The AGM also urged airports to develop the infrastructure that would enable the deployment and uplift of cleaner energies for the use of airlines across the spectrum of their operations, and aircraft and engine manufacturers to continue their drive for developing the engine and aircraft technologies and to focus primarily on game-changing developments that would enable the airlines to achieve their environmental targets.
With regards to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the AGM encouraged governments to register their environmental projects at ICAO to be able to issue carbon offsetting certificates eligible for use under CORSIA so as to make available enough certificates for airlines to use for compliance to CORSIA.
On the same topic, the AGM called upon ICAO member states to work towards including the following in the results of ICAO’s Third Conference for Sustainable Aviation Fuel that will be held in Dubai on 20-24 November 2023:
a) Encourage governments to adopt policies to incentivize the production of SAF rather than imposing levies, penalties, and mandates.
b) Have a mechanism in place that enables airlines to claim the reductions in emissions achieved when they use cleaner energy such as sustainable aviation fuels and low carbon aviation fuels.
c) ICAO states to agree on developing a global SAF accounting mechanism based on a robust chain of custody to enable SAF to be used by any airline anywhere in the world, even if physical availability is restricted.
d) ICAO states to agree to standardize the certification criteria for sustainable aviation fuels to enable airlines to be credited for emissions reduction when using SAF under any scheme.
Click here to view the full text of AACO 56th AGM resolution on Aviation and the Environment.
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MoUs signed between AACO and SITA to deliver the Sustainability Management Solution, and the Travel Digital Identity Solution
The AGM witnessed the signature of two Memoranda of Understanding between the Arab Air Carriers’ Organization and SITA, launching two solutions; namely, the Sustainability Management Solution, and the Travel Digital Identity.
AACO has identified sustainability and digital travel as the immediate two priorities for AACO, within its strategic direction to assist airlines in their digital transformation. Within less than 15 months, AACO delivered in partnership with SITA the two solutions which are being piloted by three airlines members in AACO.
The Sustainability Management Solution will enable airlines to optimize and manage their cost of environmental sustainability and deliver to their customers accurate and credible sustainability-related information about their travels.
The Travel Digital Identity solution will be the tool for creating seamless and efficient travel journeys for passengers through airlines, airports and border control agencies.
Although AACO members will be the launch airlines of these two solutions, the whole world, including travelers, airlines, airports and governments will benefit from them.
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AACO Secretary General’s Report
AACO Secretary General, Mr. Abdul Wahab Teffaha, presented his report to the 56th AGM. His speech and presentation can be viewed here.
The Secretary General underlined that by the end of 2023, the industry will be as close as it can be to the pre-COVID level of air transport’s activity. In 2023, it is expected that the global number of air passengers will reach 4 billion (of which 1.4 billion are international passengers), representing 91.7% of 2019 numbers, and the number in the Arab region will reach 300 million (of which 277 million are international passengers), representing 89% of 2019 numbers.
AACO members recorded a higher load factor than that of the industry; 80.7% vs. 79.1%. This can be attributed to a number of factors being; reasonable policies by Arab states for the containment of COVID-19, advanced and continuous development of infrastructure, quality of service of those airlines, and serving the passenger as a guest instead of merely offering a transport service. Meanwhile, new challenges are looming, including:
1. Increase in operational costs
2. Increase of fuel prices
3. Geopolitical tensions
4. High inflation rates
5. The implications of the extended lockdowns from 2020 to 2022 that disrupted the supply chain and reduced the skills in aviation.
Moving on, the Secretary General emphasized two strategic issues that he referred to as the industry’s duties towards the traveling public being; finding ways to make the travel experience an easy one, and ways to reduce the industry’s environmental footprint till it gets to zero.
On the issue of making the travel experience easier, the Secretary General highlighted AACO’s efforts, under the directives and supervision of its Executive Committee, to invoke digital transformation in the travel processes to dismantle gradually the complications of air travel processes and enable the passenger to achieve almost the same experience in the customers’ travel experience as the one that they are experiencing in their retail shopping.
On the issue of environmental sustainability, the Secretary General reminded everyone of the two global agreements reached under the umbrella of the International Civil Aviation Organization, being the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the Long-Term Aspirational Goal of Net Zero Emissions by 2050, and of the attributes agreed globally to ensure that international aviation achieves those targets, as follows:
1- That the agreements reached within ICAO to be the sole agreements to deal with the environmental impact of international air transport. The Secretary General stressed on the importance of abiding by the global solutions, reached at ICAO, to a global issue such as climate change.
2- Developing the air transport infrastructure: as ICAO estimates that the contribution of infrastructure developments amounts to 11% reduction in carbon emissions in 2050.
3- Implementing market measures: which means buying carbon certificates from sources which have reduced their carbon emissions. In this regard, the Secretary General encouraged governments to register their projects that are reducing emissions under the UNFCCC, so those projects produce carbon offsetting certificates for airlines to use to reach their environmental goals.
4- Technological Advancements: Engine and air frame manufacturers to develop game changing technologies.
5- The use of cleaner energy: the use of sustainable aviation fuels and low carbon aviation fuels will be the major contributors to reaching the industry’s environmental targets according to ICAO and IATA. The Secretary General highlighted two policy paths that are currently being adopted for that, one is incentive based policies such as the ones in the US and the other are SAF mandates such as the ones in the EU under the RefuelEU law highlighting that some provisions of this law will lead to subject all airlines operating from the EU to a measure that will extend beyond the EU.
In anticipation of the results of the coming ICAO’s Third Conference for Sustainable Aviation Fuels that will be held from 20 to 24 November 2023 in Dubai, the Secretary General called upon the conference to agree on the following principles for the production of cleaner energies:
• Firstly, to call upon states to adopt policies supporting the production and the use of SAF and LCAF, built upon incentives, instead of taxes, penalties, or mandates.
• Secondly, any reduction in emissions from the use of SAF and LCAF needs to be credited to the airlines in whichever program they are operating under, be that CORSIA or otherwise, while avoiding double counting.
• Thirdly, to create an international mechanism of accounting for the use of SAF based on robust chain of custody approaches to enable SAF to be purchased by any airline anywhere in the world, regardless of local physical availability.
• Fourthly, to agree on the standardization of SAF certificates in order to facilitate the recognition of reductions in emissions when SAF and LCAF are used by airlines.
Click here for the full speech of AACO Secretary General
AACO’s Annual Report and Annual Air Transport Statistics: Data on the industry’s performance at the global and regional levels was distributed to delegates of the AGM through AACO’s Annual Report and the Annual Arab Air Transport Statistics bulletin.
The Annual Report recapped AACO’s work over the past year that focused on two priorities. The first is environmental sustainability and the second is the importance of digital transformation to the aviation’s industry development. In addition, the report included some data and statistics for 2022 and half year of 2023, AACO’s areas of work including the AACO fuel project, aero-political issues, aviation’s safety and security, engineering and maintenance, ground handling, emergency response planning, and work on in-flight medical emergencies.
The Annual Arab Air Transport Statistics bulletin covered 2022 data and included statistics on the global and Arab world economies, global and Arab air travel and tourism, and AACO member and partner airlines’ data.
Major highlights of the data included in the two bulletins are listed here below:
• Total passenger traffic to/from and within the Arab world reached around 273 million passengers; increasing by 111.6% in 2022 compared to 2021, while remaining 18.9% below 2019 levels.
• Passengers using Arab airports in 2022 reached 322.3 million passengers, which is around double the number of 2021, remaining 18.2% below 2019 levels.
• Cargo handled at Arab airports declined by 8.8% in 2022 compared to 2021, reflecting the slowdown in global trade, and consequently air freight. The volume is 17.7% below 2019.
• By the end of 2022, AACO members passenger traffic measured in RPKs, and seat capacity measured in ASKs grew by 138.9% and 66.5%, respectively, compared to 2021. During the first quarter of 2023, AACO members’ operations increased significantly, with RPKs reaching around 93.0% and ASKs around 85.3% of 2019 levels while comparing the same period.
• By the end of 2022, AACO members’ total fleet reached 1,561 aircraft with in-service aircraft representing 82% (1,273 aircraft). AACO members’ order book as at 30 August 2023 anticipates the delivery of 1,293 new aircraft until 2035.
• In 2022, AACO members returned to profitability, achieving USD 72.45 billion (4.4% above 2019 levels) in total revenues, while maintaining their costs at USD 67.79 billion (4.7% below 2019 levels). This has resulted in a net result of USD 4.66 billion with a net margin of 6.4%.
To download AACO’s Annual Report, please click here
Tags: Abdul Wahab Teffaha, AACO
