IATA calls for joint efforts to tackle fuel issues

“Air transport needs fuel that is safe, used in an environmentally responsible manner, with a reliable supply and at reasonable cost,” said IATA director-general and CEO Tony Tyler in an address to the IATA Fuel Forum, taking place in Paris.
Suggestions were announced last week, in light of persistently high fuel prices. In 2011, the industry’s fuel bill is expected to be US$176 billion (Bt5.5 trillion) – which is 30 per cent of operating cost – based on oil at $110 per barrel. In 2012, the fuel bill is expected to reach $201 billion (32 per cent of operating cost) based on an average oil price $100 per barrel. Overall industry profitability is expected to decline from $6.9 billion (1.2 per cent net margin) in 2011 to $4.9 billion (0.8 per cent net margin) in 2012.
Tyler noted the creation of a manual of global standards for fuel supply, storage and provision as an example of what can be achieved when stakeholders work together. “Safety always comes first. Recent incidents involving fuel contamination show the need for systems and processes that keep the fuel supply safe. Working together with the International Civil Aviation Organisation and the Air Transport Association, we are producing the first manual of global standards for fuel supply, storage and provision through the ICAO processes. This is a true innovation in how we manage fuel with standards, best practices and procedures to safeguard quality throughout the fuel supply chain – from the refinery to when it is delivered into the aircraft,” said Tyler.
On the environment side, airlines are responsible for 2 per cent of global man-made CO2 emissions. Aviation must be sustainable, he said, adding “sustainability is our licence to grow and provide the connectivity that has turned our planet into a global community. We have embraced this with commitments to improve fuel efficiency by 1.5 per cent annually to 2020, cap net emissions from 2020 and cut net emissions in half by 2050 compared to 2005 levels.
“Sustainable biofuels are safe, approved and airlines are using them for commercial flights. With the potential to cut aviation’s carbon footprint by up to 80 per cent over the lifecycle of the fuel, sustainable biofuels have the potential to be a game changer. But they are still expensive and supply is limited. In other words, we need to commercialise them,” said Tyler.
To promote successful commercialisation of sustainable biofuels, governments are urged to:
- foster research into new feedstock sources and refining processes;
- de-risk public and private investments in aviation biofuels;
- provide incentives for airlines to use biofuels from an early stage;
- encourage stakeholders to commit to robust international sustainability criteria;
- make the most of local green growth opportunities;
- encourage coalitions encompassing all parts of the supply chain.

“Such policies would help increase volumes and drive down costs – exactly what is needed to move forward. And at this time of global uncertainty, it makes sense for governments to invest in sustainable biofuels that will increase energy self-sufficiency and create jobs in the green economy,” he noted.
On commercial issues, Tyler called on governments to re-think taxation and pricing policies that inflate jet-fuel costs in light of aviation’s significant economic and social benefits. Alongside reminding governments to abide by Chicago Convention commitments not to tax international jet fuel, Tyler called on governments to ensure competitive fuel-supply environments at airports and to rethink fuel-pricing policies with the aim of supporting aviation’s competitiveness as a strategic component of national economies.