Fresh thinking

An exclusive report on the latest fuel efficiency practices and their progress in the Middle East.
Fresh thinking
By Alex Hawkes
Sat 19 Apr 2008 04:00 AM

With so many question marks still raised as to what precise extent the airfreight industry is responsible for carbon emissions, Air Cargo Middle East & Indiacompiles an exclusive report on the latest fuel efficiency practices and their progress in the Middle East.

As the defining voice of the global aviation and airfreight industry, the International Air Transport Association (IATA) has devised a number of strategies and initiatives to combat short and long term carbon emissions produced by the sector.

"I think its important to put the topic of environmental responsibility into perspective. The aviation industry contributes to only 2% of global emissions, but we recognise that this carbon footprint will probably grow as the industry continues to expand, which is a situation unacceptable in the long term," says Paul Steele, director of aviation environment, IATA.

There is already a huge amount of activity going on across the spectrum of the industry, not just with airlines, but with equipment manufacturers, air traffic controllers, ground handling operators and others.

As a result, last September at IATA's general assembly, a four pillar strategy aimed at combating both short and long term industry emissions was set in place.

Each strategy - details of which are outlined at the end of this article - creates a clearer vision for the future of the industry, condensing what is considered a vastly broad subject into just four manageable subject areas.

Specific targets are set in place, namely a short term target of reducing aviation fuel wasted on inefficient infrastructure by 18%.

Perhaps more ambitiously, IATA has set a challenge to the whole aviation sector to build and operate a commercial airliner that produces no net carbon emission within the next 50 years.

Supporting the strategies is a range of initiatives aimed both at the broader aviation industry and the more specific air cargo sector.

"Last year we ran fuel efficiency programmes with a number of airlines in the Middle East and delivered savings of one and a half million tonnes of CO2. Our green teams work with airlines in identifying any inefficiencies within their operations, which includes the cargo side of the operations.

Since the campaign was launched in 2005, 12 airlines in the Middle East have been involved in the scheme, eight of which took part in 2007," identifies Steele.

The Middle East industry has a slight advantage in its quest for optimal efficiency stemming from the fact it has the youngest average fleet in the world, second only to Asia.

There has been a significant improvement in fuel efficiencies in aircrafts over the last few years and therefore the newer the fleet, the less carbon its omits.

There are airlines in the Middle East, which have significant upgrade programmes including prospective future aircraft replacements in the mould of the Airbus A380 and Boeing 787. These will lead to further improvements in the short to mid terms," Steele says.

IATA, quick to point out that all its strategies are dovetailed within the air cargo sector, also conducts complimentary research and initiatives more acutely focused on the impact of airfreight.

If 2% of the world emissions are from aviation then approximately a third of that is contributed by cargo," says Aleks Popovitch, global head of cargo, IATA.

While cargo is an airport to airport component, we are also doing work where we are looking at the origin of the cargo and trying to work out its overall carbon footprint to delivery at its final destination.

Such research confronts the many complexities and peculiarities of the broader supply chain and thus IATA admits further work is required in attempting to define the overall impact of airfreight. A large variety of studies are currently underway within different parts of the industry.

While the period an aircraft spends in the air allows for a relatively straightforward analysis, the impact of ground handling operations and overall airport operations distorts the picture, each of which is dictated by the peculiarities of a location. Furthermore, the different forms of cargo transported affect measurements.

"We are working with the supply chain sector to discover how much emissions are generated from the kind of freight itself. Generally speaking freight varies from general to heavy duty to specialised, for example perishables and pharmaceuticals.

It is very important for us to be able to measure the full carbon footprint of each from the beginning to the end of its journey," explains Popovitch.

Meanwhile, two IATA projects currently address the fuel issue within the cargo sector headfirst. The much publicised e-freight initiative was a popular topic in the news throughout 2007 as huge strides were taken in introducing paperless cargo throughout the industry.

Paper documents contribute heavily to the overall weight carried on aircraft and the complete removal of such items from the supply chain will undoubtedly enhance overall levels of fuel efficiencies.

Secondly, IATA introduced an industry recommendation nine months ago for the adoption of robust light weight containers. Applicable to cargo and passenger luggage, the containers have reportedly led to significant savings for the carriers that have implemented them.

Another thing we identified was the large degree of wasted containers within the industry, so IATA has also implemented an improved planning tool, which is able to forecast how many containers are needed during operations," says Popovitch.

By adopting more efficient procedures, an airfreight operator reduces both its cost base and its impact on the environment. With a clear incentive now in place combined with a range of short term and long plans and policies to support change, IATA feels the most important years are still ahead.

"I think the next two to three years will be pivotal for the whole industry not just not airfreight. We have already done a huge amount and recognise we should be doing more," summarises Steele. "Jet aviation fuel have risen over 50% in the last three years and everyone needs to keep that fuel cost down, which means be more fuel efficient and ultimately more environmentally friendly.

IATA's four pillar strategy

1. Technology

Technology is an important driver of progress. Accelerated development of alternative fuels and more advanced technology for airframe, engine and air traffic management is absolutely essential. IATA, manufacturers and fuel suppliers are jointly working on an action plan focusing on short, medium and long term measures.

In the short term, the potential exists to realise emissions reduction by identifying and applying product enhancements and modifications for the current fleet.

For the medium term, possibilities must be explored to accelerate fleet renewal and to introduce the latest technologies as early and widely as possible.
Development of cleaner, alternative aviation fuels must also take priority. For the longer term, joint initiatives should be launched to identify and develop radically new technologies and aircraft designs.

Action

• International Civil Aviation Organiation (ICAO) and industry should develop medium and long-term technology goals for engine fuel burn and CO2 emissions, accompanied by appropriate fuel performance indicators and metrics.

• ICAO should develop global specifications for cleaner, alternative fuels. Research and development investments in these fuels must
be increased and coordinated.

• ICAO should promote a predictable investment horizon and a stable regulatory environment to foster research and development efforts.

• ICAO should support a technology roadmap with clear long-term goals to be jointly developed by manufacturers, suppliers, airlines and regulators worldwide.

2. Operations

More efficient aircraft operations can save fuel and CO2 emissions by up to 6%, according to the Intergovernmental Panel on Climate Change (IPCC) in its 1999 special report on aviation.

IATA is compiling industry best practices, publishing guidance material, conducting airline visits and establishing training programmes to improve existing fuel conservation measures. In 2007, IATA updated its fuel efficiency goal.

It expects airlines to reduce their fuel consumption per revenue tonne kilometre (RTK) by at least 25% by 2020, compared to 2005 levels.

This will save around 345 million tonnes of CO2 emissions during that period. Achievement of the IATA fuel efficiency goal will be predominantly driven by very significant investments in the continuous renewal of airline fleets. Increasing load factors also play an important part.

The IATA goal does not, however, take account of additional operational and infrastructure improvements, which could yield significant extra benefits.

Action

• IATA aims to raise environmental standards

by extending existing fuel conservation programmes and promoting environmental management systems across all airlines.

• ICAO should update international fuel management regulations (including ICAO Annex 6), for further fuel efficiency gains.

3. Infrastructure

Infrastructure improvements present a major opportunity for fuel and CO2 reductions in the near term. By addressing airspace and airport inefficiencies, governments and infrastructure providers can eliminate up to 12% of CO2 emissions from aviation, according to the IPCC.

Implementation of the Single European Sky and the US NextGen Air Transport System is a top priority for the progressive harmonisation of global airspace management. Flexible airspace access must also become a reality, especially in Asia where traffic growth is particularly strong.

Action

• Governments must adopt policies and remove obstacles to allow airspace and airport inefficiencies to be cut in half over the next five years, thereby saving 35 million tonnes of CO2 emissions per year.

• States and ICAO should implement ICAO's Global Air Navigation Plan at the regional level and prioritise the development of regional action plans to eliminate inefficiencies.

4. Economic Measures

Economic measures should be used to boost the research, development and deployment of new technologies rather than as a tool to suppress demand. The use of tax credits and direct funding must be explored as incentives to drive new technology programmes.

Punitive taxes do not improve environmental performance. Emissions trading could be a more cost-effective solution as part of a global package of measures including technology, operations and infrastructure improvements.

But the trading system must be properly designed and implemented on a global and voluntary basis. It must also be an open trading system, allowing permit trading with other industries.

Action

• ICAO and IATA should work with international financial institutions to explore new funding mechanisms to provide clean technologies to
the developing world.

• IATA supports the development of minimum standards to calculate flight emissions to ensure the transparency and credibility of carbon-offset facilities offered to the travelling public.

• The ICAO Assembly is urged to adopt ICAO guidance on emissions trading for aviation on the basis of mutual consent between states.

Taken from IATA's website (www.iata.org).

Emirates SkyCargo

Having recently signed a memorandum of understanding with Dubai Customs to increase the use of electronic correspondence, Emirates SkyCargo is often viewed as a pioneering force in the regional market. Justifiably so, the carrier is under no illusions when it comes to the topic of the environment.

"The issue has been more politicised at this point in time then the reality actually merits. Things are changing and yes the cargo side has been a bit slower at picking up on it, but now it has done so it is working at maximum pace," says Ram Menen, divisional senior vice president of cargo, Emirates.

"At present there are a lot of misconceptions about the environmental effects of commodities and we are trying to work in conjunction with the industry itself to establish more precise facts and data.

What we are concerned about is people looking at individual aspects such as air transportation instead of the supply chain in its entirety.

Already intiating its greening process, the carrier also benefits from its current fleet of modern freighters and will continue to do so with further updated models.
Having taken delivery of two Boeing 747-400ERF aircrafts last year, the Dubai-based airline is expecting its first 777F to arrive by the end of this year followed but its first 747-8 in 2008.

In total, a combination of eight 777s and 747s will be delivered allowing Emirates to phase out its older generation models.

"We are working with the industry to reduce flight times and introduce more efficient flight routes, but at the same time from our point of view all our freighter will be brand new so therefore more fuel efficient," says Menen.

"We are a highly automated company and the amount of paper we use has been drastically reduced. We are fully e-freight compliant at the moment and can move cargo paperfree - the only reason we still keep these papers at the moment is because it may be required within the supply chain."

The e-freight initiative has so far failed to make massive strides in the Middle East but as mentioned previously, Emirates will no doubt be a key promoter of the cause.

With pilot projects proving a success in other parts of the world, Dubai is set to take part in the next wave and Emirates SkyCargo will be a notable participant.

"Information technology is key for allowing information to be shown throughout the supply chain. A majority of the industry is still plagued by limited systems, and trying to make an inflexible system flexible doesn't work," says Menen.

"Our customers have been working towards becoming electronic. We will be doing trials with them and hopefully over the next few months they too will become less reliant on paper based clearance.

Etihad

Reflecting on the current uncertainties regarding environmental responsibility, Etihad also rallies a cry for validating the facts.

As an IATA member, the Abu Dhabi airline will be keeping a close eye on research into the environmental impacts triggered by aviation, in particular comparing data to other modes of transport such as shipping and trucking.

"There is still ambiguity surrounding this subject area," says Des Vertannes, executive vice president of cargo, Etihad.

"Once we have got all the facts to hand, then there will be a position taken by IATA, which acts through its members such as us. Aviation is responsible for 2% of global emissions and obviously we have to find a way to minimise that and find a period of carbon neutrality.

Words of community and commitment, Eithad in part upholds its responsibility through a strikingly young fleet. With an average aircraft age of just two years, the airline is approaching the tail end of an order placed in 2005 and will soon initiate plans for a further order possibly consisting of Boeing 797s or Airbus 350s.

"As a consequence of our fleet we are not reliant on old technology. We are working alongside the industry in the development of all latest technologies and so will be aware of any changes and be able to include them in our future fleet.

This will be evident in the new aircraft types being produced by both Boeing and Airbus," identifies Vertannes.

"In terms of responsibility closer to home, we have been working with local authorities on improving efficiency of infrastructure. Abu Dhabi airport is currently expanding very rapidly to try and meet demands of cargo and passenger growth and they have done a good job so far.

However, we have to continue to ensure there are minimal inefficiencies and delays, ultimately reducing our overall carbon footprint," he adds.

Believing the Middle East supply chain is currently trying to understand the scale of the challenge before facing
it, Etihad feels that the investment coming into the region will certainly help counter inefficiencies.

"Pressure from the public will force the industry to act positively and combined with the progress in technology, change will happen. It will have to happen," Vertannes concludes.

Royal Jordanian

Further evidence of the Middle East's status as a pioneering region for modern aircrafts, Royal Jordanian recently underwent a significant fleet renewal programme.

Introducing the latest Airbus models with fuel efficient engines, such as the A320, A321 and A319, Royal Jordanian also implements smaller jets for local demands.

"This allows us to further right size the equipment and minimise fuel consumption," identifies Ingo Roessler, vice president cargo, Royal Jordanian.

I think the commitment from Royal Jordanian to the order of 12 Boeing 787 Dreamliners is a clear commitment to adopting the latest technology available.

Not only will these aircraft give maximum comfort and service to passengers and uplift opportunities for our cargo clients, but they will also help to create a sustainable operation that will in turn protect the environment as much as the commercial interest of the airline.

The Jordan-based airline has also recently jointed IATA's fuel efficiency programme. It began implementation of recommended fuel saving measures two months ago and the carrier is confident the programme will lead to further savings both in terms of fuel economy and measures.

"We are also involved in the e-freight initiative and have recently held a meeting with IATA to establish how best to move forward with this.

Royal Jordanian has decided to invest in a new IT platform, which is going to be the basic infrastructure we need to join the IATA e-freight initiative and allow us to simplify business transactions on the cargo side," reveals Roessler.

A firm believer that the right investment leads to improved efficiency and therefore automatically results in the best possible effects for the environment, Royal Jordanian feels this is being taken onboard in the Middle East.

"Environmental issues are certainly now being prioritised in company agendas. I personally feel this has been an overdue process, however, some countries such as the UAE have since managed to create a location geared to taking responsibility.

Striving towards more environmental friendly practices will also translate into the economy of the whole region," says Roessler.

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