Aviation Sustainability and the Environment, CAPA 29-Sep-2022

This CAPA report features a summary of recent aviation sustainability and environment news, selected from the 300+ news alerts published daily by CAPA. For more information, please contact us. IATA director general Willie Walsh stated (27-Sep-2022) "Clearly, sustainable aviation fuels (SAF) has been a key driver in achieving our goals", adding the industry needs to see more production and widespread availability of SAFs. Mr Walsh said: "It is absolute nonsense to believe that you need to incentivise the industry or force the industry to buy sustainable aviation fuels when we are buying every single drop of sustainable aviation fuel that we can get our hands on".

He stated governments need to incentivise SAFs and traditional fuel suppliers must turn their attention to it. He added: "It is great to see some new entrants in the market, companies like Neste, who are producing sustainable fuels at volume and have ambitions to do so going forward. But we do need to see greater emphasis on the production of sustainable fuels". [more - original PR]

Original report: Transcript of Willie Walsh Media Briefing, 27 Sept 2022 Good morning from Montreal. We are here on the occasion of the 41st.

General Assembly of ICAO. There are a lot of expectations for developments out of the Assembly. And certainly, we will be very interested to see how the global government community can come together to assist the industry in achieving our goals, particularly in relation to climate change.

Transcript of Willie Walsh Media Briefing, 27 Sept 2022
But maybe just for context, I'll remind you what the industry has gone through over the last few years and where we currently are. So if we can move to this slide, you can see we went through a dreadful couple of years. The good news is we are making progress.

But when you see the losses in 2020 and 2021--and indeed, this year--where we are still expecting losses on the order of 10 billion US dollars, the industry will have lost around 190 billion US dollars in the three years since this pandemic started. And it is interesting, but if you go back and just look at the chart between 2010 and 2019, I think that was the first time the industry had made profits at an operating level, consecutively. And these were the best 10 years of the industry's history.

And interestingly, the average margin over that period was five and a half percent. And you compare that to the margins over the last three years - minus 29% - and minus 1.8%, is expected in this year, so very, very tough times. But I think great credit goes to airlines that have been able to manage through this crisis and it demonstrates the resilience of the industry.

Moving on, if you look at what we're seeing this year, it's expected that the US industry will be profitable. Again these are net margins, so margin as a percent of revenue; the rest of the global industry is lagging behind the US. But we're making good progress.

I think, Asia Pacific, unfortunately, will continue to lag the rest of the industry, given the ongoing border restrictions that exist there. This chart highlights the impact of border closures apart from the US, because the US industry as many of you will know, has a strong domestic network, which was largely untouched by government regulations or closures through the period. It is mainly international travel that has significantly suffered.

And moving onto the next chart, you can see that cargo has been resilient throughout; we've highlighted this on a number of occasions. The importance of the industry being able to pivot its operations from primarily a passenger-focused industry to a cargo-focused industry, to ensure that critical supplies remained available throughout the period, demonstrates how important this industry is to the global supply chain. The demand for cargo has been quite strong, remains resilient throughout the period, although slightly down in July.

I would expect that to be in the same in August, about 3%. We've seen domestic recovered strongly in July, and the same would be true for August. And that is principally the recovery of the Chinese domestic market as the internal restrictions within China were relaxed.

So good progress being made on international travel. You can see we're at about 68% of where we were in July of 2019. If you consider that in 2021, international travel was at about 25% of where we were in 2019, it shows that international travel has been recovering strongly through this period into the northern summer period where you would expect traffic demand to be strong.

This chart really does reinforce our view that border closures did nothing to prevent the spread of the virus but had a massive impact on international travel. As soon as those restrictions at the border were removed, we saw a strong recovery. Now as mentioned, the Asia Pacific region is lagging behind.

We see international travel within Asia Pacific still only about 25% and that plays into the pace at which it will recover. This shows our latest forecast in terms of when do we get back to 2019 passenger figures. So you can see for Africa we are expecting in 2025, Asia-Pacific, 2025, Europe, 2024.

We should be ahead of 2019 and 2020 for Latin American / Caribbean in 2024, Middle East in 2024, North America the strongest, 2023, and globally 2024. The biggest impact going into next year will be what happens in China and whether China starts to relax the situation. The situation in China, coupled with some of the economic headwinds that we are witnessing at the moment has made our latest forecasts slightly less optimistic than what we had previously looked at.

But in the main. we are still looking at a global recovery in 2024, with good progress being made in 2022 and 2023. The next slide shows just one of the headwinds that we're facing at the moment. I think everyone will be familiar with the rising oil price and the impact that energy prices will have on consumers.

Starting at the beginning of this year, we saw what we call the crack spread, the difference between Brent or crude price, and the price of jet, widened very significantly. Although we have seen crude prices ease in recent months, we are still seeing elevated prices for jet fuel, and some of that is understandable, given that the demand reduced significantly in 2020 and 2021. So refining capacity moved away from jet.

As that capacity came back online, we would have expected to see this crack spread narrow significantly. It is still at rates that are significantly elevated from historical rates, which you can see there going back to 2015. Between 2010 and 2019, the average spread was about 18%, so Brent averaged £80 a barrel throughout that 10-year period.

We have seen that spreads go over 60%. At the end of September, it was at 56%. Now it has eased a little bit, but still a very big difference between crude prices and jet prices, which means that we will see costs continue to challenge the industry in 2022, and in 2023.

Now, just to comment briefly on what we expect from the Assembly, the main focus for us will be on what ICAO calls their long-term aspirational goal. As most people are aware, the industry has agreed at our AGM in October of last year to target net zero in 2050. A very significant and ambitious target for the industry.

We have now aligned ourselves with the science and with the ambition of the Paris agreement. We will be looking to ICAO to get the global governments and regulators equally aligned and to agree on their long-term aspirational goal of net zero by 2050. I think anything shy of that, and this Assembly will be viewed as a failure.

While you know some of these targets are ambitious, and the expectation is high, we have to be realistic that in the current environment, anything short of ICAO agreeing to that long term aspirational goal of net zero by 2050 will be a huge disappointment. It is not going to stop us continuing on our roads to net zero by 2050. But I think it would send a very important signal to governments and help ensure that we get the right policy framework in place to assist the industry in its ambition.

Clearly, sustainable aviation fuels has been a key driver in achieving our goals. We need to see more production and widespread availability of sustainable aviation fuels. I've said on many occasions that it is absolute nonsense to believe that you need to incentivize the industry or force the industry to buy sustainable aviation fuels when we are buying every single drop of sustainable aviation fuel that we can get our hands on.

What really needs to happen now is governments need to incentivize the production of sustainable aviation fuels. We need the traditional fuel suppliers to turn their attention to sustainable fuels. It is great to see some new entrants in the market, companies like Neste, who are producing sustainable fuels at volume and have ambitions to do so going forward.

But we do need to see greater emphasis on the production of sustainable fuels. We need governments to come together to incentivize and provide the right framework to ensure that we get greater production of sustainable fuels and that will be absolutely key, given the time available to achieve net zero by 2050. Sustainable fuels really do represent the best opportunity--and a very exciting opportunity--not just for us in the airline industry, but it should be seen as an exciting opportunity for governments and countries right across the world.

Air Canada selects CHOOOSE as new carbon offset programme provider

Air Canada selected (27-Sep-2022) global climate technology company CHOOOSE as the carrier's new carbon offset programme provider. The CHOOOSE platform automatically estimates greenhouse gas emissions of a traveller's journey and allows them to purchase verified carbon offsets via Air Canada's Canadian and US booking websites. Aeroplan members may also redeem points in exchange for carbon offsets provided by CHOOOSE via the Aeroplan e-Store.

Air Canada aims to achieve net zero emissions across all global operations by 2050. [more - original PR] Original report: Air Canada Introduces CHOOOSE as New Carbon Offset Partner Option for customers to purchase carbon offsets now integrated seamlessly into the flight booking process through Air Canada's North America websites

Air Canada Introduces CHOOOSE as New Carbon Offset Partner
Air Canada today introduced CHOOOSE, a global climate technology company as the airline's new carbon offset program provider. The option to purchase verified carbon offsets is now seamlessly integrated into the airline's Canadian and US booking websites. Customers who are interested in learning more about CO2 emissions and compensating the greenhouse gas (GHG) emissions associated with their flights can now do so directly when booking through aircanada.com.

"At Air Canada, we take a multifaceted approach to addressing climate change and sustainability. Environmental and social factors are incorporated into our strategic decisions, including in fleet purchases as well as daily operations through our support of low-carbon alternatives. High quality climate offsets remain one of several important tools in reaching net-zero emissions.

People are increasingly interested in responsibly reducing the environmental footprint associated with travel. With the evolution of our carbon offset program, we are introducing greater convenience and ease for customers choosing to help mitigate air travel GHG emissions and support a range of trusted global climate projects which align with UN Sustainable Development Goals," said Michael Rousseau, President and CEO of Air Canada. "CHOOOSE is proud to support Air Canada's leadership in seamlessly integrating climate solutions within their flight booking experience.

We see an increasing demand from individuals and companies around the world wanting to understand and reduce the CO2 emissions associated with their travel, and to address the emissions that do happen by supporting both immediately available and future-looking climate solutions. We are excited to take this step with Air Canada in their multi-faceted, ambitious climate program. Together we are making climate action more accessible for people worldwide," said Andreas Slettvoll, CEO at CHOOOSE.

Air Canada's new carbon offset program is integrated into its Canadian and US websites booking process, where the CHOOOSE platform automatically estimates GHG emissions of the customer's journey and allows them to voluntarily elect to offset the GHG emissions associated with their flight. If purchased, the contribution is automatically made to CHOOOSE, who will then provide a certificate confirming the customer's climate offset purchase. Aeroplan members also have options to redeem points in exchange for carbon offsets provided by CHOOOSE via the Aeroplan e-Store.

Customers booking Air Canada flights via other channels have the option to estimate their flight's CO2 emissions and purchase carbon offsets at any time at: https://aircanada.chooose.today Additional information on how CHOOOSE supports carbon calculations is here. The selected climate projects support several major sustainability programs that deliver benefits both in Canada and internationally and that align with United Nations Sustainable Development Goals from No Poverty and Zero Hunger to Climate Action and Life Below Water.

Projects supported include forestry projects in Canada, forest management and mangrove ecosystem programs in Central and South America, and clean cooking solutions for Indigenous peoples in South Asia. Additional information about these projects offered by CHOOOSE may be found here. Air Canada has committed to net-zero emissions from all its global operations by 2050, with absolute midterm GHG net reduction targets by 2030 for both its air and ground operations compared to its 2019 baseline.

For more information about Air Canada's environmental and sustainability programs, please visit Leave Less. Curacao Hato International Airport announced (27-Sep-2022) plans to finalise a new business development strategy by mid Nov-2022. The strategy will feature goals including an increase in cargo traffic, focus on electric aviation and implementation of a marketing campaign in Brazil.

The strategy will be presented to Curacao's Ministers of Traffic, Transport and Urban Planning and Economic Development following approval by the board. [more - original PR]

Original report: CAP's new Chairman of the Board and CEO had successful visits with ministers Cooper and Cijntje

CAP's new Chairman of the Board and CEO had successful visits with ministers Cooper and Cijntje Chairman of the Board wants to contribute more to Curacao's airport & community Willemstad, September 27, 2022    Curacao Airport Partners' new Chairman of the Board, Mr.

Fabio Russo Correa, who's also the CEO of CCR Aeroportos, CAP's majority shareholder, together with new CEO, Mr. Jonny Andersen, recently visited several stakeholders, among which the Minister of Traffic, Transport and Urban Planning, Mr. Charles Cooper and Minister of Economic Development, Mr.

Ruisandro Cijntje. The visits served to introduce the new Chairman of the Board, who was visiting Curacao from Brazil. During the meetings, these CAP leaders discussed the company's plans to enter a new era of development and growth, as they prepare to provide a new direction to the business.

They indicated that the pandemic, which caused CAP to go through a very difficult period, served to provide a new perspective and determination to introduce needed changes and implement innovative ideas and initiatives for the airport to be better prepared for the future. Therefore, CAP has started a strategic process of 100 days to determine a new course for the company and give guidance to move towards its goals for the next five years. This strategy is planned to be finalized by mid-November 2022 and presented to the Board of Directors for approval.

Upon completion of this process, the Chairman of the Board intends to travel to Curacao again in order to present the new strategy, together with Mr. Andersen, to the ministers of Traffic, Transport and Urban Planning and Economic Development. To support the new strategy, the Board is planning to become much more involved with CAP and contribute increasingly more to the Curacao airport and the community of Curacao.

The intention is to go above and beyond what is required according to the DOMA license agreement to operate the airport. The Board wants to contribute for instance to make the airport more welcoming, support air traffic development including an increase in air freight (cargo), and also focus on electric aviation with an eye on sustainability and future growth. There are also plans to implement an international marketing campaign in Brazil, in order to support an island wide strengthening of tourism.

This means that the Board is seeking a more active role in the development of the airport, thereby functioning as a partner to CAP. It also signifies the start of an exciting new era for the Curacao airport, in which we look forward to leading the way towards further advancement and a bright future ahead.

Cebu Pacific operates first SAF powered commercial flight

Cebu Pacific operated (28-Sep-2022) its first commercial service powered by sustainable aviation fuel (SAF) from Singapore to Manila with an A321neo aircraft on 28-Sep-2022.The flight used 35% blended SAF produced by Neste and supplied by Shell Eastern Petroleum.Original report: Cebu Pacific operates its first SAF-powered commercial flightCebu Pacific (CEB) operated on Wednesday a Singapore to Manila passenger flight powered by sustainable aviation fuel (SAF), becoming the first Philippine carrier to incorporate SAF in its commercial operations.
The leading Philippine carrier's maiden SAF flight was operated with an Airbus A321neo, using 35% blended SAF produced by Neste and supplied by Shell Eastern Petroleum.
"SAF will help the aviation industry reduce its carbon emissions," said Alex Reyes, Chief Strategy Officer at Cebu Pacific. "We encourage more producers to increase the supply of SAF in the region. Our first passenger flight using SAF is a culmination of months of cooperation with valued partners and is an important component of our sustainability program."
The send-off event at Singapore's Changi International Airport Terminal 4 was marked with Filipino festivities to showcase Philippine culture and celebrate an important milestone in Cebu Pacific history.
"We applaud Cebu Pacific for taking the first step on their SAF journey and are honored that they have chosen to do so from Changi Airport. Changi Airport Group looks forward to supporting more airlines on their SAF journey, to power sustainable air travel together," said Mr Yeo Kia Thye, Managing Director, Airport Operations Planning and Airside at Changi Airport Group.
A day before the commercial flight, Cebu Pacific signed a long-term strategic partnership with Shell Eastern Petroleum to collaborate on making SAF more widely available, demonstrating the two parties' commitment to decarbonization and sustainability.

The Memorandum of Understanding (MOU) explores the supply and purchase of SAF in Asia-Pacific and the Middle East, with an initial supply volume of at least 25 kilotons per year.
"We are excited to work with Cebu Pacific in this five-year collaboration as we both believe that SAF is the best option available now for aviation to decarbonize by 2050. This agreement is testimony to the growing demand in the Asia Pacific region and we are ready to meet that need," noted Jan Toschka, President of Shell Aviation.
SAF is a "drop-in" replacement for fossil fuels made up of 100% renewable waste and raw materials, such as used cooking oil and animal fat waste. Using SAF results in up to 80% reduction in carbon emissions over the fuel's life cycle.

The chemical and physical characteristics of SAF are almost identical to those of conventional jet fuel, and these can be safely mixed with regular jet fuel to varying degrees. SAF does not require any adaptations to the aircraft or engines and does not have any negative impact on performance or maintenance.
CEB used SAF for the first time in May on a delivery flight of a brand new A330neo from France to the Philippines. In line with its sustainability initiatives, blended SAF will be part of the standard procedures in all future Airbus NEO deliveries.
For the maiden SAF flight, Cebu Pacific utilized its A321neo, which belongs to the A320neo Family.

It offers the widest single-aisle cabin in the sky and incorporates the latest technologies, including new-generation engines and Sharklets, delivering a 20% reduction in fuel consumption per seat, compared to previous generation A320 aircraft. As with all in-production aircraft, the A320neo family is certified to operate with a 50% SAF blend and Airbus is committed to enabling the use of up to 100% SAF by 2030.
Speaking at the event, Anand Stanley, President Airbus Asia-Pacific said:  "At Airbus we are fully committed to ensuring a sustainable future for our industry and we are pleased to partner with Cebu Pacific on this journey. Together we have a shared commitment to reach the industry goals of net zero by 2050 and the increased use of SAF will lead to a significant reduction in carbon emissions.

Aircraft manufacturers, airlines, energy providers, airports and regulators must all work together as we work towards the decarbonisation of our industry."
Cebu Pacific will take delivery of one more A33Oneo in November and one A320neo aircraft in December.

As part of the airline's sustainability efforts, it aims to transition to an all-NEO fleet by 2028 and incorporate the use of blended SAF for its entire commercial network by 2030.
The airline's sustainability goal is aligned with global aviation's goal of achieving net zero carbon emissions by 2050.