Airline emissions climb 5.2 per cent to reach 905 million tonnes in 2018 but growth expected to slow this year
Wed 5 June 2019 – IATA’s half-year economic performance report issued during its AGM in Seoul this week shows carbon emissions from the industry worldwide rose by 5.2% in 2018 compared to the previous year to reach 905 million tonnes. This compares to an annual increase of 5.9% recorded in 2017. According to IATA’s forecast for this year, the downward trend will continue with a rise of 2.5% in 2019 as a result of growing deliveries of new aircraft and a sharp rise in fuel prices. During the AGM, IATA airlines unanimously adopted a resolution reconfirming their support for the CORSIA carbon offsetting scheme and committing to fully complying with its MRV and offsetting requirements. It also urged ICAO States to reiterate their support for CORSIA at its upcoming Assembly, encouraged all States to volunteer for its initial voluntary phases and that they confirm the scheme was to be the only market-based measure applicable to international flights.
The IATA report shows airlines used 359 billion litres of jet fuel last year compared to 341 billion litres in 2017, with the cost of fuel soaring 20.5% to $180 billion and forming 23.5% of average airline operating costs. Fuel costs are likely to rise to $206 billion in 2019 and represent 25% of average operating costs.
Fuel is such a large cost, says the report, that the industry is focusing intense efforts on improving fuel efficiency. IATA forecasts airline fuel efficiency, measured in terms of litres of fuel per 100 available tonne kilometres (ATKs) will improve by 1.7% in 2019, compared to 0.2% and 0.9% in 2017 and 2018 respectively. The trade body says this translates into expected savings of 16 million tonnes of CO2 and $3.5 billion in fuel costs during 2019. Between 2009 and 2014, the industry’s annual average per RTK fuel efficiency improvement stands at 2.4%, against its 1.5% average annual short-term target that runs until 2020.
Commercial airlines are expected to take delivery of over 1,750 new aircraft at a cost of around $80 billion in 2019, although this is dependent on the Boeing 737MAX situation. Around half of the deliveries will be to replace existing fleet, which will contribute significantly to the improved fuel efficiency expected this year, says the report. IATA says the sustained high fuel costs has made it economic to retire older aircraft at a higher rate. Passenger load factors are also expected to rise slightly to 82.1% in 2019, compared to 81.9% last year, and aircraft are being flown more intensively. Around 39.4 million scheduled flights are forecast for 2019.
As a result of rising fuel costs and what it sees as weakening world trade, IATA has downgraded its December 2018 forecast of a global industry profit of $35.5 billion in 2019 to $28 billion.
“Airlines will still turn a profit this year, but there is no easy money to be made,” commented IATA’s Director General, Alexandre de Juniac, at the AGM, pointing out it will be the tenth consecutive year of overall profitability for the industry. “The good news is that airlines have broken the boom-and-bust cycle.”
He told delegates that aviation was the business of freedom. “For 4.6 billion travellers, it is their freedom to explore, build business or reunite with friends and family. The economic benefit is 65 million jobs and a $2.7 trillion boost to the global economy,” he said. “Aviation is growing responsibly to meet this demand. We are determined to deliver sustainable global connectivity through aviation.”
De Juniac said airlines were aware that effective plans to cut emissions were critical in earning their licence to meet growing demands for air connectivity. “In fact, the strongest demand growth is in the developing world, reflective of aviation’s contribution to 15 of 17 of the UN’s Sustainable Development Goals,” he continued. “CORSIA sets the stage by capping emissions at 2020 levels. Between 2020 and 2035, it will mitigate over 2.5 billion tonnes of CO2 and generate at least $40 billion in finance for carbon reduction initiatives.”
As well as encouraging all ICAO States to consider joining CORSIA’s pilot and first voluntary phases, the AGM resolution adopted by airlines calls for countries and regions – such the European Union – to recognise the scheme as the single global market-based mechanism for climate change mitigation and not to implement overlapping or duplicate measures like carbon taxes. Again with a finger pointed at the EU, the resolution urges ICAO States to ensure their domestic monitoring, reporting and verification (MRV) regulations were fully aligned with ICAO’s agreed CORSIA standards, “with the aim of preventing market distortions and multiplicity of MRV requirements.”
The resolution also urged IATA’s own airline members to implement all available fuel efficiency measures, including investing in fleet replacement and other operational measures, as well as take part in the energy transition towards the use of sustainable aviation fuels.
Speaking on the sidelines of the AGM, IATA’s Director of Aviation Environment, Michael Gill, said a lot of work was being undertaken by the aviation industry on reducing CO2 emissions in terms of new technology solutions. These included potential electrification solutions coming online in the 2035 timeframe and the growth of sustainable aviation fuels. “We are seeing a significant uptake in the use of these fuels and that’s a very positive development.”
Responding to a growing public awareness of climate change, Gill said: “I think it’s very healthy that everyone in society is asking themselves how they are impacting on climate change, and aviation is no different. We have a strategy to reduce our CO2 emissions by 50% by 2050 and we want to call on industry to go for even more ambition in the coming years. It’s an area we are looking into and we have a plan in place that should reassure the flying public that aviation is a very responsible industry as far as climate impact is concerned.”
Qantas CEO Alan Joyce told delegates at a session on sustainability that the airline was passionate about the issue. “It’s very important for the future of our industry that we get this right,” he said. “We at Qantas have given ourselves very significant targets to reduce our impact on the environment and not just with regard to CO2.”
Joyce highlighted the airline’s recent zero waste domestic flight (see article) and that it had the largest carbon offset programme of any airline in the world, with 10% of customers opting to offset their emissions. He wanted to see the percentage climb and Qantas had introduced a number of initiatives, including giving bonus frequent flyer points for those choosing to offset. He related he had physically offset the emissions of his own trip to Seoul by helping plant 90 trees in a rainforest project in northern Australia the previous week.
He said the ultimate offset of not flying at all was a ‘cop out’ and a case of ‘throwing out the baby with the bathwater’. “You just need to fix the bathwater by ensuring we do what is needed to meet our Paris commitments, maybe even being bolder than that and aiming for the 1.5 degree target,” he said. “We know it’s doable with our programmes in place that can get us there and we should be better in communicating it. The reason why some people don’t think they should fly is because our communication in some cases has been terrible. Airlines and IATA have to be more proactive in getting our message across. We know from the positive coverage we got in Australia to our zero waste flight you can have an impact if you focus on it and get your message right.”
Next year’s AGM will be held in Amsterdam and hosted by KLM.