IATA chief highlights airlines' clear commitment to SAF
April 20, 2023
Airline commitment to using sustainable aviation fuel in future represents a significant step in the sector's efforts to become carbon neutral by 2050, in the view of IATA director general Willie Walsh. During a panel discussion at the Sustainable Skies World Summit at Farnborough in the UK on 17 April, Walsh recalled a previous IATA target in 2009 to halve commercial aviation carbon-dioxide emissions by 2050, noting that the airline body had not provided a plan as to how the savings would be achieved. It was a "commitment in the dark", he says, adding that IATA subsequently decided to establish an emission-reduction roadmap when it reviewed its sustainability strategy and adopted the net-zero target by 2050, along with other sectors. Walsh emphasises that IATA's plan, which includes a target to source 10% of airlines' fuel consumption from SAF by 2030, represents one rather than "the" sustainability roadmap, indicating that initiatives will evolve as the sector moves toward net zero. But he highlights the importance SAF plays in the roadmap and commitment by airlines to using it despite its higher price versus fossil-based kerosene. "We wanted to send a sign that anybody who is concerned about demand for SAF should now relax, because we were clearly saying [that] the industry is now giving you the loudest demand signal that anybody has [given] that we see sustainable aviation as the single most important contribution to net zero." IATA estimates that 65% of aviation's CO2 emission reduction by 2050 will be achieved through SAF. But Walsh adds that it is "disappointing that we have not seen greater commitment to production. We have seen very strong commitment to demand. But that has not been matched, in the main, by an equal commitment to production." The IATA executive believes this is partly a result of a lack of visibility about policies governing SAF production and support for its development. He cites the US government's 2022 Inflation Reduction Act and clean-energy tax credits included in that bill as significant steps to spur SAF production and employment. IAG chief executive Luis Gallego, who also participated in the panel, called for more investment in SAF production and policies to encourage establishment of new facilities. He references commitments made in the UK to have five SAF plants under construction by 2025, but says the country will require 14 facilities to meet the target of using 10% SAF by 2030. There is a "big gap to close", he adds. Jimmy Samartzis, chief executive of US-based sustainable fuel technology company LanzaJet – another panellist – also suggests that while steps have been made toward wider SAF use, meeting the 10% target remains a "tall order". He highlights regulatory differences between the USA and the EU and UK which, in his view, limit SAF development. While first-grade ethanol can be used to power aircraft in the USA, its use is restricted for aviation in the EU and UK, he observes. Samartzis counts ethanol as one of three viable ways of producing SAF today – the other two being hydro-processed esters and fatty acids and solid municipal waste converted via Fischer-Tropsch processing. He argues governments should not "prematurely decide" which SAFs can be used for commercial aviation and which can't, and instead let the market determine the most viable solutions. "Looking for perfection" in SAF production and deployment, he suggests, could hold-up progress in reducing aviation emissions. "Let's get there as fast we can," he says. "There is technology available today that we should be focussing on deploying as quicky as we can rather than focussing on technology that should be available in 15 years' time." However, Samartzis does see a role for government to provide funding for SAF developers that may not be able to access significant funding from private capital market. Governments can serve as an "extremely valuable" source of financing, he says.
Austrian Airlines to add 10 787-9s
April 20, 2023
Austrian Airlines will modernise its entire long-haul fleet by replacing its Boeing 777 and 767 aircraft with 787-9s by 2028.
"The first Dreamliner will be landing at the beginning of 2024 in Vienna and will expand the flag carrier's fleet to 66 aircraft in the next year's summer schedule," the carrier says. This will grow the airline's long-haul fleet from nine to 10 aircraft at the beginning of 2024, with the remainder of the 787s arriving in the following years as the 777s and 767s are retired. "With the 'Dreamliner' Austrian Airlines is taking off to a new era of aircraft and is setting course for growth. The fleet induction of ten Boeing 787-9 in the coming five years shows that we are fit for investments and the future”, says Austrian Airlines chief executive Annette Mann. The aircraft will be transferred gradually from Lufthansa or come from existing orders from the Lufthansa Group. According to the airline, the 787-9s will significantly contribute in reducing CO2 emissions.
Regulator opposes Qantas takeover bid for Alliance
April 20, 2023
Qantas is seeking more information from the Australian Competition Consumer Commission (ACCC) after it announced it would oppose the Oneworld carrier's planned takeover of charter operator Alliance Aviation Services. Alliance predominantly serves the fly-in, fly-out charter market in Queensland and Western Australia, and following an investigation that began in May 2022, the ACCC found that the takeover would reduce competition in that market. “We consider Alliance to be an important competitor to Qantas, and the removal of Alliance is likely to substantially lessen competition, threatening increased prices and reduced service quality for customers,” ACCC chair Gina Cass-Gottlieb says. “Qantas and Alliance currently strongly compete with each other in markets where there are few effective alternatives. The proposed acquisition would combine two of the largest suppliers of charter services in Western Australia and Queensland.” As well as charter services, Alliance wet-leases 18 Embraer 190s to Qantas that are flown on regional routes. In response to the ACCC announcement, Qantas states that it is seeking more information on the decision and a meeting with the commission to understand the decision, "which is at odds with the increasingly competitive nature of the segment and views expressed by a competitor that the acquisition would not lessen competition". In September 2022, Qantas competitor Rex Airlines surprisingly backed the proposed takeover of Alliance, provided it continued to make spares and simulator time available to other operators. Rex acquired charter specialist National Jet Express in the same month after receiving ACCC approval, which Qantas cited as one of the changing dynamics in the resource charter industry since it launched its takeover bid for Alliance in May 2022. Qantas already holds a 19.9% stake in Alliance that was acquired in February 2019. That transaction was subject to a three-year investigation by the ACCC, but ultimately, the regulator did not oppose the transaction as it was not deemed to lessen competition. " As the ACCC has previously acknowledged, customers in the resources segment are sophisticated and well-resourced with procurement expertise and strong bargaining power in their negotiations with airlines and other operators," Qantas states. "The proposed acquisition of Alliance would enable Qantas to service this important sector better, particularly through the efficiencies unlocked through a combined fleet of similar aircraft." The ACCC has not made a final determination, thereby leaving the door open for Qantas to argue the competitive benefits of the takeover. Failing that, it could launch a challenge to the National Competition Tribunal.