With cautious optimism, the Australian aviation industry enters 2022. The COVID-19 pandemic has taken a noticeable social and economic toll after two years of public restrictions and border bans. While there have been no guarantees during the epidemic, there is optimism that this year will see a steady recovery, aided by the apparent shift away from broad lockdowns and the full reopening of Australia’s international border in late February 2022.
In our “Aviation – Covid Recovery” essay series, Clyde & Co’s Australian aviation team examines some of the important concerns and trends in the local market as the industry embarks on this recovery road. The first piece examines the growing pressure on the aviation industry to reduce environmental consequences as well as how policy is currently being implemented in Australia.
The next three articles examine the domestic airline industry’s recovery route, aviation claim trends, and Australia’s continuous development of space capabilities.
The aviation sector has been greatly influenced by COVID. According to the International Civil Aviation Organization (ICAO), passenger numbers decreased by 60% in 2020 and 49% in 2021 and are predicted to decrease by another 26–31% in 2022.
With the enormous disruption to global aviation, the industry’s contribution to CO2 emissions has been scrutinized more closely. The impact of aviation on the environment is well-known, and as the industry recovers, policymakers are under pressure to encourage a return to more environmentally friendly operations. Governments’ willingness to invest considerably in financial aid for airlines during the pandemic has added to the burden. For example, there have been suggestions for bailouts to be conditional on airlines’ achieving net-zero emissions by 2050.
Some states and regions have lately enacted national and regional policies to mitigate aviation’s environmental impact.
The United States published its Aviation Climate Action Strategy in November 2021, outlining its plan to attain net zero emissions from the aviation sector by 2050. Increased production of sustainable aviation fuel (SAF), improved aircraft and engine design to reduce fuel consumption, and improved operational efficiency in flight and on the ground are all part of the plan.
This was followed by the EU’s announcement in June 2021 of a slew of climate change proposals aimed at assisting the EU’s goal of carbon neutrality by 2050, which included lifting tax exemptions on fossil fuels for intra-EU flights and requiring airlines to use part of the Special Action Force.
The impact of COVID on Australia’s aviation industry has been longer-lasting and more severe than the global average, with international passenger numbers falling by 61 percent in 2020 and by a massive 97.5 percent in 2021. The regular closure of national borders on a regular basis dealt an especially harsh blow to aviation.
Despite, or perhaps because of, COVID’s bringing aviation almost to a standstill in the country, there has been little national discussion on the industry’s environmental impact. Whereas globally, discussion centred on how many million tonnes of emissions were saved from being released as a result of aircraft being grounded, domestically in Australia, the focus has been more on getting aircraft back in the sky.
In contrast to the United States and Europe, Australia has yet to create a national plan to minimize aviation’s carbon footprint. Although Australia participates in the ICAO’s CORSIA carbon-offsetting scheme, its overall strategy to reduce aviation emissions is conservative.
