there does seem to be a growing awareness within the industry that as part of meeting this net-zero sustainability goal, there are going to be things that are very much non-aerospace that are going to be required in order to help us get there. And I think we have known that all along, but it's very interesting to hear industries start to say, "You know what, we're going to have to put some money behind that, too."
Graham Warwick:
If you actually think about what United Airlines has done and United isn't a knowledge leader in this. They not only were the first to really invest heavily in SAF. They've also the first to invest in carbon capture and removal technologies. I think the airlines or the industry realizes that you have also got to be visibly working to remove carbon as you continue to produce carbon. I think that's what the public will ultimately expect. They will expect this industry to be actively removing carbon, not just mitigating it, but taking it out of the atmosphere. And so I think the leaders like United are signaling that we're going to have to do that.
Joe Anselmo:
Graham, I wanted to ask you, at Aero Montreal I heard that argument made multiple times that, “Hey, aviation might be only 3% or so of global emissions, but other industries are tackling this, and if aviation does nothing, that percentage will soon mushroom.” On the flip side, I've heard critics say, "It's going to cost trillions of dollars to scale up SAF or put an infrastructure in for hydrogen propulsion. Why don't you just invest this money in nuclear power if you're really worried about climate change and global warming." I mean, what do you say to this?
Graham Warwick:
It's interesting. That is the driver, right? The driver is not aviation's absolute emissions, right? It's the growth of those emissions relative to other sectors. That's why we're doing this.
Michael Bruno:
Relative to other sectors that are going to be able to dramatically cut carbon emissions.
Graham Warwick:
Yes. Like trucking, shipping. Shipping's going to ammonia. Trucking's going to fuel cells. Vehicles are going to electric. All of the heavy industries are going to renewable energy and carbon removal. It leaves aerospace as the one that's the heart. So we just become the big polluter without... We could stop. We could stop growing today, and we'd be the biggest polluter in 20 years time. That's what drives this.
Now you mentioned nuclear power. I'll tell you now, if we committed to nuclear power tomorrow, we could make SAF by the billions of gallons within years. It's the availability of the renewable energy to produce SAF going to be the biggest drag on this industry going forward. It takes a lot of energy to produce SAF. It takes a lot of energy to produce hydrogen. It takes a lot of energy to charge batteries.
All of these solutions that aviation is looking at is going to take a big, big chunk of the available renewable energy. And it all has to be based on renewable energy, or it's not green. So, I think we have just got to start saying that. And Rolls is working on these things called small modular reactors. If you put a small modular reactor down, you could drive 2, 3, 4 SAF plants in an area that would capture carbon, produce hydrogen, produce SAF on massive scale, and it wouldn't be polluting in the process. You've hit all of my favorite hobby horses. We can't put a nuclear reactor in an airplane, but we can use nuclear power to power airplanes indirectly. We have got to start pushing for that piece of the equation.
Michael Bruno:
There's one final challenge though, even at the end of all that I think is worth remembering. And that is all of this government support that could go into helping SAF develop and whether it's using alternative and other sustainable power sources to help make the SAF. You're talking about things that are not aerospace specific. And so that entails a whole lot of target audiences and investors that are outside of aerospace. So, if you try to go down the route of getting a bunch of nuclear plants built, that's an entirely different industry that's going to benefit from that government investment, and aerospace could very well be left saying, "Hey, wait a minute, we still need a little bit more direct support here."
So, it's very challenging going back to how are you going to do this? What the roadmap is. Believe it or not it seems almost nobody, at least inside industry, disagrees with the end target anymore, what we're trying to go for. But getting there, I just don't know that we're any closer to figuring out the strategy for doing it. And I'll be interested if by the next Aero Montreal there's any more consensus.
Joe Anselmo:
Well, I'm not sure Graham didn't just figure it out for us. We'll have to archive this podcast. Graham might have solved the industry's problem and we'll have to put you on stage next year. Guys, thanks for a very insightful conversation. By the way, Graham was referring when he said Pratt Canada's president, that is Maria Della Posta, who was on stage making those comments.
That is a wrap for this week's Check 6. Special thanks to Air Canada for getting us all home on time. Also, special thanks to our producer in New York, Alex Harrell. And to our listeners, one final request. If you're listening in Apple podcasts and want to support this podcast, please leave us a star or write a review. Have a great day. And thank you for your time.
