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Aviation Sustainability and the Environment, CAPA 03-Feb-2020

Analysis

Headlines

VietJet reduces CO2 emissions by 15.3m kg in 2019

Ryanair: Voluntary carbon offsetting to 'increase significantly'

Heathrow introduces CO2 offsetting option

San José Mineta International Airport opened six new gates, began garage construction in 2019

CAS replaces four JetBlue Airways carbon vehicles

This CAPA report features a summary of recent aviation sustainability and environment news, selected from the 300+ news alerts published daily by CAPA. For more information, please contact us.

VietJet reduces CO2 emissions by 15.3m kg in 2019

VietJet Air reported (01-Feb-2020) the following operational highlights for 2019: 

  • Application of advanced technology has sped up process of improvement and sustainable development;  
  • Completed transferring 80% of its data system to Amazon Cloud using the flight data monitoring programme; 
  • Saved more than 4.8 million kg of fuel and reduced 15.3 million kg of CO2 emissions.

Vietjet's fleet has an average age of 2.75 years, according to Vietjet.

Original Report: Vietjet announces business result for 2019’s 4th quarter with revenue on air transportation increasing by 25%

Vietjet announces business result for 2019’s 4th quarter with revenue on air transportation increasing by 25%

Vietjet continues to see positive growth in its core business of air transportation in 2019, maintaining its leading position in Vietnam’s domestic market and fast growth in international flight network. In 2019, the airline’s flight network increased by 24% with 22 international routes connecting Vietnam with JapanHong Kong SAR, IndonesiaIndia, etc. Vietjet also transported nearly 25 million passengers in 2019, an increase of 28% compared to 2018.

Vietjet Aviation Joint Stock Company (HOSE code: VJC) has announced its business result for 2019’s 4th quarter. Accordingly, the airline’s revenue for air transportation in the 4th quarter stood at VND10,500 billion, an increase of 25%. This results in its 2019’s revenue and profit from air transportation standing at VND41,097 billion and VND3,936 billion respectively, increasing by 21.4% and 29.3% respectively compared to 2018. Vietjet’s revenue from sales & leaseback activity has been adjusted due to the airline’s revising its aircraft delivery from Airbus in 2019. The airline received 16 aircraft in 2018 while the number for 2019 was 7 aircraft, which results in the fact that Vietjet’s accumulated revenue and profit in 2019 stood at VND52,095 billion and VND5,010 billion respectively, a slight decrease compared to those for 2018.

To compensate for the delay in new aircraft’s delivery from Airbus, Vietjet carried out a lease of 9 aircraft, totaling its operating fleet to 78 aircraft with 321,000 aircraft operation hours and 139,000 flights. Its load factor stays at 87% with technical reliability rate being at 99.64%, which are among the top airlines in the Asia Pacific region. Vietjet has also been awarded the highest ranking for safety with 7-stars from AirlineRatings.com. 

Application of advanced technology in its operation has been the key for Vietjet to speed up its process of improvement and sustainable development. The airline has completed transferring 80% of its data system to the Amazon Cloud, using the Flight Data Monitoring (FDM) program to effectively manage flight crew’s operation and support SFCO2 fuel control program. Thanks to the SFCO2 program, in 2019 Vietjet has saved more than 4.8 million kg of fuel and reduced 15.3 million kg of CO2 emissions. 

The carrier’s growing business also attributes to its effective strategies on ancillary revenue management, including extra service fees, cargo transportation, inflight services (food, beverages & duty-free stuff) and advertisements. In 2019, Vietjet’s ancillary revenue was VND11,356 billion, up by 35.2% compared to 2018. The portion of ancillary revenue in the airline’s total air transportation revenue also increases from 25.4% in 2018 to 30% in 2019. Following the sustainability-focused model of low-cost carrier (LCC), ancillary revenue has become an important factor determining the success of Vietjet because of its profit margin of over 90%. According to the CarTrawlerYearBook 2019 report, Vietjet was ranked 12th worldwide in terms of its ratio for ancillary revenue on top of total air transport revenue. 

According to Vietjet’s consolidated financial report, the airline’s total asset in 2019 was VND47.608 billion with the owner’s equity being at VND17,661 billion including VND2,347 billion of treasury shares, an increase of 22% and 25.8% respectively against those in 2018. Its current liquidity was 1.4 while debt to equity ratio was 0.77, the lowest rate in Vietnam’s aviation industry. Vietjet’s EBITDAR margin was 31%, being ranked one of the top airlines in the world. 

Vietjet’s new and modern fleet also become younger with the average age of 2.75 years and fuel-efficient. Especially, in September 2019, the airline received a A321neo ACF (Airbus Cabin Flex) aircraft with 240 seats, the first of its kind in the world. The new aircraft features fuel consumption savings by a minimum of 16%; noise reduction up to 75%; and emission reduction up to 50%. In 2020, the airline plans to take delivery of 9 more new A321neo aircraft and 20 more every year from 2021, which is expected to reduce fleet operation cost and increase the profit from air transportation and aircraft financing activities. Additionally, Vietjet continues to optimize its operation and management cost in order to enhance its air transportation business performance.

With modern fleet and expanding flight network all over Asia Pacific region, Vietjet’s growth potential is high considering also the fact that Vietnam is geographically located within the radius covering nearly half of the world’s population. This market segment is expected to create high currency income and good profit margin to the airline thanks to its growth in ancillary revenue and low fuel price.

Ryanair: Voluntary carbon offsetting to 'increase significantly'

Ryanair chief marketing officer Kenny Jacobs said a "large proportion" of passengers use the carrier's voluntary offsetting tool on its booking system and this is expected to "increase significantly" (aeroTELEGRAPH, 31-Jan-2020). He estimated the figure at around 3% of passengers, and "well over" 3% in the German market.

Heathrow introduces CO2 offsetting option

London Heathrow Airport introduced a CO2 offsetting option in partnership with environmental firm CHOOOSE (Energy Live News, 30-Jan-2020). The flight footprint calculator enables passengers to calculate and then offset the carbon footprint of their flight by supporting a reforestation program in Uganda or a wind farm in Costa Rica. The service will be available online with plans to trial it at terminal kiosks as well.

San José Mineta International Airport opened six new gates, began garage construction in 2019

San José Mineta International Airport reported (30-Jan-2020) the following operational highlights for 2019:

  • Six new gates opened in terminal B;
  • Construction began on multi level garage to expand economy lot 1;
  • Commissioning a fleet of 10 battery powered, zero emission shuttle buses;
  • First US airport to launch all digital in-terminal advertising programme;
  • Reached new 10 year agreement with airlines serving San José Mineta that reinforces their commitment to Silicon Valley market.

Extract from original report:

Mineta San Jose International Airport (SJC) passenger traffic continued to soar in 2019, with nearly 15.7 million departing and arriving passengers - a 9.3% increase with 1.3 million more customers choosing Silicon Valley’s airport compared to 2018. Over the past four years, SJC has continued to be America’s fastest-growing major airport.

“This marks the second consecutive year of record-breaking passenger totals for Silicon Valley’s airport. This growth is due to our airlines being responsive to our travelers’ needs by providing more flight options around the globe, the airport’s close proximity to Fortune 500 companies, and SJC’s convenience, efficiency and ontime reliability,” said John Aitken, SJC Director of Aviation.

SJC travelers in 2019 enjoyed more nonstop destinations; the opening of six more gates to accommodate continued growth; the opening of a second common-use lounge; and new and exciting food, beverage and retail concessions. In addition, SJC became the first U.S. airport to offer all-digital, in-terminal advertising.

In 2020, SJC customers can expect even more nonstop destinations, more connections to a broader global network and more choices to eat. “With the strength of our local economy and commitments from our airline partners to provide more flight choices for Silicon Valley travelers, we are excited for the opportunities in 2020 and beyond,” added Aitken.

CAS replaces four JetBlue Airways carbon vehicles

Certified Aviation Services (CAS) replaced (31-Jan-2020) four carbon vehicles, operated by JetBlue Airways, with electrically powered vehicles, in order to support the carrier's goal of becoming the first carbon neutral US airline. Three more vehicles are expected to be replaced in the future.

CAS’ LAX regional manager John Blair stated: “We are excited to make the commitment of becoming more carbon-neutral. We look forward to continuing our efforts in the battle against climate change. The addition of these electric-powered vehicles is the first step forward in producing long-term solutions for CAS to be eco-friendly.”

Original report: CAS Initiates Carbon Offsetting

Certified Aviation Services supplanted four carbon vehicles with electric-powered vehicles to support JetBlue in its advancement of being the first carbon-neutral U.S. airline.

Certified Aviation Services, LLC (CAS), supports JetBlue in its advancement of being the first carbon-neutral U.S. airline.

In its efforts, CAS supplanted four carbon vehicles with electric-powered vehicles, with three more in the pipeline. CAS designated a four-seater Global Electric Motorcar (GEM) to solely be utilized by its interior crew when servicing JetBlue’s fleet. The four-seater GEM features an attached hitch for secure transportation of equipment.

As climate change continues to expand, the aviation industry’s role in it raises concern. CAS is committed to reducing that concern by implementing more electric cars throughout its 19-line stations across America.

CAS’ LAX Regional Manager, John Blair, stated, “We are excited to make the commitment of becoming more carbon-neutral. We look forward to continuing our efforts in the battle against climate change. The addition of these electric-powered vehicles is the first step forward in producing long-term solutions for CAS to be eco-friendly.”       

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