The aviation sector needs regulations to be put in place to speed up sustainability efforts from industry players and to encourage green investments in a bid to reach the goal of net zero by 2050.
Speaking at TIACA’s Air Cargo Forum in Miami, executives from the aviation industry stressed the importance of sustainability in their operations and plans as they laid their ongoing efforts to reduce their companies’ carbon footprints.
Despite these individual efforts, however, some executives cited the need for further regulations to rally sustainability initiatives and investments in the sector as they maintained that the aviation sector has a long way to go to achieve its sustainability goals.
Adrien Thominet, chief executive at Paris-based general sales and service agent ECS Group, noted that, currently, green initiatives in the aviation sector are based on “goodwill.”
“I think this industry’s [sustainability efforts] for the time being is only based on goodwill, so all the efforts that everyone is doing are goodwill,” he told the CEO Roundtable on “The Sustainability Challenges Being Faced By The Air Cargo Industry.”
“I’m mainly thinking there will be a need to impose some rules or regulations.”
Thominet noted that some of these rules could be on the minimum load factor to put an aircraft in the air or the same loaf factor in terms of cargo, as well “or having a minimum percentage of your EBIT reinvested into sustainability.”
“I believe there is goodwill, and that’s good, but there is a need for regulation,” Thominet added, alluding to the likes of regulations for the automobile industry. “This industry needs regulations anyway to be forced to do [it].”
Turhan Özen, chief cargo officer at Turkish Airlines, pointed out that currently, there are still many air cargo players operating older or converted aircraft.
“Turkish Airlines has one of the youngest fleets, both passenger and freighter, in Europe, so we keep the momentum on the renewal of old freighters and passenger aircraft for much better and efficient ones to minimize carbon footprint and greenhouse gas effects,” he told the CEO Roundtable.
“But, looking at the whole industry, it’s not the case. There’s actually a lot of operators that are maybe urged to use much older and converted fleets, but the market will evolve, so the older aircraft will not be efficient enough to be operated competitively,” Özen added.
Martin Drew, senior vice president of global sales and cargo at Etihad Airways, said sustainability has also started affecting buying behaviour – and those that have green initiatives are reaping the benefits of having programs in place.
“For us at Etihad, sustainability has been a very important agenda for us for some time, and it will continue to be. As an industry, we have a responsibility to [reduce] our footprint,” Drew told the CEO panel, adding that the aviation industry is responsible for about 3% of the total emissions globally.
At the current growth rate, he noted that by 2050 that will be “around 22%.”
“We need to act now in terms of decarbonizing the industry,” Drew said, as he noted the targets of Etihad to reduce its emissions by 20% by 2025, 50% by 2035, and then net zero by 2050. “We know that this is starting to impact people’s buying behaviour. It’s an additional cost, but with a lot of what we’re doing from the sustainability perspective, it can also give you a bit of a commercial edge. In a lot of the initiatives we’ve done, we’ve seen a massive gain in market share – certainly on the passenger side. If you get it right, it’ll give you a commercial edge.”
Deborah Flint, chief executive at the Greater Toronto Airports Authority, noted that there’s “very challenging tension” on achieving sustainability goals on one side and the cost of decarbonization on the other.
“As we know, technology and the cost of achieving those objectives are going to decrease over time, but there has to be a first mover, and there had to be investors that will allow those solutions to get to scale,” she told the CEO Roundtable.
“I think the conundrum is more so about the timing, the pace of investments, so I believe the ecosystem together has to work concertedly to achieve those,” she added.
David Barker, chief executive of airport operations at dnata, noted that innovation from a sustainable perspective could help turn costs into investments.
“When we talk sustainability, everything is an additional cost, but if you look at innovation route, the cost you put in today is actually cost-efficient, and for us, we look at it as a USP (unique selling proposition),” Barker told the CEO Roundtable.
John Carver, chief executive at Burrell Aviation, which develops, operates and invests in next-generation supply chain infrastructure, said that from the infrastructure perspective, “sustainability has become rather expected.”
“Looking at the sustainability cycle six or seven years ago, in the beginning, it was more aspirational goals of airports. They didn’t have clear plans on how they wanted it achieved. Then it became more prescriptive, then minimal requirements, and then on to it just being expected,” Carver told the CEO Roundtable.
Carver noted that the road to sustainability also comes with new infrastructure – as he pointed out that the average age of cargo facilities at major U.S. airports, for example, is 40 years old.
“These buildings were built long before the word sustainability came about in the vocabulary,” he said. “So, on the private sector side, sustainability requires new facilities. It’s very hard to have 40-year-old buildings certified.”
Flint noted that aside from investment in new infrastructure, the industry could also look at managing existing assets to make them more efficient. “We have the opportunity in the sector to get more out of the existing asset using the sustainability lens and then develop new infrastructure for operation more efficiently and smartly,” she told the CEO panel.
Barker said achieving the industry’s sustainability goals will need a “multi-faceted approach,” as he listed real targets that industry players could work on right away, including a switch to solar panels and the use of e-vehicles.
“The journey we’re on, if we’re really honest with ourselves, that target of zero emission by 2050 is aspirational. How do we get there – I think it has to be all these small steps; it has to start with every man in the mirror,” Barker said.
The dnata executive also reiterated that the sustainability cost should be considered an investment.
Moving forward, executives maintained that more work needs to be done to push the industry further in its sustainability goals.
“I think actually sustainability is here to stay. Future generations of employees are looking at sustainability in terms of financing. If you don’t have a sustainability program, your financing programme changes,” Barker said.
Özen said the United Nations Sustainability Goals have been embedded in the carrier’s strategy and plans. “This sustainability program was initiated before the pandemic and really took some weight, but still, we can see that we are just at the beginning of a long route,” he said.
“All these initiatives are ongoing, but still, I believe in three or four years’ time, as an industry, we will be much more comfortable and confident. However, we still have a very long way to go.”
Flint pointed out that the sustainability journey is not going to be easy, “but it’s a good place where the industry is starting.”
“We’ve seen in the last couple of years, the airports on a global scale commit to net zero by 2050 – and that’s no easy feat,” she said. “The aspiration before us is big, but I believe it is attainable.”
Drew echoed the same comment while urging greater industry collaboration. “We’ve come a long way, but we’ve still got a long way to go. Unless we collaborate more, we stand no chance in achieving sustainability goals, so that’s a key,” he added.
Glyn Hughes, TIACA’s director-general, noted while moderating the panel that, based on the results of its recent annual survey on sustainability, efforts aimed at decarbonizing the industry were sustained during the pandemic years.
“One of the striking features that we have in the last sustainability report was the fact that during Covid, the notion of sustainability didn’t really drop from the thoughts and minds and actions of some of the respondents – and in fact, it even increased,” Hughes said.
“That certainly led us to feel that this is a topic that’s not just a topic that’s top of mind for a period of time, but it’s going to be an ever-present notion.”
By Charlee C. Delavin
Asia Cargo News | Miami
