Coronavirus Crisis to Reduce Carbon Emissions from Europe's Airlines Temporarily

Strategic Insights -

The coronavirus pandemic is having a unique impact on the carbon emissions output of Europe's airlines. While it will reduce overall emissions, it will also delay the introduction of new, more efficient aircraft, leading to weaker unit CO2 performance. This is according to an analysis from HSBC, which notes that the pandemic is prompting the retirement of old, less-efficient aircraft. However, reduced capital expenditure is likely to delay the retirement of middle-aged aircraft, raising unit levels of CO2.

Key Takeaways:

  • The coronavirus pandemic will reduce overall carbon emissions from Europe's airlines due to the retirement of old, less-efficient aircraft such as the Airbus A340s and A380s and Boeing 747s.
  • The pandemic will lead to slower improvement in unit emissions due to reduced capital expenditure on new aircraft, with HSBC expecting unit emissions to be 10-12% lower than previously envisaged.
  • The three largest airline groups in Europe, IAG, Air France-KLM and Lufthansa, are likely to cut premium seat share in response to reduced corporate travel, which could improve per-unit emissions.
  • EasyJet currently has the highest CO2 emissions per available seat-kilometre (ASK) at 95.9g, while Wizz Air has the lowest at 73.1g due to its larger A321s.
  • Wizz Air's CO2 emissions per ASK will reduce from 73.1g to 69.4g by 2023, while Ryanair's will decrease from 81.4g to 78.9g.
  • EasyJet's CO2 emissions per ASK will decline to 80.8g by 2023, although without the pandemic it would have fallen to 79.3g.

Statistics:

  • HSBC expects IAG's 2023 emissions per available seat-kilometre to be 86.6g of CO2, against a pre-Covid-19 estimate of 85.2.
  • EasyJet's CO2 emissions per ASK will decline from 82.9g to 80.8g by 2023.
  • Wizz Air's CO2 emissions per ASK will reduce from 73.1g to 69.4g by 2023.
  • Ryanair's CO2 emissions per ASK will decrease from 81.4g to 78.9g by 2023.
  • Overall, HSBC expects ASKs to be 10-12% lower than previously envisaged due to the pandemic.

Sources:

  • Source: Max Kingsley-Jones/FlightGlobal
  • Source: HSBC analysis