Airlines Face Steep Revenue Loss, May See Tougher Carbon Targets Due to Coronavirus Crisis

Apart from massive revenue losses due to cancelled air tickets, international airlines might face an additional challenge in the wake of the coronavirus crisis: because of the way the industry’s half-hearted carbon reduction plan is designed, declining demand in 2020 may force companies to push for deeper emission cuts in future years.

So far, the International Air Transport Association (IATA) is projecting losses of US$63 to $113 billion, and the pandemic has hit airline stocks hard, ClimateHome News reports. But the secondary impact could flow through the carbon offset plan, adopted in 2016 after years of delay and procrastination, that will be “the primary tool to curb the sector’s emissions, with alternative fuels and energy efficiency technologies not developed at scale.”

Under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), countries agreed through the International Civil Aviation Organization (ICAO) to make all growth in international flights after 2020 carbon neutral, using average travel volumes for 2019 and 2020 as a baseline. At the rate air traffic volumes have been rising year by year, 2020 should have pulled that baseline higher, giving airlines an easier target beginning in 2021.

“But with thousands of flights grounded because of the coronavirus, emissions from aviation are anticipated to fall this year, reducing average emissions over the two years,” ClimateHome writes. “If traffic rebounds in coming years, growth from the baseline will be bigger than previously expected, forcing airlines to do more to offset emissions than they would if flights in 2020 were unaffected by coronavirus.”

“Emissions can rebound next year from the coronavirus situation,” in which case “airlines could have more [emissions growth] to offset”, aviation specialist Annie Petsonk of the U.S. Environmental Defense Fund told ClimateHome. On the other hand, “the coronavirus paired with concerns about climate change could mean that people will act more carefully about getting to places in the future.”

But ICAO projects aviation emissions growing 300% through 2050 (during the 2015 Paris conference, that estimate was 270%), and Petsonk said the UN agency—which has been criticized elsewhere for its “spectacularly ill-judged” and “self-defeating” practices—could face pressure to ease the emission reduction rules under CORSIA. “This would be a dangerous mistake because it might trigger a reconvening of the 190+ member countries of ICAO’s Assembly to renegotiate the hard-fought 2016 resolution,” she said in a statement.

Before even factoring in the impact of the coronavirus, the 36-member ICAO council was to meet this week to decide which of 14 possible carbon offset schemes airlines will be allowed to use during the first three years of voluntary emission reductions, beginning next year. “The decision is key to the integrity of the CORSIA scheme in delivering real emissions reductions, since it will impact the quality and quantity of offsets that airlines will be able to buy to cancel out the growth of their emissions,” ClimateHome says. If ICAO decides to include carry-over credits under the Kyoto Protocol’s Clean Development Mechanism (CDM), observers and campaigners warn the market will be flooded “with billions of cheap credits that have not actually achieved emissions cuts,” writes reporter Chloé Farand.

Ahead of a meeting that was to be closed to media, the International Coalition for Sustainable Aviation warned ICAO its decisions and “the transparency with which you make these, puts the credibility of aviation’s climate efforts in the global spotlight”.

In the shorter term, the European Commission is stepping up to ban “ghost flights” that have continued to operate during the coronavirus crisis, emitting thousands of kilograms of emissions for a single flight from London to Rome even though far fewer passengers are onboard.

“According to a decades-old policy, airlines that want to run flights out of major, busy airports have to bid on particular arrival and departure times,” Grist explains. “There’s just one problem—according to guidelines set by the International Air Transport Association, airlines are required to use their time slots at least 80% of the time. If not, they risk losing a slot that in some cases cost them tens of millions of dollars.”

Which means that “in Europe, as consumers increasingly opt not to travel, airlines have been operating vacant ‘ghost flights’ in and out of major airports to hold onto their spots—needlessly burning thousands of gallons of fuel along the way.” Last week, the president of the European Commission promised to temporarily suspend the slot regulation across the 27-member bloc, and Grist says Latin America and the Caribbean may soon adopt a similar policy.