Aviation Sustainability and the Environment, CAPA 27-Aug-2020

ecoDemonstrator programme testing quieter, cleaner flights with Etihad

• Collaboration with Boeing, NASA and Safran on Etihad's newest 787 accelerates innovation to improve the sustainability of air travel.

An Etihad Airways 787-10 Dreamliner decked out with special equipment that can enhance safety and reduce CO2 emissions and noise has commenced flight testing this week for Boeing's ecoDemonstrator programme.

A series of flights will gather the most detailed information to date about aircraft acoustics from some 1,200 microphones attached to the outside of the 787 and positioned on the ground. The collaboration between NASA and Boeing will improve the agency's aircraft noise prediction capabilities, advance ways for pilots to reduce noise and inform future quiet aircraft designs.

"At NASA, we've been researching the individual airplane noise sources, their interactions with the airframe and how they combine to the total aircraft noise," NASA technical lead Dr. Russell Thomas said. "This unique, carefully designed flight test provides the environment where all these effects are measured, which will be key to advancing our ability to design lower-noise aircraft."

Mohammad Al Bulooki, Etihad Aviation Group Chief Operating Officer, said: "Etihad participating in this year's ecoDemonstrator programme builds on our core innovation and sustainability tenets while supporting the research and development of our partners to bring innovation from the laboratory to a real world testing environment.

"By choosing to take part in this programme we are proud to work with the likes of Boeing, NASA and Safran to test cutting-edge technologies and explore "blue sky" opportunities to improve airspace efficiency, reduce fuel use, lower noise for the community and cut CO2 emissions.

"Sustainability remains a priority for Etihad in spite of the current Covid19 crisis and this is just one initiative we've taken since the start of the pandemic to continue our drive for sustainable aviation. As far as Etihad is concerned, environmental sustainability shouldn't be an option or fair-weather project to be shelved when it's not convenient against other challenges."

Most community complaints about aircraft noise stem from flights approaching airports, according to industry figures. About one-quarter of the noise is created by the landing gear. Another project will test landing gear modified to be quieter by Safran Landing Systems.

"Our collaboration with NASA and Safran is key to accelerating innovation and furthering the ecoDemonstrator's mission to improve the sustainability of air travel," ecoDemonstrator Program Chief Engineer Rae Lutters said. "We're eager to see a year's worth of planning come to life when we begin testing."

Two flights are being conducted during which pilots, air traffic controllers and an airline's operations centre simultaneously share digital information and use a NASA system called tailored arrival management. These tools enhance safety by reducing workload and radio frequency congestion, optimise routing efficiency to lower fuel use, emissions and noise, and support the FAA's Next Generation Air Transportation System.

As part of Boeing's Confident Travel Initiative to address COVID-19, a handheld ultraviolet light wand will be tested to determine its effectiveness in disinfecting flight decks and cabins.

All scheduled test flights are being flown on a blend of up to 50% sustainable fuel, which includes the largest volumes of 50% blend biofuel commercially produced. Flight testing at Boeing's facility in Glasgow, Mont., is expected to last about 10 days before the aircraft is delivered to Etihad in late September.

This is the latest programme under Etihad's industry-leading strategic partnership with Boeing, focusing on innovating real-world solutions to the key sustainability challenges facing the aviation industry.

This is the first time the ecoDemonstrator programme is using a Boeing 787-10 since flight testing began in 2012.

SAS aims to achieve 25% reduction in CO2 emissions five years earlier than planned

SAS reported (25-Aug-2020) it has brought forward its goal of achieving a 25% reduction in CO2 emissions compared to 2005 levels from 2030 to 2025. It will also target an increase in the usage of sustainable aviation fuels by up to 10% by 2025. [more - original PR]

Excerpt from original report: CONTINUED NEGATIVE IMPACT OF COVID-19

FINANCIAL SUMMARY

The coronavirus and travelling restrictions has led to a collapse in the demand for air travel. Consequently, the number of passengers traveling with SAS dropped 86% and total revenue decreased 81% in the quarter. Domestic travel has rebounded more quickly than other parts of our business and accounts for most of our quarterly revenue.

Despite our immediate measures to reduce costs to adapt to a new reality, the cost reduction of 67% did not offset the sharp decline in revenue. As a result, earnings before tax came in at SEK -2.1 billion, some SEK 3.6 billion below last year. The result was positively impacted by SEK 840 million from a strengthening of the Swedish krona, primarily against the US dollar. However, in line with other airlines, the negative development in aircraft valuations necessitated a SEK 1,040 million write down of some aircraft assets.

Our focus on preserving cash is evident through a monthly operating cash burn of SEK 320 million. This is of course significantly worse than last year but below the range we presented in the second quarter, and we will continue to monitor cash burn as we slowly continue to ramp-up operations. At the end of the third quarter our cash position was SEK 6.2 billion, which includes the SEK 3.3 billion drawn under the credit facility guaranteed by the Danish and Swedish states.

CUSTOMER DEMAND SLOWLY INCREASING

Demand continues to return slowly and in line with the estimated ramp-up plan we presented in the second quarter. In the quarter, demand was centered around domestic travel and attractive European summer destinations. In July, SAS operated 8,700 departures representing some 25% of prior year available seat kilometers. This is an increase of some 20 percentage points compared to the first month of this quarter. During the fourth quarter, we will continue to ramp-up production and we expect to reach 30% -40% of prior year available seat kilometers by the end of Q4.

Despite the slow but ongoing recovery as noted in our traffic figures, demand going forward remains uncertain and is heavily dependent on the easing of travel restrictions as well as passenger confidence and willingness to travel. Furthermore, it is difficult to predict how demand will evolve during the coming fall and winter due to changed customer behavior with bookings being made closer to the date of travel. Our current expectation is that the ramp-up phase for the airline industry may last until 2022 before demand can reach more normalized levels, with a return to pre COVID-19 levels a few years thereafter.

PROGRESS ON REVISED BUSINESS PLAN

SAS continues to make progress with its revised business plan, which is based on four building blocks: To be the preferred airline for Scandinavia's frequent travelers; to transition to a hyper modern single-type fleet; to establish a fully competitive operating model, and; to achieve global leadership in sustainable aviation. During the quarter several milestones were reached.

Almost 4,000 redundancies (of approximately 5,000 in total) have now been concluded and local employment agreements are being renegotiated. In July, we signed an agreement to outsource ground handling operations in both Gothenburg and Malmö, concentrating our operations to the three main hubs in Copenhagen, Oslo and Stockholm. Even though the initiatives regarding our work force are difficult and unfortunate, these measures are unavoidable and necessary to safeguard SAS for the future.

Through constructive dialogue with Airbus, we have managed to defer 8 A320neo and 2 A350-900 aircraft deliveries. These deferrals are important as they reduce our capital expenditures for 2021-2024 and better align deliveries of new aircraft with the expected return in demand. We are still committed to achieving a single-type fleet operation by 2023, based on new Airbus aircraft that will provide lower fuel consumption and reduced maintenance costs compared with our current fleet composition. Furthermore, we have made progress on our ambitious sustainability goals by accelerating the phase out of older and less fuel-efficient aircraft. We have also renegotiated agreements with several suppliers, including wet-lease providers. The new agreements will lead to lower costs and increased flexibility, through a higher share of variable costs going forward.

We have introduced new procedures to ensure that our customers experience the safest travel experience possible and continue to provide an attractive timetable for travelers to, from and within Scandinavia. At the same time, we regret that many customers are still waiting for refunds from canceled flights. I would like to emphasize that our customers that are entitled to refunds will be refunded, and we have increased our capacity to handle the large number of cancellations in these unprecedented circumstances.

PROGRESS ON RECAPITALIZATION PLAN

Despite our own efforts, the COVID-19 pandemic has resulted in a need to remedy the liquidity situation and the negative equity caused by the outbreak. During the quarter SAS reached an agreement in principle with the noteholders committee representing a large proportion of the holders of SAS bonds and hybrid notes. Furthermore, the governments of Denmark and Sweden have now approved the revised recapitalization plan, which has also been approved by the European Commission under applicable State aid rules framework.

The next steps of the plan are to obtain a vote in favor of the offer from the bond and hybrid holders at the noteholders meeting on September 2, and a vote in favor of the recapitalization plan at the extraordinary shareholders' meeting scheduled for September 22. The entire revised Recapitalization plan is expected to be completed early November.

SAS plays a vital role in connecting the Scandinavian countries to the rest of the world, as well as being an important infrastructure provider within the region. By focusing on rebuilding our domestic and intra-Scandinavian presence, we have been able to increase capacity ahead of competition. I am grateful that our major shareholders have decided to support SAS and trust that others will do the same in these unprecedented times. SAS is determined to continue as Scandinavia's leading airline as the world recovers from the COVID-19 pandemic.

On behalf of all of us at SAS, I'm looking forward to once again welcoming you onboard on one of our flights soon!

Rickard Gustafson,

President and CEO

China Eastern Airlines aircraft fuel consumption per ton km down 4% from 2017 to 2019

China Eastern Airlines stated (19-Aug-2020) its aircraft fuel consumption per ton kilometre reduced by 4.3% from 2017 to 2019. [more - original PR]

Original report: China Eastern ranked among top global airlines in MSCI ESG rating

Queenstown Airport Corporation outlines FY2020 environmental achievements

Queenstown Airport Corporation Limited (QAC) outlined (20-Aug-2020) the following environmental achievements in FY2020:

• Completed a waste management audit to establish benchmarks as part of waste minimisation activities at Queenstown Airport;
• Supported the Wakatipu Reforestation Trust by contributing to the organisation's ongoing operating costs;
• Continued active support of the national Tiaki Promise to protect the environment and encourage sustainable tourism practices for visitors to the region;
• Announced a three year partnership with the Wakatipu High School Foundation, with a focus on supporting families experiencing hardship;
• Hosted "Roll out the Rainbow" at Queenstown Airport for Winter Pride NZ;
• Introduced a predator control pilot programme at Queenstown Airport with support from Wakatipu Wildlife Trust and Cardrona Alpine Resort;
• Hosted more than 250 students from around the region as part of QAC's education programme;
• Supported various local community events and not-for-profit organisations. [more - original PR]

Excerpt from original report: FY20 Annual Results: Business stabilisation plan implemented in response to COVID-19