general

Europe’s airlines are pushing back against the European Union’s upgraded climate plan, saying a planned tax on jet fuel is counterproductive as the region’s transportation sector braces for measures that will make the region the first carbon-neutral continent. Punitive measures such as taxation reduce resources that could support investments to cut emissions, the IATA said, while Lufthansa said the EU’s proposals will need additional measures to ensure a level playing field for carriers. Key to the EU’s ambitious goal is the bid to cut emissions by 55% in 2030 compared to levels in 1990, up from a previous target for a 40% reduction. A transformational overhaul that will change how people drive and fly is at the core of hitting the goals to reduce pollution from transport, a sector that accounts for as much as a quarter of total emissions. To get there, the EU is, among a broad swathe of policy measures. Aviation contributes about 4.5% of total EU emissions. Even before the pandemic brought air travel to its knees, the sector was in the crosshairs of lawmakers and the flight-shaming movement spurred on in part by Swedish climate activist Greta Thunberg. Airlines will eventually have to pay for the pollution from their planes with a gradual phasing out of emission allowances. The EU says it’s concerned that without the curbs proposed, CO2 output will continue to grow, imperiling mid-century climate targets. The proposed measures include taxation on jet fuel for intra-European flights, mandatory carbon offsets as well as requirements for a gradual increase in sustainable aviation fuel blended in with kerosene. A 2% blend will be required starting in 2025, rising to 63% in 2050. An increasing portion will be synthetically made over the period. They’ll be exempt under the EU’s new energy taxation framework.<br/>

Asian air travel may take another three years to recover fully from the devastation wrought by the pandemic, lagging behind rebounds in other regions and offering a stern headwind for refiners making jet fuel. It’ll take until 2024 for international air travel across the region to reach pre-virus levels, a year after global traffic hits that milestone, according to the IATA. Similarly, consultancy Energy Aspects says jet fuel consumption will reach pre-pandemic volumes only in 2023-2024. The drawn-out timelines highlight the difficulties facing Asia and the likely consequences for jet fuel, a traditionally prized part of the oil-products market. Low rates of vaccination in many countries, the challenge posed by the fast-spreading delta variant, and persistent lockdowns have all set back the recovery even as the US and Europe press on. All that means Asia’s aviation industry is unlikely to offer significant support to the region’s hard-pressed refineries, which process crude from the Middle East and elsewhere into fuels. Both North America and Europe have seen strong demand during the holidays, with the European Union relaxing quarantine and lockdown requirements, according to Mayur Patel, regional sales director for Japan and Asia Pacific at OAG, an aviation analytics firm. “Sadly, the same cannot be said for Asia, where the low level of vaccination rates, sudden and sharp lockdowns, and inconsistent regulations frustrate any real attempt at a recovery,” he said.<br/>

Six international flights that were designated to repatriate Australians will arrive at Sydney empty on Wednesday as the country’s arrival caps lower from 6,070 passengers a week to just 3,035. It comes as American confirmed it would be flying 20 empty aircraft from LA to Sydney over the next two months. The developments follow national cabinet’s decision earlier this month to halve the caps in a bid to reduce leakages of COVID out of hotel quarantine. New analysis for The Sydney Morning Herald, thought to be by the Board of Airline Representatives of Australia (BARA), revealed three more aircraft, carrying eight, 10 and 12 passengers each, will land on Wednesday despite a combined capacity of 750 seats.<br/>

Despite being floored by the pandemic and starved of overseas passengers, Sydney Airport this month drew a A$22.3b ($16.6b) takeover offer, a record for Australia and 42% higher than its market value at the time. It sounded too good to refuse, but with Covid muddying the waters, the airport on Thursday rejected the bid. The crisis has spat out an array of beaten-up assets from airlines and airports to casinos and other tourism-dependent businesses for investors betting on a rebound. For boards assessing these takeover approaches however, uncertainty surrounding the strength of any recovery and longer-term prospects is making it harder to distinguish between attractive offers and ones that fall short. ​Sydney Airport said the A$8.25-a-share offer from pension funds including IFM Investors was lower than the stock price before the pandemic and undervalued a “strategic and irreplaceable” asset. The airport’s shares were down 0.9% at A$7.73 at 1:43 p.m. local time. “Sydney Airport is strongly positioned to deliver growth as vaccination rates increase and we move into the post-pandemic recovery period,” it said. The airport said it would only progress a deal that recognized “appropriate long-term value.” In response, the bidding consortium said it was “surprised and disappointed.” It said any comparison with Sydney Airport’s share price before Covid-19 “is of limited relevance” given changes to the aviation market and the “challenging outlook.”<br/>