IBA has published its latest aviation Carbon Index in partnership with KPMG. Our latest analysis for August 2022 includes a spotlight on the most efficient airlines globally by region.
Aviation carbon emissions intelligence from IBA NetZero has revealed that CO2 emissions from commercial aviation averaged 141.9 grams of CO2 per-seat-per mile in August 2022, and that overall carbon intensity per-seat remained unchanged compared to July. This represents a 1.2% reduction in CO2 intensity per-seat per-mile year-on-year, maintaining record lows for the industry.
Whilst August presented little change month-on-month, year-on-year increases are more noteworthy, with an increase of almost 30% in flights compared to August 2021. This is only 17% below pre-pandemic levels in August 2019.
Air Canada issued its first TCFD report on August 17, reaffirming the flag carrier's strong focus on reaching Net-Zero by 2050 through acceleration of SAF production in Canada, Carbon Offsets and fleet and operational improvements. Similarly, Cebu Pacific reaffirmed its sustainability commitments and announced the introduction of SAF, a plan for an ‘all neo' fleet, and resource optimisation. Elsewhere, Neste and Hellenic entered agreements to begin SAF production for Aegean Airlines in Greece, with Neste planning to increase its SAF production to 1.5 million tons by the end of 2023.
On a wider note, Google modified its approach to carbon emissions reporting in August, now excluding CO2 equivalents due to ‘lack of accuracy'. This has almost halved projected global warming impact figures.
Commenting on developments, Chris Brown, Partner and Head of Strategy in Ireland, KPMG says:
“With the new rise in jet fuel price, airlines are again under pressure as they head into the low season; this pressure is further increased with demands on airlines to reduce the CO2 emissions and the cost of SAF. We are not surprised by Airbus's announcement about a partnership between airlines and airline groups. This partnership will comprise more than a dozen worldwide carriers working together on a new carbon capture project, intending to provide secure, verifiable carbon removal credits as part of aviation's need to offset part of its future emissions.
As airlines are struggling with the fluctuations in fuel, demand, and the rising cost of carbon, we see this as a necessary step airlines need to take to control costs in the long term. Notably, Covid-19 has given some new airlines, such as Norse Atlantic, access to the latest technology and more fuel-efficient aircraft.
Our strategy has extensively modelled decarbonisation options for aviation and still leaves the sector with a 30-40% shortfall to 2050 net-zero. That will translate into a lot of offsets – arguably more than there currently is in terms of the total global supply of quality nature-based sequestration initiatives. DACC, therefore, takes on real significance to the sector”.
The aircraft type with the largest share of global emissions is driven by utilisation trends and fleet size. August 2022 saw little change in these trends, and, as such, our aircraft efficiency ranking shows little movement in August 2022. Whilst the Boeing 737-800 retains its position with the highest emissions share, it is important to highlight that it saw a monthly decrease of 0.3% in total emissions share, whereas the 777-300ER has seen an increase of 0.4%, the largest increase amongst the most popular aircraft types. It can also be noted that the general trend of a decrease in proportional emissions for these popular types continues, primarily driven by the increase in use of the A321-200NX and 737 MAX 8. The largest operators of the A321-200NX by emissions share are IndiGo and American Airlines, with 13.4% and 13.2% of global emissions respectively. Amongst A321-200NX high emitter operators, Wizz Air has seen the largest surge month-on-month with a 13.7% increase in carbon emissions. This will only accelerate with an order book standing at 248 in August 2022.
Southwest Airlines has the highest number of 737 MAX 8 aircraft globally, operating 90 examples in August 2022. This represents a 7% increase compared to July, and 13% of global supply. Total CO2 emissions from this aircraft type at Southwest increased 5% month-on-month. Further north, Air Canada saw a 7% increase in emissions from the MAX 8. This trend is likely to grow, with Southwest having ordered a further 250 aircraft as of August 2022 (representing just under 10% of total 737 MAX 8 orders).
Whilst Wizz Air Abu Dhabi achieved the lowest CO2 emissions per-seat per-mile in August, both Lynx Air (last month's new addition) and French Bee (last month's top performer) maintain their presence in our top 5. Neos and Scoot exited the ranking this month and were replaced by two airlines that were established in 2021. The first, World 2 Fly (Spain) operates 2 A350-900 aircraft. These have an average age of 0.9 years and feature a high seating density, with 432 seats against the more typical 283 seats. World 2 Fly Spain mostly operates sectors from Spain to Mexico and the Caribbean. Re-joining our ranking this month, Norse Atlantic Airways utilises 6 Boeing 787-9 aircraft, which are on average 4.0 years old. These contain 344 seats. Norse Atlantic Airways operates low-cost long-haul services between northern Europe and the United States. Average sector lengths for both operators exceed 3000 nautical miles. This, combined with high seat density and new generation aircraft combine to produce a strong performance on a per-seat per-mile basis.
There was little change in the balance of CO2 emissions from lessors in August 2022, with a 0.2% decrease observed from 127.7 to 127.5 grams of CO2 per-seat per-mile. Jackson Square Aviation remains at the top of our lessor efficiency index in August, as it has consistently done in recent months. Of the top 10 lessors, AerCap still dwarves the others, with its relative emissions to the overall industry north of 6% and the next largest emitter being Air Lease Corporation at less than 2% of overall emissions.
The proportion of emissions from the top 10 lessors to the industry has also decreased since the start of 2022 to August, from approximately 19.3% to 16.6%. This in interesting as both the industry average and the top 10 lessors have had an approximate 1% decrease in CO2 per-seat per-mile, suggesting the largest lessors are becoming more efficient than the industry average on a sector length basis, or that a broader diversity of lessors is emerging. Indeed, the lessor industry has seen an increase by around 30% in total emissions year-to-date, suggesting a larger portion of lessor owned aircraft operating in the market. Overall CO2 emissions per-seat and per-mile are likely to fluctuate marginally month-on-month for each lessor. This is largely driven by utilisation characteristics, unless major new deliveries and fleet exits occur.
IBA NetZero reveals that Sunwing was the most efficient airline per-seat per-mile in North America in August 2022. They operate 6 x 737 MAX 8 and 5 x 737-800 with an average age of 3.2 and 10.8 years respectively. Both have 189 seats, versus a more typical 162. 60% of Sunwing's emissions in August can be attributed to the new generation Boeing 737 MAX 8 aircraft. Sunwing Airlines mainly operates sectors on the east coast, from South East Canada to the Gulf of Mexico and the Caribbean. Their average sector length was 1380 Nautical miles.
In Africa, Air Seychelles tops our ranking. They operated just 2 x Airbus A320neo aircraft in August, which were 2.9 years old according to fleet data from IBA Insight. These aircraft have 168 seats, actually lower than the more typical 189 seat configuration. Whilst this should be a disadvantage when measuring emissions per-seat, it is countered by the operator's near-ideal sector length of 1843 nautical miles. This is close to the ideal efficient region for narrowbody fuel burn, and higher than most other African operators.
Hong Kong Express Airways tops our efficiency ranking in the APAC region in August, producing 100.98 grams of CO2 per-seat per-mile. The operator's fleet consists of 26 aircraft, including 5 x A320-200, 10 x A320-200neos and 11 x A321-200 with average ages of 10.4 years, 3.7 years and 4.9 years respectively. Only the Airbus A320neo fleet were operated in August. This has been the driving force in placing Hong Kong Express at the top of our ranking. Despite having shorter sectors and a fairly typical seating configuration, their exclusive use of new generation aircraft in this period produced the lowest figure.
In the Europe & CIS region, French Bee was the most efficient airline based on CO2 emissions per-seat per-mile. French Bee appears regularly in our rankings, and was the most efficient global airline in our July 2022 index. They exclusively operate young, new generation Airbus widebodies of the A350 family. The seating density of the French Bee fleet is also notably above average, with the A350-900's at 411 seats and the A350-1000 at 480 seats (versus the more typical 283 and 366 respectively). They operated sectors from from Paris to La Reunion, New York and the west coast of the United States, with an average sector length of 4470 Nautical Miles (the longest of our top 5 by a clear margin). French Bee has all the driving factors to be the relative lowest emitter per seat per mile in Europes & CIS, with its dense seat configuration, sole use of wide-bodies coupled with long average sector length and young fleet.
In Latin America, the most efficient airline in August was Arajet, an ultra low-cost start up. They operate 5 x Boeing 737 MAX 8 aircraft with an average age of 0.4 years. The seating capacity of these narrow-bodies are above their typical capacity, at 185 seats versus the more typical 162. In August, they operated 2 flights from the Dominican Republic to Bogota and Guatemala, and are anticipated to ramp up activity in September 2022. Arajet's average sector length was 1042 Nautical Miles, the longest of the top 5 with the exception of Air Caraibes, which solely operates widebodies. Whilst Arajet was the lowest relative emitter per seat per mile in Latin America in August 2022, this is largely due to its brand new fleet with high seat density and low number of flights. IBA will monitor any changes in their performance as activity increases.
In the Middle East region, the most efficient airline on a CO2 per-mile basis in August was Wizz Air Abu Dhabi. They operate 5 aircraft including, 4 x A321-200neo and 1 x A320-200, with average ages of 1.9 years and 17.2 years respectively. In August, more than 85% of their emissions can be attributed to the A321-200neo fleet. The seating layout of the A321-200neo's is quite dense, with their capacity of 239 seats versus a more typical capacity of 194. Their older A320-200 aircraft has 180 seats, just above the more typical 178. They operated from Abu Dhabi to Egypt, the Balkans and the south Caucasian region (Armenia, Azerbaijan and Georgia). Wizz Air Abu Dhabi's average sector length was 1070 Nautical Miles, which is fairly average amongst the top 5, all of which only operated narrowbodies in August.
IBA NetZero is the most advanced finance-focused carbon modelling tool currently available; we're leading the way. It's powered by IBA's proprietary fuel-burn intelligence which, when integrated with the Flights and Fleets module, can illustrate carbon emissions by any combination of: time period, airline, lessor, aircraft MSN and model, fleet, future portfolios, OEM, country, airport and route pair.
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