American Airlines Bets on Hydrogen-Electric Engines Despite Limits

Skift Take

Airlines have been making larger investments in hydrogen-electric startups as they look for ways to become more sustainable. But it’s unclear if such engines can be used on a wide scale.

American Airlines announced Tuesday that it entered a conditional purchase agreement for 100 hydrogen-electric engines with startup ZeroAvia to fuel its regional jets. 

ZeroAvia has been developing hydrogen-electric engines for commercial aircraft that can emit close to zero emissions, another potential way the airline industry has been eyeing to become more sustainable. 

“This announcement will help accelerate the development of technologies needed to power our industry and uphold our commitment to make American a sustainable airline so we can continue to deliver for customers for decades to come,” American CEO Robert Isom said in a statement. 

American is not the only airline to make an investment in hydrogen-electric engines. For example, United Airlines and Alaska Airlines invested $35 million in ZeroAvia in 2021.

Growing Appeal but Many Barriers to Sustainability

Many airlines have been interested in the possibility of using hydrogen engines to make flying more sustainable but there have been some caveats. 

Universal Hydrogen, another startup that had successfully flown a hydrogen-powered aircraft in 2024, folded just days ago after going through $100 million of investor capital. 

The startup was labeled by Fast Company as one of the “most innovative companies of 2024.” Universal Hydrogen CEO, Mark Cousin, wrote to the board that the company had failed to secure enough financing to move forward, according to a report from The Seattle Times. 

Another major issue with hydrogen-electric engines is that they can only power smaller aircraft. When Universal Hydrogen flew the first regional jetliner powered by hydrogen-electric engines, it could only use one such engine due to safety issues. 

Since the technology isn’t yet developed for hydrogen-electric engines to power larger planes, most of the investment has been limited to regional ones instead. But even with regional jets, hydrogen-electric engines tend to take up more space than jet fuel, potentially leaving less room for passengers. 

ZeroAvia founder and CEO Val Miftakhov said the startup was on the path to serving larger airlines when referring to the deal with American. 

“The solutions that can serve the largest airlines are within reach, and the clean future of flight is coming,” he said in a statement. 

Airlines Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance. 

Read the full methodology behind the Skift Travel 200.

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