The CE of Etihad Airways has warned that rising environmental costs could be a far bigger challenge to the aviation industry than the temporary problems created 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 introduced an emissions trading scheme, which allows airlines to buy carbon credits to offset their emissions. But the Carbon Offsetting and Reduction Scheme for International Aviation, or Corsia, has been widely criticised as ineffective and overly lenient by environmentalists. The EU has adopted a tougher, and more expensive, emissions trading system, but this only applies to flights inside 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, which styles itself as an aviation sustainability leader, was ahead of many of its peers when in 2020 it pledged to reach 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 added that airlines should also be incentivised to fly newer and more efficient fleets.<br/>