Sustainability Challenges To The Airline Sector Of The Economy

Sustainability challenges to the airline sector of the economy

Date of delivery:

05/03/2008

TABLE OF CONTENTS

SUMMARY 3

INTRODUCTION 4

1. WHAT CHALLENGES DOES AVIATION FACE IF THE GOAL IS LONG TERM SUSTAINABILITY FOR THE SECTOR? 5

1.1 ECONOMIC CHALLENGES 5

1.2 ENVIRONMENTAL CHALLENGES 8

1.2.1 The challenge of air pollution 9

1.2.2 The challenge of noise 10

1.2.3 The link between environmental and economic challenges 11

1.3 SOCIAL CHALLENGES 11

1.3.1 Principles and characteristics of Social Sustainability 11

1.3.2 Challenges to long term social sustainability 15

1.4 GOVERNANCE CHALLENGES 15

2. WHICH OF THESE CHALLENGES ARE ALSO CHALLENGES IF THE GOAL IS TO BE A RESPONSIBLE CORPORATION? 19

2.1 ECONOMIC CHALLENGES 20

2.2 ENVIRONMENTAL CHALLENGES 20

2.3 SOCIAL CHALLENGES 20

2.4 GOVERNANCE CHALLENGES 21

3. DESCRIBE THE SECTOR'S PROGRESS TOWARDS, OR (FAILURES) MOVE AWAY FROM SUSTAINABILITY OVER THE LAST 20 YEARS. 21

3.1 BACKGROUND 21

3.2 ECONOMIC SUSTAINABILITY 22

3.3 ENVIRONMENTAL SUSTAINABILITY 24

3.3.1 Progress 24

3.3.2 Shortcomings 25

3.4 SOCIAL SUSTAINABILITY 26

3.5 DEVELOPMENT IN GOVERNANCE ISSUES 27

3.5.1 Progress 27

3.5.2 Shortcomings 27

4. WHAT SHOULD AVIATION AND REGULATORY AUTHORITIES DO TO PROMOTE SUSTAINABLE DEVELOPMENT IN ITS SECTOR 28

4.1 ECONOMIC SUSTAINABILITY 28

4.2 ENVIRONMENTAL SUSTAINABILITY 28

4.2.1 Regulations 29

4.2.2 Taxation 29

4.2.3 Technology 30

4.2.4 Other ways to promote environmental sustainability 30

4.3 SOCIAL SUSTAINABILITY 30

4.4 GOVERNANCE DEVELOPMENT 31

REFERENCES 32

BOOKS 32

ARTICLES 32

INTERNET DOCUMENTS 33

APPENDICES 38

APPENDIX 1.2 38

APPENDIX 1.2 40

APPENDIX 1.3 41

APPENDIX 1.3 42

APPENDIX 1.4 42

APPENDIX 3.4 46

Summary

This paper deals with sustainability challenges to the aviation sector in the economy. Four questions are addressed and simultaneously make up the structure of the document.

In section 1 we discuss what challenges (to business and regulatory authorities) aviation is faced with if the goal is long term sustainability. Sustainable development consists of three factors (economic, environmental and social) in addition to a governance point of view. This is the basis of our dissection of the 1st section - where each factor is discussed with a linkage to aviation.

The 2nd section reviews those of the first section's challenges which also represent challenges if the goal is to be a responsible corporation. An important distinction is here done between sustainability and responsibility.

Describing aviation's progress towards - or move away from - sustainability over the last 20 years since the Brundtland Commission's launch of "Our common future", make up the 3rd section. UN milestones after this report are, in short, went through in the Appendices. Important principles, introduced during these 20 years, are included in the main text (examples from aviation are given at the same time). The majority of our response is however focused on each factor (clarified in section 1) of sustainable development and the positive or negative direction of the evolution of these.

The discussed issues culminate in a 4th section where we launch some opinions as to what aviation should or could do in order to promote sustainable development.

Introduction

Transportation by air has experienced a rapid expansion since the World War 2. Traffic growth became a result of declining operating costs and fares per unit of traffic (measured in passenger-kilometres). In 1945, 9 million passengers took to domestic or international air transportation. Today - at the end of 2005 - we find ourselves light years away from this level, as 704 million passengers choose to travel by air. On average, this tremendous enlargement of air passenger traffic has had an annually growth on ca 10 per cent in the 60 years that have passed. Comparatively, the growth in gross domestic product (GDP, the broadest available measure of world output) has been at an average of 3, 8% annually in the same period.

(Source: ICAO 2001)

When looking ahead, forecasts show a 5 - 5,5 % growth in world air traffic up till 2007 and then 4,3 - 4,9 % growth till 2017. GDP is expected to have an average annual growth around 2,5 - 3 % over the next ten years.

(Source: IMF 2006)

The west-east longitudinal belt is the main pathway of air transportation, that is, the routes between Europe - Middle-East - South-East Asia - Japan - USA - Europe. This is where the largest markets lie (measured in the volume of scheduled traffic generated), and therefore is the focal point of