regional perspective from the aapa martin eran-tasker technical director association of asia pacific...
TRANSCRIPT
Regional perspective from
the AAPA
Martin Eran-Tasker
Technical Director
Association of Asia Pacific Airlines
2nd APEC TPT-WG Aviation Emissions Taskforce
Singapore
15-16 September 2009
Overview• Introduction
• Current challenges
• Industry trends
• GIAC - Regulatory patchwork
• Industry efforts
• Looking Ahead
• Summary
AAPA Association of Asia Pacific Airlines
• Regional trade association
• Current members include 17 major international airlines based in Asia Pacific
• Open to all scheduled international airlines based in Asia Pacific region
• Committed to promoting sustainable growth of the aviation industry serving both passenger and freight needs
• Permanent secretariat headquartered in Kuala Lumpur, Malaysia
• Representation in Washington and Brussels
always open to new members
Global traffic share by operator region
Data: 2008 Source: IATA, AAPA and various
AAPA 18%
ATA 27%
AEA 19%
AACO 4%
ALTA 4%
AFRAA 2%
Others 19%
PR China 7%
AAPA 32%
ATA 22%
AEA 22%AACO 6%
ALTA 2%
AFRAA 1%
Others 9%
PR China 6%
PassengerRevenue Passenger Kilometres
Scheduled Systemwide
CargoFreight Tonne Kilometres
Scheduled Systemwide
Asia Pacific Aviation
Data: 2008 Source: Combined AAPA + non-AAPA airlines GMT+5 to GMT+12
US$ 151 billion revenue
600 million passengers
407 million domestic
193 million international
16 million tonnes of cargo
3,900 aircraft
Asia Pacific overall market share:
27% of global passenger traffic
40% of global cargo traffic
Current Challenges
• Sharp slowdown in the global economy
• Slump in international trade
• Weak passenger demand
• Oil and currency volatility
• Higher cost of capital
• World GDP 2009 projected to shrink by 1%
Global airline industry trends
• Net loss of USD 11 billion forecast for 2009
• Airline losses will vary by region and relative strength of individual airlines
• Weak passenger and cargo demand
• Trimmed route networks and capacity in response to lower demand
• Reduced utilization, grounded surplus aircraft, seeking deferral of new deliveries
• Tough times, conserve cash, strengthen balance sheet, preserving the ability to respond to any upturn
Economic recovery has begun but there is so far minimal airline revenue benefit due to low yields
Future growth postponed
Significant implications for investment and capacity management, throughout the value chain
Prolonged downturn may mean no growth 2008-2010
Source: IATA
Long term growth prospects still bright
Source: Boeing
Asia Pacific’s share of world traffic projected to grow
GIACC
GIACC report recommendation;
• Global aspirational goals of 2% p.a.in fuel efficiency
• No specific obligations to States
• Basket of emissions reduction measures, from which States may select.
• GIACC failed to agree on more substantive policy measures on climate change
• Chicago Convention v CBDR
• Result encourage the proliferation of uncoordinated regulatory initiatives by individual States, leading to a patchwork of overlapping and inconsistent schemes
• Next Step High Level Meeting 7-9 Oct 2009
Regulatory Patchwork
Economic Measures targeting aviation
• EU, Australia, New Zealand, USA, Japan
• Environmental Taxes
• Questionable environmental objectives - APD
Regulatory Patchwork
Proposals
• Maldives - International Air Passenger Adaptation Levy (IAPAL),levy on passengers, cost the maritime and aviation sectors USD 10 billion per year.
• UK - USD100 billion fund to assist developing countries with climate change. Funding sources, suggested by UK, maritime and aviations sectors
Regulatory Patchwork
• Multiplicity of government response
• National initiatives have international consequences with the risk of overlapping and excessive levels of charges
• No assurance that funds raised will be used to address genuine environmental objectives
• No meaningful progress will be made in addressing environmental objectives.
Absence of global solution results in conflicting regimes, double counting, additional cost and complexity
Industry efforts
• Good progress being made to manage aviation’s carbon footprint through the industry four-pillar approach
• On-going investment in technology, infrastructure and operational improvements are delivering 2% year-on-year gains in fuel efficiency
• Biofuels encouraging progress proving technical feasibility. Next challenge to reach commercial viability and scale.
• Economics of biofuels complex
• Sensitive to feedstock supply
• Oil price
• Government fiscal policies
• Carbon market conditions
Industry efforts
• Industry has recognized the benefits of proactive commitment to action, the value of establishing shared goals
• IATA AGM committed to
• 1.5% p.a. improvement in fuel efficiency to 2020
• Carbon-Neutral Growth (CNG) from 2020 onwards
• 50% reduction in net emissions by 2050, relative to 2005
• In addition
• 10% Usage of alternative fuels by 2017
Looking ahead
• Key meetings
• ICAO High Level Meeting of stakeholders 7-9 October
• COP/ 15, December 2009
• 37th Triennial ICAO General Assembly, September 2010
• To early to judge outcome of talks
• Governments have been making preliminary statements on initial negotiating positions
• Aviation will not be a major focus in the overall political negotiations, we still need to be prepared
• Key for aviation the reconciliation the Chicago Convention principles of non-discrimination versus Common But Differentiated Responsibilities (CBDR)
Negotiation Outcome
• Reaffirmation that aviation requires a global sectoral approach
• Reaffirmation that ICAO is the appropriate UN forum to address aviation emissions
• Explore amendments to the wording of Kyoto Protocol Article 2.2
• Guidance on interpretation of CBDR in a way that would be consistent with the Chicago Convention principle of non-discrimination
• Oppose imposition of arbitrary levies or taxes on aviation
Summary
• Good progress is being made to manage aviation’s carbon footprint through the industry’s four-pillar strategy.
• We need to reaffirm the role of ICAO
• Aviation requires a global sectoral approach
• The aviation sector requires globally harmonized policies. A messy patchwork of arbitrary taxes on air travel will not save the environment.
• Fresh thinking and a way forward is needed if we are to reconcile the conflicting demands the Chicago Convention and CBDR
• Even in the current economic downturn, AAPA carriers are committed to playing a full part in efforts to address environmental challenges
www.aapairlines.org
Martin Eran-Tasker
Technical Director
Association of Asia Pacific Airlines
9/F Kompleks Antarabangsa
Jalan Sultan Ismail
Kuala Lumpur 50250
MALAYSIA
Tel: +60 3 2145 5600
Fax: +60 3 2145 2500