13
Sep

Aviation’s existential threat is not COVID – it’s the environment

Environmental sustainability is looming as a key threat to the viability of the airline industry – and the travel sector at large that depends on it. This month’s CAPA Live event investigated the topic of environmental sustainability and aviation. A vital step to achieving emission reduction goals is accurate and effective measurement of individual airline emissions. Accurate and effective measurement of emissions is key to real reductions.

During a session at the event CAPA – Centre for Aviation and its sustainability analysis partner, Envest, revealed some early findings on the significance of sustainability for the airline industry, ahead of the publishing of a landmark report on the topic, due in Oct-2021. The research presented data on 25 of the world’s leading airlines, which together represent about 55% of total industry emissions. In terms of CO2 emissions per ASK and RPK, there were very significant differences presented between best in class and worst.

The session also reviewed the outcomes of a high-level carbon stress test conducted on each airline, including the theoretical break-even carbon price, which is calculated for each airline as annual Operating Profit / Total Carbon Emissions (T). The test provides a high-level estimate of the price of carbon that would consume all of the 2019 Operating Profit for each airline if carbon emissions were included as a cost in financial reporting.

The analysis showed that five of the leading 25 airlines have a break-even carbon price of <USD30/T, which is well within the broad view of the current full cost of carbon. The remainder are potentially very vulnerable airlines, as the demand or requirement to fully price in carbon grows.

READ THE FULL STORY via CAPA Live coverage on CTC – Corporate Travel CommunityAviation’s existential threat is not COVID – it’s the environment