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


Etihad Airways and Boeing commence test flights for sustainable air travel on 787-10

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

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

Queenstown Airport Corporation outlines FY2020 environmental achievements

Zurich Airport: COVID-19 crisis 'has done nothing to alter' CO2 reduction ambitions

  • Etihad Airways and Boeing have commenced test flights for sustainable air travel on the 787-10, focusing on improving aircraft noise prediction capabilities and exploring the use of ultraviolet light for disinfection.
  • SAS has brought forward its goal of achieving a 25% reduction in CO2 emissions compared to 2005 levels from 2030 to 2025, and aims to increase the usage of sustainable aviation fuels by up to 10% by 2025.
  • China Eastern Airlines has reduced its aircraft fuel consumption per ton kilometer by 4.3% from 2017 to 2019.
  • Queenstown Airport Corporation has achieved various environmental achievements in FY2020, including waste management audits, support for reforestation, and hosting sustainable community events.
  • Zurich Airport remains committed to its goal of reducing CO2 emissions to net zero by 2050, despite the impact of the COVID-19 crisis.
  • Zurich Airport has pursued environmental initiatives such as researching synthetic fuel production and operating sustainable taxi 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.

Etihad Airways and Boeing commence test flights for sustainable air travel on 787-10

Etihad Airways announced (26-Aug-2020) the commencement of flight testing for sustainable air travel with Boeing on a 787-10, as part of Boeing's ecoDemonstrator programme.

A series of test flights will be operated with the 787-10 to gather data on information such as aircraft acoustics, and in turn improve aircraft noise prediction capabilities, advance measures for pilots to reduce noise and inform future quiet aircraft designs.

NASA and Safran are also collaborating on this project. A handheld ultraviolet light wand will also be tested to determine its effectiveness on disinfecting aircraft interiors, as part of Boeing's initiative to address COVID-19.

Etihad Aviation Group COO Mohammad Al Bulooki stated: "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" [more - original PR]

Original report: ecoDemonstrator programme testing quieter, cleaner flights with Etihad

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


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.


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.


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.


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

China Eastern Airlines Holding Limited ("China Eastern" for short) got the A rating in the latest ESG (Environmental, Social and Governance) criteria, according to global index compiler MSCI.

China Eastern and five other airlines, including Delta Air Lines and Singapore Airlines, beat 74 percent of global airline companies and tied for first place in the rating, which included 18 airlines around the world.

According to the report from MSCI, China Eastern scored higher than the industry average in terms of substantive issues such as corporate governance, carbon emission, as well as privacy and data security. China Eastern has shown the best practice among global airlines in carbon emission, privacy protection and data security.

Against the backdrop of global warming, China Eastern has been trying to enhance fuel efficiency and create greener flights by adopting energy conservation methods based on informatization and marketization. After over 2 years efforts, China Eastern's fleet reduced fuel consumption per ton-kilometer by 4.3 percent in 2019 from that in 2017.

To guarantee passengers' privacy security and data protection, China Eastern starts from top-level design to strengthen risk prevention and control in such aspects as cyber security, compliance with relevant regulations, and personal information protection.

The company has comprehensively upgraded the its privacy policies of all service channels, and have relevant policies and rules passed international standards for information security ISO27001 and be validated by international service management system.

China Eastern has released social responsibility report to reveal its ESG performance in a transparent and comprehensive way to the public for 12 consecutive years. The company attaches great importance to respond to in its social responsibility report the issues MSCI ESG focuses on and enhances information transparency regarding certain topics based on the MSCI ESG report so as to meet the capital market and the public's expectations on its ESG performance.

China Eastern has also made considerable achievements in social responsibilities, poverty alleviation and staff care. The company has carried out many poverty alleviation projects in 17 consecutive years, covering fields including aviation, education, medical services, and industrial consumption. It has accumulatively input over 57 million US dollars into these projects. So far, China Eastern has helped 75943 people in nine villages of two counties shake off poverty.

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

Queenstown Airport Corporation Limited (QAC) has today released its annual results for the financial year ended 30 June 2020.

The financial year started with a solid performance as reported in QAC's interim results in February. However, the outbreak of the COVID-19 global pandemic in the second half of FY20 and the lockdown period in the fourth quarter presented unprecedented challenges for the business, airport community and district. As a result, QAC's performance was impacted by the extended closedown of Queenstownand Wanaka airports and subsequent downturn in international and domestic travel.

QAC Chairperson, Adrienne Young-Cooper said: "In response to COVID-19 and its ongoing impacts, QAC's overarching mission has been safeguarding the company's core capability to operate vital airport infrastructure for the district and to support its recovery,"

"We took immediate and decisive steps and implemented a series of initiatives designed to respond to and mitigate the immediate impact of the pandemic on our business and on the wider airport communities at Queenstown and Wanaka, including the removal of all discretionary operational expenditure and the suspension of all non-essential capital expenditure,"

"To ensure the resilience of the broad-based commercial activities across the airports, QAC also provided extensive relief packages to commercial operators at both Queenstown and Wanaka airports," said Mrs Young-Cooper.

Total income for the financial year was $46.7 million, representing a decrease of $3.0 million (6%) compared to the previous financial year. Profit for the year was $18.0 million, up $1.4 million (8%) compared to the last financial year. Operating earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) decreased by $3 million, or 9%, to $31.3 million.

QAC declared an interim dividend of $1.0 million to its two shareholders Queenstown Lakes District Council (75.01%) and Auckland International Airport (24.99%) in line with the Company's dividend policy. For majority shareholder Queenstown Lakes District Council, this was a dividend of $750,100.00. A final dividend was not declared for FY20 due to the impact of COVID-19.

The Company's investment in airfield and terminal infrastructure resulted in an increase in the cost of depreciation and funding costs. New capital investment during the financial year included implementation of the common-use self-serve (CUSS) check-in technology, runway maintenance works, seismic improvement works, noise mitigation activities and ongoing terminal improvements.

The total assets at both Queenstown and Wanaka airports, including property, plant and equipment were $399 million as at the reporting date.

A total of 1,870,619 passenger movements (arrivals and departures) were recorded at Queenstown Airport in FY20, a 19% decrease on the previous year, with international passenger movements down 11% to 583,219 and domestic passenger movements down 23% to 1,287,400. While there was a small growth in passenger numbers in the first half of the financial year compared with the previous year, the impact of COVID-19 in the second half of the financial year saw a major decline in passengers.

General aviation (fixed wing and helicopter) movements at Queenstown Airport were down 26% on the same period last year, while private jet movements reduced by 16%. At Wanaka Airport, general aviation movements (fixed wing and helicopter) were down 36% on last year.

Chief Executive, Colin Keel said: "As part of our response to COVID-19 we, like many other businesses, made the extremely difficult decision to undertake a company-wide organisational restructure. The past several months have been challenging for our team and I have appreciated the high level of professionalism and empathy they've shown through a tough time,"

"While we were able to take advantage of the Government's wage subsidy programme and retain all permanent staff to the end of FY20 on higher than the wage subsidy level we have recently farewelled some very dedicated and talented people who made a significant contribution to QAC and to the community in their time with the airports," said Mr Keel.

The Southern Lakes region has been one of the hardest hit in New Zealand by COVID-19. Mr Keel said: "The next phase of our response is to ensure that the business is stabilised over the financial year to 30 June 2021 by focusing on the wellbeing of our people and underlying business performance, working closely with our airline customers, and supporting the recovery of the district and its communities."

Mrs Young-Cooper said: "One of the silver linings that ripples right through QAC and the wider community is the opportunity this gives us to reset our future, be innovative, collaborative and considered. The board of directors is confident that the local community has the assets and capability required, through QAC, to provide the air transport infrastructure the region needs now and into the future,"

"QAC went into FY20 with a strong balance sheet. While COVID-19 changed the aviation and tourism sectors virtually overnight and will continue to create uncertainty for the foreseeable future, we have taken a measured approach in our response. As we enter FY21 the fundamentals of the business remain strong and we are well positioned to navigate through the COVID-19 environment," said Mrs Young-Cooper.

Zurich Airport: COVID-19 crisis 'has done nothing to alter' CO2 reduction ambitions

Zurich Airport stated (21-Aug-2020) the COVID-19 crisis "has done nothing to alter" its plans to reduce CO2 emissions to net zero by 2050.

To achieve this goal, the airport plans to renovate buildings, install modern energy supply systems and commit to carbon-neutral alternative fuels.

Zurich Airport pursued a number of environmental initiatives in 1H2020, including a partnership with tech company Synhelion SA to research a process to mass-produce synthetic fuel from air and sunlight and the operation of sustainable taxi vehicles by the airport's taxi concessionaire from Jan-2020. [more - original PR]

Excerpt from original report: Flughafen Zürich AG: Interim Results 2020

The first half of 2020 was largely dominated by the coronavirus crisis: compared with a profit of CHF 143.4 million in the first six months of 2019, the first half of 2020 will reflect a loss of CHF 27.5 million. It is currently difficult to make a forecast for the second half of the year, even if there has been an increase in air traffic in recent weeks.

Assessment of the exceptional situation
The coronavirus crisis has had a severe economic impact on the entire aviation industry and on Flughafen Zürich AG. At times, there was a near-total collapse in revenues, which is reflected in first-half business performance. In response, the airport operator very quickly introduced short-time working and took various measures to secure liquidity. There will be further substantial cuts in capital expenditure and costs over the coming months and years.

Despite air traffic coming to an almost complete standstill in the spring, Zurich Airport always remained open. Even in these challenging times, it was therefore able to fulfil its mandate to provide a basic service and maintain Switzerland's aviation links to the world so that repatriation, air freight and ambulance flights could continue to operate along with a few passenger flights.

We have seen signs of a slow recovery since the gradual reopening of borders in June. The revival of the travel sector is expected to begin in Europe initially, but it is likely to be several years before the intercontinental market fully recovers. In the meantime, a "new normal" is becoming established at Zurich Airport as far as travel behaviour and passenger processes are concerned. One key element is Zurich Airport's protection concept, which is designed to ensure the safety of all passengers, visitors and airport staff.

Trend in traffic volume
Between January and June 2020, 5.3 million passengers used Zurich Airport as their departure, transfer or destination airport, a decrease of 64.3% compared with the prior-year period. The number of local passengers dropped by 64.0% and the number of transfer passengers by 65.3%.

The number of flight movements declined by 55.5% to 60,417 take-offs and landings in the first half of 2020. Flight movements declined at a slower pace than passenger numbers due in particular to a year-on-year increase in the number of freight flights. Despite this, the volume of freight handled at Zurich Airport decreased by 36.1% compared with the first half of 2019 to 144,526 tonnes.

Trend in revenue
Total revenue slumped by almost 50% compared with the first half of 2019 to CHF 310.4 million. Revenue from aviation operations was down by 58.6% to CHF 130.4 million. Aviation revenue declined at a slower pace than passenger numbers due to the fact that not all charges depend on passenger volumes. For example, the number of flight movements determines the landing charges. Non-aviation revenue was down by 34.0% in the same period to CHF 180.0 million. In the case of commercial revenue, Flughafen Zürich AG was unable to charge rent during the lockdown period of roughly two months ordered by the authorities. While parking revenue and revenue from international business also suffered as a result of the crisis, revenue from facility management was up by 10.4% to CHF 69.1 million. This rise is due mainly to the purchase of a total of 36 buildings and plots of land from Priora Suisse AG at the end of 2019, although the first rental income from the Circle also contributed to the positive trend. The crisis shows that the increasingly important real estate business has a stabilising effect on total revenue.

Operating expenses
Operating expenses decreased by 27.7% year on year to CHF 205.5 million, although last year's cost base was negatively impacted in particular by an amount of CHF 45.1 million for the development of the infrastructure in Florianópolis. After adjusting for expenses from construction projects, operating expenses were down by 15.5% or CHF 37.0 million. The savings are mainly attributable to lower personnel expenses as a result of short-time working, lower police and security expenses and other general cost reductions.

Operating and consolidated result
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 65.5% to CHF 104.9 million. The bottom-line result for the first half of 2020 was a loss of CHF 27.5 million. In the prior-year period, Flughafen Zürich AG was able to post a profit of CHF 143.4 million.

It is difficult to issue a reliable forecast for the current financial year, owing to considerable uncertainty over the further course of the coronavirus crisis. Provided that international passenger travel picks up in the fourth quarter, passenger volumes for the 2020 financial year are expected to be around 10 million. Any developments in the other direction, such as renewed border closures, changed quarantine rules or sustained or additional travel restrictions would result in lower passenger volumes.

Flughafen Zürich AG introduced measures to reduce costs at an early stage. In the case of operating expenses, the cost base can be cut by 10-15% year on year due to short-time working and other savings (excluding expenses from construction projects). Because a large part of the costs of Flughafen Zurich AG is directly related to the infrastructure which was available also during the period of minimal operations, the expected drop in sales in the current year can only be offset by cost reductions up to a limited extent.

A loss is therefore anticipated for the current financial year.

Investments at the Zurich site will amount to around CHF 250-300 million with around CHF 20 million at the subsidiaries abroad in addition.

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