Biofuels: The cost of going green

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Having pledged to pursue carbon-neutral growth from 2020 onwards at last year’s ICAO Assembly, airlines are committed to reducing the environmental cost of flying even as they gear up for decades of continued growth in air transport.

Initially, this will be achieved through the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) – a market-based mechanism that plugs the gap between the industry’s targeted emissions and its actual output. For every year that airlines exceed their emissions quotas, they have agreed to invest in UN-approved carbon-reduction schemes that mitigate the resultant environmental damage.

However, CORSIA is just one component in a basket of long-term measures aimed at achieving carbon neutrality. The other three are technological improvements, such as more fuel-efficient engines; operational advancements, such as better air-traffic management; and sustainable fuels, which are more commonly referred to as biofuels...

Airport charges: Paying the price

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While investigating profitability in the air transport value chain last year, a joint study by IATA and McKinsey & Company found that the two sectors with the lowest return on invested capital are airlines first and airports second.

Being surrounded by business partners with greater financial stability inevitably means that both industries are proactive in minimizing their costs and maximizing their revenue. Little wonder, then, that divergent narratives arise when evaluating whom certain costs should be ascribed to, and how best to recover these costs through proportional charges...

Do not disturb

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For an industry forecasting average compound annual growth rates of 5.4% until 2017, balancing the benefits of enhanced global connectivity with the needs of people living under flightpaths has never been more urgent.

Supporters of airport expansion often point out that modern aircraft are 75% quieter today than their forbearers were 50 years ago.

But reducing noise at its manufacturing source is just one of four ways ICAO seeks to mitigate noise pollution for local residents. And according to Thomas Roetger, IATA’s Assistant Director, Aviation Environment Technology, the scope for OEM-led improvements is declining each year...

Clear skies ahead

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The standards for meteorological planning of air navigation are laid down in ICAO Annex 3 and observed by civil aviation authorities around the globe. But beyond national borders, just two bodies provide en-route weather flight planning data: Britain’s Met Office, and America’s National Oceanic and Atmospheric Administration (NOAA).

While it is easy to get lost in the acronyms and technical detail of weather science, the remit of these two entities is relatively straightforward. Both function as World Area Forecast (WAF) centers that broadcast the raw data and charts used by flight briefing companies for route optimization, and by airports for weather-related contingency planning...

Re-inventing revenue management

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Revenue management has passed through numerous phases since its widespread adoption in the 1980s. The discipline continues to evolve today, experimenting with different ways of matching the right price to the right customer.

Following deregulation in the US, the airline industry's initial focus was on maximizing revenue in an increasingly competitive marketplace. Seat inventory controls used historical demand forecasts to assign optimal price points for distinct passengers, factoring in the length of time until travel and the gradually shrinking pool of seat availability. Hence the sharp rise in ticket prices on last-minute bookings.

The mathematical algorithms making these calculations became more sophisticated over time, incorporating ever-more complex considerations ranging from competitors' offerings to seasonal holidays and events. But the overarching goal remained matching passenger demand with a perishable supply of seats in the most revenue-maximal way...

Personalisation: Making a difference

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“The shape of things to come”, proclaimed Imperial Airways, the colonial precursor to British Airways, in a 1936 advertisement for Short Empire Flying Boats. Its notice featured an artist’s impression of stately travellers boarding one of the revolutionary aircraft, which were due to enter service the following year.

Imperial’s four-engine, double-decker Flying Boats had sleeping accommodation for 16 passengers, with cabin interiors comprising three large saloons, one kitchen and one ever-essential smoking room. On day-time flights, its capacity stretched to 24.

Having handled just 8,012 passengers in 1936/37, the airline’s idealistic vision of the future may have seemed reasonable at the time. Fast forward seven decades, however, to an age when 3 billion travelers take to the skies each year, and its prophecy of airborne luxury is hard to reconcile with modern-day reality...