IATA used its annual general meeting to debate the industry's effects on the environment and to unveil its strategy to try and reduce this impact
Giovanni Bisignani sees the industry's enormous challenges like mountains. From the Rocky Mountains to the Alps and the Himalayas, his metaphor compares these peaks to issues faced in the fields of safety, security, infrastructure costs and liberalisation.
However, there is a greater challenge ahead - the environment, Bisignani told IATA's annual general meeting in Vancouver in early June. "Like the famous mountain K-2, it is potentially the toughest climb."
Much of the talk at IATA's meeting demonstrated the frustration among airline chiefs about constantly being labelled as a dirty industry, when in reality its efforts to improve efficiency have been pretty good. For instance, the introduction of new fuel efficient aircraft will make airlines 25% more fuel-efficient by 2020 with a corresponding fall in emissions. "We have been silent in our success and now we have a reputation crisis," Bisignani says. "That makes us an easy target for politicians who think green and see cash."
"We have lost the PR battle," says Leo van Wijk, chief executive of KLM. According to Chew Choon Seng, the chief executive of Singapore Airlines, airlines have "collectively underestimated the popular resonance" of the green issue. "But we can't just talk our way out of it," he adds.
Van Wijk - who reminded the meeting of his warning at its gathering as long ago as Rio de Janeiro in 1999 of the dangers of ignoring the green issue - agrees. "People don't want to hear about how well we've doneit won't work just trying to get away with more PR," he says. "First we have to get a credible position and we have to be perceived as an active and willing participant even when we don't know all the facts."
Speaking from the floor, Northwest Airlines chief executive Doug Steenland said that, "while the facts say otherwise, it is clear that the perception is there that we airlines are a major contributor to greenhouse gases". There is much debate about the size impact of aviation on climate change. But those who argue whether aviation contributes 2% or 3% to global emissions may be missing the point. The issue is that as traffic grows so too will emissions. "All the models say there will be a growing impact, this is fairly unequivocal," says Ian Waitz, professor of aeronautics and astronautics at the Massachusetts Institute of Technology.
IATA's green vision
It is against this background that IATA has come out with its most ambitious green vision to date. "A growing carbon footprint is no longer politically acceptable - for any industry," says Bisignani. "Climate change will limit our future unless we change our approach from technical to strategic. Air transport must aim to become an industry that does not pollute - zero emissions."
Bisignani's first public pronouncement of this ultimate green target is, he conceded, aiming high. But it is an aspirational goal. "We can see potential building blocks for a carbon-free future," he says. "Fuel cell technology is here. The first solar powered aircraft is built and we can make fuel from biomass today."
However, few have any illusions about the realities of getting to zero emissions. Steenland summed up the views of many: "Absent new technology, there is a limit to how much we can reduce emissions and continue to serve our customers."
Bisignani used the 2007 annual meeting to boil all the strands of the association's main environmental messages over the past couple of years down to four key challenges:
1. Air traffic management Here the challenge is to eliminate the 12% inefficiency in ATM and cut this in half to 35 million tonnes of CO2 annually. According to Bisignani, three mega-projects could deliver quick results: an efficient Pearl River Delta in China a next generation air traffic system for the USA and Europe to commit to a Single European Sky.
2. ICAO The challenge to the United Nations aviation body is to deliver a global emissions trading scheme that is "fair, voluntary and effective", he says. "The relevance of ICAO depends on its ability to deliver."
3. Technology "Build a zero emissions aircraft in the next 50 years," says Bisignani. He is calling on the leading aerospace manufacturing countries to co-ordinate their research effort and apply it effectively. "It's time for governments and the oil industry to make some serious investments so that in 10 years 10% of our fuel is from alternative sources."
4. The airline industry "The final challenge is for airlines to implement green strategies across the business. IATA is developing Project Green to help airlines implement global best practice Environmental Management Systems. This will place environment alongside safety and security as a core promise to our two billion passengers."
Bisignani's strong wake-up call on the environment is not a comfortable message for many in the industry. It is also a message that wins a quite varied reception across the globe. As US FAA administrator Marion Blakey says: "There is still a significant difference in public perception in Europe and the USA. But I view the environment as an alligator in a very murky pool - it's gonna come up and bite us big time." She agrees with Bisignani that the industry must "be very aggressive about things we can do right now and to measure that difference, especially on the operational front".
In Europe, convincing states to effectively unite the continent's 35 ATM providers into one via Single European Skies within five years is critical to deliver environmental benefits. It would result in huge efficiency gains with delay reductions and more effective routings. Bisignani slams what he called a "European circus", with 15 years of talks on SES and nothing to show for it. "It's time for some real results," he says.
IATA has been banging the drum on the relationship between ATM improvements and lowering aviation's green impact since 2005. It has also consistently argued for a global solution, through ICAO, on emissions trading. But the industry is far from assured that emissions trading will be effective. SIA's Chew describes it as the "least-worst option", while British Airways chief executive Willie Walsh calls it "the most effective way to address this issue".
Can emissions trading work?
Blakey says it is important to assess whether emissions trading will "honestly" improve aviation's impact on the environment. "We need to see if it moves the needle," she says, or whether it will simply become a new charge or a new tax. KLM's van Wijk has doubts too, but believes the industry must accept that emissions trading is on the way. "There is a need to participate and hopefully jointly design a better system and avoid the pitfalls," he says.
Walsh says he was surprised at how quickly the environment had become the top issue. Six months ago at an IATA meeting it was not, he says, but "now every single chief executive in the room is talking about the environment".
One thing appears sure going forward: the environment will be at the top of the agenda for many years to come. The industry's big climb is only at base camp.
Europe sounds carbon trading warning
European carriers have warned that proposals to include aviation in the European Union's Emission Trading Scheme are "costly and unworkable". Although the region's major carrier bodies, representing network, low-cost, regional and leisure airlines, support emissions trading in principle, in their present form they believe the proposals "will jeopardise the long-term viability of the European aviation industry".
Their warning follows an independent impact assessment, conducted by Ernst & Young and UK-based consultancy York Aviation. In its present form the costs of purchasing ETS allowances for airlines will be substantial, with an "optimistic" estimate of over €45 billion ($60 billion) from 2011 to 2022 (€4 billion additional costs per year), say the carriers.
Read more on the European airline reaction to emissions trading and easyJet's proposed ecoJet
Read all the news from the IATA Annual Meeting in the Airline Business Daily
Is Europe's Single Skies air traffic control project making headway?
Asian airlines are urged to be more proactive on the green front