| Summary: | The upcoming implementation of the ReFuelEU Aviation Initiative presents both challenges and opportunities for the European aviation sector. Starting January 2025, the EU’s aviation fuel mix must include at least 2% Sustainable Aviation Fuel (SAF), leading to higher operating costs for airlines due to SAF’s higher price than fossil kerosene. Additionally, the entire fuel supply chain will need to adapt, marking a significant step in the sustainable transition of European aviation. This study examines the impact of the EU SAF mandate on Icelandair, an airline operating at the edge of the European Economic Area (EEA), and its strategic stakeholders. Following a qualitative research approach centred on a single case study, the study combines interviews with practitioners and document analysis to provide a detailed perspective on the implementation of the mandate in Iceland and a broader view of the European aviation industry’s preparations for this transformation. The results reveal a great uncertainty surrounding all parties involved. This uncertainty stems from the widespread ambiguity in the current implementation of the Regulation and the possibility that radically different scenarios could unfold, leading to opposing consequences, primarily for airlines. Carriers such as Icelandair could strengthen their competitive advantage at the expense of their environmental strategy if the flexibility mechanism established under ReFuelEU is implemented without any supporting measures. Contrarily, their competitiveness on transatlantic routes could be severely threatened if the EU mandate is implemented homogeneously across the EEA. In conclusion, to cope with the uncertainty that marks this preparatory phase of the mandate and to be prepared when the SAF is finally distributed across the EEA, airlines should take a proactive role in tackling climate change and seek to collaborate with strategic stakeholders to ensure alignment with the increasingly complex environmental policy landscape and the pursuit of their ...
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