By Carlos Vianna, Head of Business Development, SITA.
The current turbulent economic environment is undoubtedly adding new challenges for aviation, an industry still reeling from the devastating impacts of COVID-19. Operating on thin margins and with an ambitious goal of net zero carbon by 2050, can the industry ensure its long-term success and growth after the pandemic?
We believe that growth and an environmentally sustainable industry are not mutually exclusive, but to achieve both, we must start now.
The recovery of aviation and the benefits for the world economy
SITA data shows that the industry recovery in 2022 is underway: in 2021, global air traffic was at 64% of pre-COVID levels, but still 18% higher than 2020 figures. The signs are encouraging for 2022 and beyond. But what is also clear is that airlines face another year of adverse economic shocks, putting increasing pressure on their costs and activities. In 2021, the impact of the pandemic resulted in losses of more than US$51.8 billion for airlines, although significantly less than in 2020 when the pandemic first affected the world.
In particular, we have seen a significant increase in fuel prices, one of the biggest costs for airlines. The average price of jet fuel in April 2022 is 118.5% higher year over year, an additional $108.4 billion burden on our industry.
Given aviation’s contribution to the global economy, contributing some $3.5 trillion to the planet’s global domestic product (GDP), the industry still needs to plan for its recovery and growth without negatively impacting the environment.
Sustainability is neither new nor prohibitive for aviation
Industry’s 2050 net-zero carbon commitment (made in 2021) is challenging but unavoidable to address climate change at the pace and scale required by climate science and to offset any growth in industry emissions in the future.
For many years, aviation has addressed its environmental impacts, including air quality, noise, and emissions.
Technology is enabling sustainability and recovery
We see an industry now looking to use technology to build back better and greener after the pandemic. SITA’s latest Air Transport IT Insights study reveals that the industry is planning for its future by investing in technology to support its recovery and sustainability efforts. Some of the investment drivers will respond to rapid changes in passenger traffic and travel regulations, the anticipated increase in travel demand, increased operational efficiencies to save costs, and reduced carbon footprint.
Airport and airline IT spending priorities are focused on improving the passenger experience, with more digitally enabled travel and more sustainable operations with energy efficiency, smarter infrastructure and solutions such as data-driven flight route optimization to improve route efficiency and reduce fuel and carbon consumption.
To simultaneously drive post-pandemic economic recovery and sustainability, many governments are providing green economic stimulus programs, such as private sector investments to develop a new green technology market.
The growth opportunities for airports and airlines today
Rising fuel prices are likely to be a catalyst to drive a faster move towards more sustainable fuel sources. Although sustainable aviation fuel (SAF) and new energy-efficient aircraft and engines are two main ways for the industry to reduce carbon emissions and its reliance on fossil fuels, they are not widely achievable today due to problems such as availability and affordability.
Operational improvements are a primary measure to enable the industry to directly and more immediately reduce its emissions by up to 10%, efficiencies that can be achieved through current technology.
For example, airports can process their passengers quickly, including enabling remote pre-arrival check-in, by implementing passenger self-service and processing technology. This allows airports to maximize their existing investment without having to invest to expand their physical footprint.
Using technology to harness data for greater situational awareness and more informed decision-making is key to achieving efficiencies and emission reductions. For example, SITA is piloting a new emissions management capability, leveraging our Airport Management Solution, to enable Palermo Airport in Italy, for example, to better measure and optimize emissions in and around the airport.
We are also helping airlines improve situational awareness and reduce fuel consumption, emissions and costs, while building climate resilience by integrating our eWAS Pilot and OptiFlight applications.
The results are immediate and concrete. It is possible to save up to 5% on fuel on each flight, without affecting the safety or comfort of passengers.
The financial pressure on the industry can be the catalyst for lasting changes for a more environmentally conscious industry, without losing the economic benefits of a strong airline sector.