LYON, France—Future carbon-neutral commercial aircraft should benefit from a favorable tax policy to help the technology gain traction, Airbus CEO Guillaume Faury said.

Hydrogen, Airbus’ favored fuel option to make passenger aircraft green, will cause fuel costs to increase for carriers, at least at the beginning. Later on, the proliferation of hydrogen technology will bring down the cost, Faury said. The Airbus CEO was speaking Nov. 26 during a video debate organized by French financial daily Les Echos.

Suitable rules may help the starting phase. “What the lawmaker can do is to make conventional, carbon-based flying artificially more expensive. Or to make the final cost for the consumer or the carrier lower than it actually is with decarbonized aircraft. This would last until expansion helps them becoming competitive,” he said. He likened the hoped-for incentives to those that are helping electric cars become more popular in Europe.

“We know that, anyway, entry into service will be an economic challenge,” he emphasized.

More generally, Faury called for a regulatory framework that would foster innovation and financial risk-taking in Europe. “Fragmentation is a challenge and the current framework is, too,” he said.

But Europe may have a competitive edge in environmentally friendly technologies. Thanks to the public’s appetite, they could be developed earlier on the continent. “And we think they are the future of aviation,” Faury said.

He also explained that eVTOL (electric vertical take-off and landing aircraft) projects—like the Vahana two-seater and the CityAirbus four-seater—should be primarily seen as low-cost demonstrators for future technology on commercial aircraft. “There will be a market eventually, but profitability will be tricky at the start,” he said.

He said they should be thought of as sandboxes for engineers to experiment with technologies for a small investment, with shorter development lead times and without the safety requirements of commercial aviation. If successful, the eVTOLs could later be scaled up to become passenger aircraft.