[ad_1]
Etihad Airways’ chief executive warned that rising environmental costs could pose a bigger threat to the aviation industry than temporary problems caused by the coronavirus crisis.
Tony Douglas fears sustainability issues, including higher taxes as the pressure to decarbonise increases, will hang over the industry for decades compared with the “temporary blip of the pandemic”.
“The distraction of the pandemic perhaps for some has diluted their focus on what is going to be the far bigger challenge to come,” the boss of the Abu Dhabi airline told the Financial Times.
“A regulator’s toolbox quite often has a predictable deployment of the stick . . . my honest opinion is there will probably be inevitably at some stage elements . . . of taxations.”
The aviation industry has created an emissions trading scheme that allows airlines to purchase carbon credits to offset their emission.
Environmentalists have criticized the Carbon Offsetting and Reduction Scheme International Aviation (Corsia) as ineffective and too permissive.
The EU has adopted a stricter and more expensive system for emissions trading, but this only applies within Europe.
Douglas added that he “would not be surprised” if aviation’s cargo sector, an area that has helped keep Etihad’s finances afloat during the pandemic, faced environmental surcharges in the future.
He pointed to many of the old and more polluting aircraft used to deliver cargo around the world, and said taxation could help “drive out all those older and inefficient polluters”.
Etihad, a leader in aviation sustainability, was ahead of its peers when, in 2020, it pledged net zero by 2050.
Still, Douglas cautioned that regulators should not “just reach for the stick all the time”, and said any extra environmental costs should be accompanied by support to increase production of sustainable aviation fuels.
He said that airlines should also be encouraged to fly newer, more efficient fleets.
Speaking on broader issues, he said it was too early to declare the industry had come out the other side of the disruption caused by Covid, although he felt “hugely more positive” than even six months ago.
Some of Etihad’s core markets in Asia remain largely closed off by strict travel restrictions, but Douglas said he expected more markets to follow Australia’s lead and open up this year.
“Given what is happening in Europe, the Middle East, and North America, one would perhaps assume that as we move through the summer months we are likely to get the Far East catching up,” he said.
The British executive spoke before Russia invaded Ukraine. Russia has increased airspace restrictions for airlines.
Analysts believe this could boost Gulf airlines, as it would decrease the competitive advantage of European airlines offering nonstop flights to Asia.
But Douglas said “there are always existential factors in aviation”, as he highlighted Ukraine as the latest headwind to hit the industry.
