As the aviation sector accelerates its decarbonisation agenda, most focus has been on long-horizon technological shifts: Sustainable Aviation Fuel (SAF), hydrogen propulsion, and electric aircraft. But while these innovations are necessary for long-term transformation, the industry is overlooking a simpler, more immediate, commercially viable lever: demand-side inefficiency. Specifically, airlines have been failing to fully monetise short-term, price-sensitive demand segments, leaving substantial capacity and revenue unrealised, while missing out on an opportunity to lower their carbon footprint levels per passenger.

This is not an operations issue, it is the result of an easily adjustable misalignment between evolving consumer behaviour and outdated inventory and pricing logic.

Despite a growing consumer base and the optics of scarcity, airline capacity remains structurally underutilised. Global load factors reached 83.5% in 2024, and, while representing an increase of 13.6 percentage points compared to 2023, it implies that approximately one in six seats flies empty. These unsold seats carry a dual cost: they represent foregone revenue for companies and increase per-passenger emissions, eroding both financial performance and ESG outcomes.

Simultaneously, the price of air travel has surged. In 2024, average flight ticket prices rose by 25%, the steepest annual increase since 1989. This was mainly driven by fuel price volatility, labour shortages, and global inflation. While these pressures have impacted all consumers, the burden is disproportionately felt by younger, price-sensitive travellers, particularly students and entry-level professionals who are starting to be priced out of the market.

This dual reality, excess capacity and constrained access, suggests an inefficiency in how airlines manage marginal demand. Rather than treating unsold seats as salvageable revenue, most carriers operate under a pricing architecture optimised for early-booking, higher-yield customers, discouraging last-minute travel. The result is a systemic overpricing of late-stage, low-elasticity opportunities.

This inefficiency also reflects a wider shift in travel behaviour. As sustainability moves from a niche concern to a mainstream priority, consumers and industries are increasingly prioritising eco-friendly choices. Today, 74% of travellers believe minimising their environmental footprint is essential when flying.

This shift is marked by young people and is not only cultural but also commercial. As Gen Z progressively becomes a more powerful consumer bloc, their demand for sustainable and affordable travel is forcing the aviation industry, amongst others, to reevaluate long-standing assumptions. The airline industry is expecting changes in how it prices its services to adapt to consumer behaviour driven by Gen Z.

Today’s younger travellers are price-sensitive, purpose-driven, and experience-focused. They value travelling and place lived experiences as more important than materialistic items. Above an undeniable climate consciousness lies the desire to explore the world, discover new cultures and learn new languages.

Gen Z is also different in the sense that their travel destinations are driven by fast-moving digital platforms, notably TikTok and Instagram, where trends evolve in real time and destination interest can spike overnight. These act as decentralised engines of demand, reshaping where and when people want to travel based on virality, visual appeal, and perceived authenticity. This behavioural volatility introduces a level of unpredictability that traditional revenue management systems, built on historical data and linear booking curves. As a result, airlines face growing friction between static forecasting models and the dynamic, sentiment-driven nature of modern travel decision-making.

Considering the apparent market imperfections mentioned above, there is a clear commercial rationale for developing more agile mechanisms to monetise unsold capacity. In any fixed-cost industry like aviation, incremental revenue from distressed inventory (i.e., unbooked seats close to departure) is disproportionately profitable, as the marginal cost of accommodating an additional passenger is negligible. Yet few carriers have developed the ability to dynamically reprice and reallocate this capacity to underserved demand segments.

Addressing this inefficiency does not require radical innovation. Alternative flexible demand pockets, such as students, freelancers, or remote workers, could and should be addressed with dynamic, access-controlled offers that sit outside the traditional distribution systems that dominate the industry.

Doing so would also support emissions efficiency: fuller flights mean lower per-passenger CO₂ emissions, offering an operational route to decarbonisation that alone won’t solve the airline industry’s environmental issue, but that complements longer-term SAF and propulsion strategies. By better matching supply with currently excluded segments, airlines can enhance yield and reduce carbon intensity per passenger in easier ways developing new fuels.

As macroeconomic pressures converge with changing traveller expectations, airlines face a strategic imperative: evolve from rigid yield maximisation to more dynamic demand flexibility. The post-COVID market is fragmented, volatile, and increasingly driven by younger and slightly less predictable consumers.

At EcoSeats, the startup my co-founder and I are building at the moment, we believe the airline industry’s next opportunity is not in flying more or flying less, it’s in flying smarter. EcoSeats is working on bridging the gap between sustainability and affordability by unlocking discounted, last-minute flights for students. By filling otherwise unsold seats, we not only make travel more accessible for young people but also contribute to reducing per-passenger carbon emissions on flights that are already operating.