Asia-Pacific airlines are continuing their post-Covid recovery since the lifting of most travel restrictions in the region, but they won’t reach 2019 levels until “probably the later part of 2024,” according to Subhas Menon, director general of the Association of Asia Pacific Airlines (AAPA). In February, traffic measured in revenue passenger kilometers (RPK) stood at 52 percent of 2019 levels and Asia-Pacific accounted for a 25 percent share of the global RPKs, compared to 36 percent pre-pandemic.
This slow recovery “is in some way a good thing,” Menon contended, because it will provide the region’s airlines the opportunity to gradually build up their fleets and staffing to cope with the high pent-up demand without the kind of disruptions experienced during the previous summer in Europe and the U.S. Moreover, it will allow for sustainable growth as climate awareness expands across the region. AAPA’s 40 member airlines “are training their guard on sustainability,” he told AIN following meetings with European Commission officials in Brussels.
Like their counterparts in other regions, Asia-Pacific Airlines have trained their sights on sustainable aviation fuel to achieve net-zero carbon dioxide (CO2) emissions by 2050, said Menon. “Offtake of SAF [sustainable aviation fuel] is not the problem—operators want it,” he added. “The problem is insufficient supply. We need governments to provide incentives and subsidies to support the development and to kickstart the production of SAF.” The region enjoys an abundance of agricultural byproducts that refiners can use for biofuel production, and several new SAF projects have begun, he noted.
Asia-Pacific Airlines will need to reach 40 percent of global SAF use to achieve their goal of net zero by 2050.
Menon said the European Union has chosen the right direction for addressing climate change. Yet he expressed concerns that some of the "Fit for 55" rules—the package of regulations to achieve the EU’s intermediate climate target of a 55 percent emissions reduction by 2030 compared to 1990 levels—will impinge on the AAPA carriers operating into the bloc.
Taxes and SAF blending mandates “are not the best solution” to try to ramp up SAF production and consumption, he stressed.
The EU’s co-legislators are finalizing rules establishing an obligation to uplift a gradually increasing percentage of SAF for all airlines departing from EU airports, starting in 2025. That ReFuelEU Aviation proposal also includes an anti-tankering provision to prevent airlines from loading more fuel than necessary for a given flight because it is cheaper at the non-EU departure airport than at the destination airport. “This is a silly and protectionist rule,” Menon lamented, warning of the risk of SAF trade wars between continents. “Like safety, sustainability is a global issue that needs to be solved and addressed on a global basis. Certain developments in the U.S. and the EU are too unilateral and not helpful.”
Another parochial measure on the part of Brussels, according to Menon, is the EU emissions trading scheme (ETS) and the introduction of a carbon adjustment border mechanism, which regulators designed to avoid carbon leakage by levying a CO2 border tax to imports of certain goods—including hydrogen—from all non-EU countries.
“There should be one global market-based mechanism to address aviation’s CO2 emissions increases: ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). This concept of ‘bloc’ is not a good idea [to decarbonize global aviation],” he remarked. For now, the EU applies the ETS solely to flights within the European Economic Area (EAA) and departing flights to Switzerland and the UK. But in 2026 the European Commission will carry out an assessment of CORSIA and might propose to extend ETS to all flights departing from the EEA if it finds that the ICAO offsetting scheme doesn’t align sufficiently with the Paris Agreement. It also could propose to apply CO2 of EEA inbound flight to the EU's Carbon Border Adjustment Mechanism.
The linking of environmental conditions to slot usage and decisions by either airports or governments to cut back on passengers and flight movements are other developments in Europe “where our points of view are different,” Menon said.