By James Rickman, SVS Aviation industry intends to consolidate and move towards clean energy reports Copenhagen Climate Change Summit. Worldwide new reports from the International Air Transport Association (IATA) show the U.S. combined airlines losing $5.6 billion, 2010. Even with economic recovery increasing passenger and cargo demand. The report outlines the $11 billion loses of 2009, with more to come much of it due to pressure from higher crude oil prices expected to reach over $75 per barrel rising aviation fuel costs for 2010.
The IATA, encompassing about 230 members including Cathay Pacific (HKSE:0293.HK - News), Lufthansa (XETRA:LHAG.DE - News), United Airlines (NasdaqGS:UAUA - News) and Emirates (EMIRA.UL), reports more travelers were choosing to travel by air and businesses were increasingly sending freight by air to meet renewed consumer demand around the world. IATA’s 230 member airlines comprise 93% of scheduled international traffic.
The International Air Transport Association (IATA) brought the aviation industry’s environmental goals to the Copenhagen Climate Change Summit. Airlines, airports, air navigation service providers and manufacturers are calling for a global approach to reducing aviation emissions and are united in a commitment: to improve fuel efficiency by an average of 1.5% per year to 2020; to stabilize carbon emissions from 2020 with carbon-neutral growth; and to a net reduction in carbon emissions of 50% by 2050 compared to 2005. http://www.iata.org/pressroom/pr/2009-12-08-01.htm
Likewise cargo demand is rising faster than world trade as depleted inventories are rebuilt. IATA had previously said the global airline industry would lose $3.8 billion next year in tandem with a broad economic recovery. In its new forecast, it reports European carriers were set to generate the biggest losses of any region, at $2.5 billion, while Asian-Pacific carriers would fare best with losses of $700 million. North American airlines would see their losses shrink to $2 billion, with Latin American carriers the only profitable regional grouping, it found.
Still, regions such as ASIA shows signs of strength for the aviation industry with China leading the way according to Boeing research studies that present data of the top three Chinese carriers including Air China, China-Eastern Airlines, and China Southern Airlines. Combined they lost $4 billion, 2008.
Boeing internal market research shows a requirement forecasts that the Asia Pacific region will rank as the world's largest aviation market over the next 20 years, requiring 8,960 new commercial jets valued at approximately $1.1 trillion. Asia Pacific is the largest market in the forecast for new airplanes in terms of both units required and market value.China is set to remain the largest market outside the United States for new commercial airplanes over the next 20 years. http://boeing.mediaroom.com/index.php?s=43&item=827
Global aviation manufacturers such as Boeing (USA), Airbus (EU), Bombardier Aerospace (Canada), Lockheed Martin (USA), China’s X’ian Aircraft Industry Group and Austrian aviation supplier FACC AG, among others are poised to lead the way in manufacturing and technology for this global growth sector.
The forecast highlights include: http://www.iata.org/index.htm
Revenues: Industry revenues are expected to rise by US$22 billion (4.9%) to US$478 billion in 2010, compared to 2009.
Passenger Demand: Following a decline of 4.1% in 2009, passenger traffic is expected to grow by 4.5% in 2010. A total of 2.28 billion people are expected to fly in 2010, bringing total passenger numbers back in line with the peak recorded in 2007.
Cargo Demand: Cargo demand is expected to grow by 7% to 37.7 million tons in 2010, following a 13% decline in 2009. Total freight volumes will remain 10% below the 41.8 million ton peak recorded in 2007.
Fuel: An average oil price of US$75.0 per barrel (Brent) is expected in 2010, up considerably from the US$61.8 average expected for 2009. As a percentage of operating costs, fuel will be 26% in 2010. This is considerably lower than the 32% of operating costs that fuel comprised in 2008, but twice the 13% of operating costs that fuel represented in 2001-2002.
After almost a decade of cost cutting, non-fuel unit cost reductions will be incremental at best. And the risk of rising fuel costs will be constant. There will be some individual airline success stories. But without relaying the foundations of the industry to facilitate structural change, covering the cost of capital for this hyper-fragmented industry will remain a dream at best.
In November 2009, seven countries (Chile, Malaysia, Panama, Singapore, Switzerland, the UAE and the US) signed a multilateral Statement of Policy Principles that was also endorsed by the European Commission. These principles represent a commitment by the signatories to modernize the industry and make cross border consolidation possible. They are premised on a level playing field which is a responsibility of governments.
Consolidation is the great hope for the industry. The round of consolidation experienced since this horrible decade began is a step in the right direction. But it has been confined within political borders as a result of ownership restrictions in the archaic bilateral system. The industry cannot afford the mounting losses of the status quo. The next decade must facilitate consolidation.
Already, we find Exxon Mobil investing $600 million in new developing aviation fuels like algae. Other energy companies like Chevron also investing millions in algae biofuel aviation mixtures with promising startups like PetroSun, OriginOil, PetroAlgea and others supported by government renewable energy stimulus monies and corporate seed capital.
Still, Boeing leads a group of Sustainable Aviation Fuel Users involving biofuel commercial development involving Jatropha include JatrophaBioJet ,Moterey California, Australian Pacific Airports Corporation, Air New Zealand, UOP LLC a Honeywell company (HON), Terasol Energy, Sapphire Energy, Cyanotech (CYAN) just reported 23% increase in revenues Q4 2009, Abengoa Bioenergy S.A and Boeing (BA) all jointly developing and successfully testing additives using Jatropha as a key ingredient for renewable aviation biofuel. http://www.boeing.com/aboutus/environment/environmental_report_09/alternative-energy-solutions.html
Other airlines involved in the advanced blending of “Jet A” fuels containing camelina oil, Jatrohpa, and algae include Air France, Nippon Airways (ANA), Cargolux, Gulf Air, Japan Airlines, KLM, SAS and Virgin Atlantic Airways. Combined, they account for over 18% of worldwide commercial jet fuel usage.
Notable South American players aggressively pursuing the development of Jatropha include SG Biofuels, Abundant Biofuels Corporation, Jatropha Sustainable Biofuels Alliance, Bharat Renewal Energy Limited India, Argentine Ministry of Agriculture, Biogreen Oil and Biocombustibles de Guatemala.
Additionally, the Indo-ASIA regions including Indonesian’s cultivation should reach to 11 mln acres by 2015, with India increasing cultivation to 4.4 mln acres. The majority of the Jatropha cultivation about 80% worldwide is developing in Asia regions.
The Obama administration has firmly planted it stake investing in clean energy while companies such as Exxon Mobil announced their $31 billion deal to buy clean energy natural gas producer XTO Energy, among other sector acquisitions to come over the next ten months. China appears leading the way in wind and PV solar manufacturing at competitive low costs investing billions.
Today, global production of biodiesel has reached $ 35 billion. Worldwide biodiesel production hovers at 2.5 billion gallons. The worldwide biodiesel market is on track to reach $110 Billion by 2016. Combined the global renewable energy sector including biofuel, PV solar cells and wind turbine revenues will triple reaching $335 Billion by 2018.
About Author
Mr. Rickman is a respected analyst, innovative expert in business content and web development services with over 30-years experience, published worldwide. He is also the author of several books including Eight Billion People. Mr. Rickman holds advanced business and technical degrees from Boston University. For more information visit : http://www.sustainablevirtualbiz.com/ or call (503) 621-4953.
The IATA, encompassing about 230 members including Cathay Pacific (HKSE:0293.HK - News), Lufthansa (XETRA:LHAG.DE - News), United Airlines (NasdaqGS:UAUA - News) and Emirates (EMIRA.UL), reports more travelers were choosing to travel by air and businesses were increasingly sending freight by air to meet renewed consumer demand around the world. IATA’s 230 member airlines comprise 93% of scheduled international traffic.
The International Air Transport Association (IATA) brought the aviation industry’s environmental goals to the Copenhagen Climate Change Summit. Airlines, airports, air navigation service providers and manufacturers are calling for a global approach to reducing aviation emissions and are united in a commitment: to improve fuel efficiency by an average of 1.5% per year to 2020; to stabilize carbon emissions from 2020 with carbon-neutral growth; and to a net reduction in carbon emissions of 50% by 2050 compared to 2005. http://www.iata.org/pressroom/pr/2009-12-08-01.htm
Likewise cargo demand is rising faster than world trade as depleted inventories are rebuilt. IATA had previously said the global airline industry would lose $3.8 billion next year in tandem with a broad economic recovery. In its new forecast, it reports European carriers were set to generate the biggest losses of any region, at $2.5 billion, while Asian-Pacific carriers would fare best with losses of $700 million. North American airlines would see their losses shrink to $2 billion, with Latin American carriers the only profitable regional grouping, it found.
Still, regions such as ASIA shows signs of strength for the aviation industry with China leading the way according to Boeing research studies that present data of the top three Chinese carriers including Air China, China-Eastern Airlines, and China Southern Airlines. Combined they lost $4 billion, 2008.
Boeing internal market research shows a requirement forecasts that the Asia Pacific region will rank as the world's largest aviation market over the next 20 years, requiring 8,960 new commercial jets valued at approximately $1.1 trillion. Asia Pacific is the largest market in the forecast for new airplanes in terms of both units required and market value.China is set to remain the largest market outside the United States for new commercial airplanes over the next 20 years. http://boeing.mediaroom.com/index.php?s=43&item=827
Global aviation manufacturers such as Boeing (USA), Airbus (EU), Bombardier Aerospace (Canada), Lockheed Martin (USA), China’s X’ian Aircraft Industry Group and Austrian aviation supplier FACC AG, among others are poised to lead the way in manufacturing and technology for this global growth sector.
The forecast highlights include: http://www.iata.org/index.htm
Revenues: Industry revenues are expected to rise by US$22 billion (4.9%) to US$478 billion in 2010, compared to 2009.
Passenger Demand: Following a decline of 4.1% in 2009, passenger traffic is expected to grow by 4.5% in 2010. A total of 2.28 billion people are expected to fly in 2010, bringing total passenger numbers back in line with the peak recorded in 2007.
Cargo Demand: Cargo demand is expected to grow by 7% to 37.7 million tons in 2010, following a 13% decline in 2009. Total freight volumes will remain 10% below the 41.8 million ton peak recorded in 2007.
Fuel: An average oil price of US$75.0 per barrel (Brent) is expected in 2010, up considerably from the US$61.8 average expected for 2009. As a percentage of operating costs, fuel will be 26% in 2010. This is considerably lower than the 32% of operating costs that fuel comprised in 2008, but twice the 13% of operating costs that fuel represented in 2001-2002.
After almost a decade of cost cutting, non-fuel unit cost reductions will be incremental at best. And the risk of rising fuel costs will be constant. There will be some individual airline success stories. But without relaying the foundations of the industry to facilitate structural change, covering the cost of capital for this hyper-fragmented industry will remain a dream at best.
In November 2009, seven countries (Chile, Malaysia, Panama, Singapore, Switzerland, the UAE and the US) signed a multilateral Statement of Policy Principles that was also endorsed by the European Commission. These principles represent a commitment by the signatories to modernize the industry and make cross border consolidation possible. They are premised on a level playing field which is a responsibility of governments.
Consolidation is the great hope for the industry. The round of consolidation experienced since this horrible decade began is a step in the right direction. But it has been confined within political borders as a result of ownership restrictions in the archaic bilateral system. The industry cannot afford the mounting losses of the status quo. The next decade must facilitate consolidation.
Already, we find Exxon Mobil investing $600 million in new developing aviation fuels like algae. Other energy companies like Chevron also investing millions in algae biofuel aviation mixtures with promising startups like PetroSun, OriginOil, PetroAlgea and others supported by government renewable energy stimulus monies and corporate seed capital.
Still, Boeing leads a group of Sustainable Aviation Fuel Users involving biofuel commercial development involving Jatropha include JatrophaBioJet ,Moterey California, Australian Pacific Airports Corporation, Air New Zealand, UOP LLC a Honeywell company (HON), Terasol Energy, Sapphire Energy, Cyanotech (CYAN) just reported 23% increase in revenues Q4 2009, Abengoa Bioenergy S.A and Boeing (BA) all jointly developing and successfully testing additives using Jatropha as a key ingredient for renewable aviation biofuel. http://www.boeing.com/aboutus/environment/environmental_report_09/alternative-energy-solutions.html
Other airlines involved in the advanced blending of “Jet A” fuels containing camelina oil, Jatrohpa, and algae include Air France, Nippon Airways (ANA), Cargolux, Gulf Air, Japan Airlines, KLM, SAS and Virgin Atlantic Airways. Combined, they account for over 18% of worldwide commercial jet fuel usage.
Notable South American players aggressively pursuing the development of Jatropha include SG Biofuels, Abundant Biofuels Corporation, Jatropha Sustainable Biofuels Alliance, Bharat Renewal Energy Limited India, Argentine Ministry of Agriculture, Biogreen Oil and Biocombustibles de Guatemala.
Additionally, the Indo-ASIA regions including Indonesian’s cultivation should reach to 11 mln acres by 2015, with India increasing cultivation to 4.4 mln acres. The majority of the Jatropha cultivation about 80% worldwide is developing in Asia regions.
The Obama administration has firmly planted it stake investing in clean energy while companies such as Exxon Mobil announced their $31 billion deal to buy clean energy natural gas producer XTO Energy, among other sector acquisitions to come over the next ten months. China appears leading the way in wind and PV solar manufacturing at competitive low costs investing billions.
Today, global production of biodiesel has reached $ 35 billion. Worldwide biodiesel production hovers at 2.5 billion gallons. The worldwide biodiesel market is on track to reach $110 Billion by 2016. Combined the global renewable energy sector including biofuel, PV solar cells and wind turbine revenues will triple reaching $335 Billion by 2018.
About Author
Mr. Rickman is a respected analyst, innovative expert in business content and web development services with over 30-years experience, published worldwide. He is also the author of several books including Eight Billion People. Mr. Rickman holds advanced business and technical degrees from Boston University. For more information visit : http://www.sustainablevirtualbiz.com/ or call (503) 621-4953.
