A Look Back & Forward from Rio – Ever-Sustainable Aviation

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 13%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	A Look Back & Forward from Rio – Ever-Sustainable Aviation
	PubZone1 Nancy Young, Vice President, Environmental Affairs Airlines for America Keynote Address at ATW’s 5^th Annual Eco-Aviation Conference *A Look Back & Forward from Rio – Ever-Sustainable Aviation* Washington, D.C. June 21, 2012 INTRODUCTION I am delighted to be here today to kick off the 5^th Eco-Aviation Conference. As you likely know, “Rio+20,” the United Nations Conference on Sustainable Development, is taking place at the very same time in Rio de Janeiro. Rio+20 marks the 20^th anniversary of the 1992 “Earth Summit,” widely regarded as a foundational pillar of sustainable development principles. This seems fitting – as I would argue that Eco-Aviation is a synonym for sustainable aviation. So, while we can’t go to Rio – let’s bring a little Rio here. Unfortunately, I can’t offer you a Caipirinha or a bit of Brazilian carnival. But what I can do is examine where aviation fits within the vision of sustainable development cemented in Rio. I think a great case can be made that aviation is a poster child for such development – and perhaps most critically, continues to lean forward in that regard. WHAT IS SUSTAINABILITY? What is sustainability? What the original Rio Summit and other fountains of sustainability doctrine established was that sustainability is a balancing and advancing of overlapping economic, social and environmental good. A key expression of that comes from the “Agenda 21” document agreed back in 1992, noting: Experience has shown that sustainable development requires a commitment to sound economic policies and management, an effective and predictable public administration, the integration of environmental concerns into decision-making and progress towards democratic government, in the light of country-specific conditions, which allows for full participation of all parties concerned. The balancing of economic, social and environmental good is not a static condition. That balance is and must be readjusted as our understanding grows and our needs evolve. Put another way – and here I borrow from a characterization that Tim Johnson of the Aviation Environment Federation made this spring – sustainability is a journey. So, where is aviation on that journey? And how are we doing? Let’s start with the first of the three elements of sustainability – aviation’s contribution to the economy. AVIATION AND THE ECONOMIC PRONG OF SUSTAINABILITY There is no question that aviation is a tremendous driver of the U.S. and global economies. In the United States, commercial aviation creates 10 million well-paying U.S. jobs and drives more than $1 trillion in annual economic activity. The U.S. airline industry is a vital enabler of commerce, for example – moving passengers for business, moving critical cargo and enabling the just-in-time delivery of perishable goods, and powering U.S. exports. And it is well-recognized that the airlines serve as an essential lynchpin in the supply chain with other aviation industry players – many of you in this room – airframe and aircraft engine manufacturers, airports, fuel providers and others. Despite our contribution to the economy, however, as an industry, the U.S. airlines continue to struggle to make a return on capital. 2011 was a “good” year as, on aggregate, U.S. airlines were able to make it into the black. But even taking 2011 into account, U.S. airlines still lost more than $50 billion between 2001 and 2011, and shed 157,000 jobs. The industry has worked hard to right itself – in all matters that are within its control. While U.S. airlines have taken significant steps to put themselves in a position to be competitive, there are major factors within the control of the government that need to change. Just a few examples: The tax burden. The federal tax rates paid by airlines are higher than federal “sin” taxes paid on alcohol, tobacco and firearms, which were originally intended to discourage use. In fact, federal taxes account for 20 percent of your ticket price – that is $61 on a typical $300 ticket. U.S. visa and border control policies, which make the United States one of the most difficult countries to visit, cutting into business travel and tourism. The tyranny of petroleum-based oil and, in particular, the price volatility that inhibits airline efforts to lock in longer-term business and investment plans. To improve the balance on the economic sustainability side of the equation, U.S. carriers need a more rational, normalized business environment, with less government interference, and with a fair tax and fee structure. As you may have heard from my CEO, Nick Calio, A4A is pursuing this aim through the implementation of a National Airline Policy, a comprehensive approach to putting the U.S. airline industry on the path to sustained profitability that will make it an even greater driver of economic growth than it is today. The National Airline Policy has five core elements: Rationalize our regulatory structure; Reduce our tax burden; Accelerate the development of the necessary infrastructure; Enable global competitiveness; and Mitigate fuel price volatility So what does this have to do with sustainability? For the “so what” I turn again to a key point coming out of Rio in 1992, the connection Agenda 21 makes between supportive economic and regulatory policies and sustainable development. And I quote: Economic policies of individual countries and international economic relations both have great relevance to sustainable development. The reactivation and acceleration of development requires both a dynamic and a supportive international economic environment and determined policies at the national level. It will be frustrated in the absence of either of these requirements. A supportive external economic environment is crucial. Commercial airlines power a tremendous amount of positive economic activity. Imagine how that could multiply if the U.S. airlines were further empowered by a National Airline Policy. This should be recognized as a crucial part of the journey of sustainability. AVIATION AND THE SOCIAL PRONG OF SUSTAINABILITY Now to the second element of sustainability – aviation’s contribution to social welfare. At the end of 2011, my organization – previously the Air Transport Association of America – got a new name – Airlines for America. Our tag line? “We Connect the World.” That is tremendous shorthand for the social good the airlines provide. We bring people closer together. When disaster strikes, our airlines fly in aid and fly people out of harm’s way. They connect families. They enable the just-in-time delivery of organs for transplant and vital medicines. Every day, the U.S. airline industry transports two million passengers and 50,000 tons of cargo in more than 25,000 flights. We do this safely. Indeed we are the safest form of transportation on the planet, bar none. And we do it cost-effectively, as the real cost of airfares to consumers is dramatically lower today than when the first Rio conference was held in the early 1990s. Cutting to the chase – airlines score very high on the social good prong of sustainability. AVIATION AND THE ENVIRONMENTAL PRONG OF SUSTAINABILITY But as we are at the Eco-Aviation conference, I want to focus the bulk of my time on the third element of sustainability, environmental protection. While sustainability involves a balancing between the economic, social and environmental pillars, the “high scores” we have achieved on the economic and social pillars have not come at the expense of the environmental pillar. To the contrary, the industry’s environmental performance has gone from good to better and better again, with a commitment to continuing that trend. Just looking at where we are now, compared to where we were when the first Rio conference was held in 1992 bears this out. Twenty years ago, over 2.7 million Americans were exposed to significant levels of aircraft noise – at the 65 decibel day-night noise level. FAA statistics show that fewer than 350,000 are today, although U.S. airlines are carrying almost twice as many people. According to EPA, nationwide air quality has improved significantly for the six common air pollutants since the early 90s. Nationally, air pollution was lower in 2010 than when the first Rio summit was held for: - ozone, by 17 percent - particulate matter – PM10 – by 38 percent - lead, by 83 percent - nitrogen dioxide, by 45 percent - carbon monoxide, by 73 percent - sulfur dioxide, by 75 percent Despite doubling the number of passengers transported, U.S. aviation has been a big part of that story, with aircraft emissions smoke and carbon monoxide reduced to minute levels and strict controls placed on emissions of oxides of nitrogen – NOx – from aircraft engines. In fact, since 1992, EPA has revised the aircraft engine standards for NOx four times, in concert with the international standards adopted through the International Civil Aviation Organization, under the ICAO Committee on Aviation Environmental Protection, in which EPA and FAA participate. Two of those standards were codified into U.S. law just this week. As a result, NOx emissions from aircraft remain less than one percent of the nation’s NOx inventory and the standards adopted this week will continue to ensure that aviation NOx is minimized. Let’s turn to greenhouse gas emissions now. It was the Rio conference 20 years ago that really brought climate change to the front burner – no pun intended. Among the breakthrough agreements achieved in 1992 was the creation of the United Nations Framework Convention on Climate Change (UNFCCC). Under that treaty, countries agreed to work to stabilize greenhouse gas emission concentrations in the atmosphere “at a level that would prevent dangerous anthropogenic interference with the climate system.” Where are the airlines in this part of the journey? The evidence demonstrates that we’ve traveled far and well and must continue to do so. Again, let’s look back to the time of the first Rio conference. Between 1992 and 2011, the U.S. airline industry improved its fuel efficiency by 55 percent, resulting in 933 million metric tons of carbon dioxide (CO₂) savings – equivalent to taking 10.6 million cars off the road on average in each of those years. Further, data from the Bureau of Transportation Statistics confirms that U.S. airlines burned 11 percent less fuel in 2011 than they did in 2000, resulting in an 11 percent reduction in CO₂ emissions, even though they carried almost 16 percent more passengers and cargo on a revenue-ton-mile basis. And we are not stopping there. The initiatives that our airlines are undertaking to further address carbon emissions are designed to responsibly and effectively limit our fuel consumption, emissions contribution and potential climate change impacts while allowing commercial aviation to continue to serve as a key contributor to the economy. Over the course of the day today, you will hear a great deal about the array of measures the airlines are taking – in concert with the manufacturers, airports, air navigation service providers and governments to reduce fuel burn and emissions. - You will hear about what we are doing with today’s technology and operations to maximize fuel efficiency and about research to develop the emissions-saving measures for tomorrow. - You’ll hear about partnering efforts to modernize the outdated U.S. air traffic management system on a business-case basis – which could bring 12 percent emissions savings in the United States – and you’ll hear about similar efforts around the world. - You’ll hear about the great progress we’ve made on sustainable alternative aviation fuels and about the challenges we are tackling to get to scaled-up production and cost-competitiveness with these fuels. --And more. Although varied, these measures have at least three crucial attributes in common. First, they promise to bring real emissions reductions within the aviation sector on top of those we already have achieved. Second, advancing them takes a concerted effort from all stakeholders – airlines, airports, manufacturers, air-navigation service providers and the government. Third, they rely in significant part on the airlines’ ability to invest. That brings me to the elephant in the room. The unilateral application of the European Union Emissions Trading Scheme (EU ETS) to international aviation and, in particular, to U.S. airlines. A4A is joined in our opposition to this scheme by an extensive, diverse and bipartisan constituency, in the United States and around the world. Key among our concerns is that the EU jurisdictional grab over aviation emissions is a clear violation of the sovereignty of other nations and the treaties governing international aviation and commerce. Interestingly, harkening back to our Rio theme, this unilateral action also violates a key principle adopted at the 1992 Summit stating: Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus. What is also at stake – and what likely is driving the retaliatory measures threatened by other nations – is the precedent. If the EU can impose a tax reaching aircraft emissions around the world despite the limits in relevant treaties, on what grounds will we be able to keep other countries from imposing multiple, overlapping, worldwide taxation schemes on aircraft emissions? And what if the EU decides that the principles it has used to justify a unilateral assertion of jurisdiction over emissions also apply to labor laws, health care policies or other regulatory matters attendant to a flight that might touch down in Europe? A4A and our many allies on this are also opposed to the EU ETS because it poses a threat to advancing the right kind of measures to further address aviation greenhouse gas emissions. The EU ETS imposes a steep levy on U.S. airlines. Moreover, given that carbon prices are volatile, the EU ETS exposes U.S. airlines to increasing and varying costs that are difficult to predict and incorporate into business planning. In light of the sustained economic downturn in Europe, carbon-allowance prices in the EU currently are about a third of what they were just three years ago. However, even projecting forward from the current cost of carbon, U.S. airlines will be required to pay into EU coffers more than $3.1 billion between 2012 and year-end 2020. Notably, none of the monies collected by the European States are required to be used for aviation environmental purposes in particular or even environmental purposes at all. All the while taking U.S. airline, passenger and shipper dollars, the EU ETS will siphon away to European coffers the very funds that our airlines need to continue to invest in the technological, operational and infrastructure improvements that bring real emissions reductions. Because A4A opposes the unilateral application of the EU ETS to U.S. airlines and aircraft operators, some have tried to assert that A4A and its member airlines oppose regulation all together. This could not be farther from the truth. What we seek is what the Future of Aviation Advisory Committee (FAAC) recommended in December 2010, a “harmonized sectoral approach for aviation CO₂ emissions reductions.” As recognized by the FAAC, “disparate and conflicting requirements imposed at the state, Federal and/or international levels can undercut necessary investments and progress.” To address this, the FAAC found that “[t]here is a strong need for a rationalized, harmonized approach to aviation GHG emissions, as opposed to the myriad of often counterproductive proposals – particularly those involving emissions taxes, charges, and trading.” To this end, A4A and its members are part of a worldwide aviation coalition with a significant proposal on the table for further addressing aviation CO₂ through a harmonized approach, under ICAO. At this stage, I hope that all of you are familiar with the industry’s “global sectoral approach” proposal for aviation carbon emissions, which includes an aggressive set of measures and emissions targets requiring industry and governments to do their part. As proposed by the industry, these would be an annual average fuel-efficiency improvement of 1.5 percent through 2020 and carbon-neutral growth from 2020, subject to critical government infrastructure and technology investments such as air traffic control modernization, with an aspirational goal of a 50 percent reduction in CO₂ by 2050 relative to 2005 levels. Significantly, at its 2010 Assembly, ICAO adopted much of the industry’s framework. It confirmed that the appropriate approach for addressing aviation greenhouse gas emissions through 2020 is through fuel-efficiency goals and established a sectorwide goal of carbon-neutral growth from 2020. The States agreed to track their aviation emissions and to submit “Action Plans” by the end of this month describing the steps they are taking to help achieve the global emissions goals. Further, after adopting a set of principles for market-based measures, the States directed ICAO to further assess the potential for market-based measures that might be agreed on a global basis and a framework (or more detailed “playbook”) for such measures. This work is going on now, as is work on a first-of-its-kind CO₂ standard for aircraft. With the aviation industry supporting a global sectoral approach at ICAO and the many countries who oppose the EU ETS recommitting themselves to further address aviation greenhouse gas emissions through ICAO, implementation of this framework could be agreed, as hoped, at the ICAO Assembly in September 2013. But, as U.S. government representatives to ICAO have recognized, the opposition of many countries to the unilateral EU ETS and the lack of trust the unilateral measure has engendered have been roadblocks to reaching full agreement at ICAO. Through direct and coalition diplomatic efforts, the Obama administration has given the EU every chance to withdraw or stay its unilateral scheme. But the EU has snubbed these diplomatic efforts, as they did when they adopted an illegal ban on aircraft fitted with “hushkit” technology in the early 2000s. As it did with the unilateral hushkit ban, the United States must now take concrete legal action under Article 84 of the Chicago Convention to overturn the application of the EU ETS as to U.S. airlines and to bring the EU back to the table in support of a global framework under ICAO Even as A4A urges the Obama administration to take this concrete legal action, the U.S. Congress is considering its own action. Congress already expressed opposition to the unilateral EU scheme in its FAA reauthorization legislation, which was signed into law by President Obama in February. But legislation approved by unanimous consent in the U.S. House of Representatives, HR 2594, would go even further; it would prohibit U.S. carriers from participating in the ETS. Similar, bipartisan legislation now is pending in the United States Senate. At a June 6 hearing before the Senate Commerce Committee, I urged approval of this legislation. Not because I want my airlines to be caught between pieces of conflicting European and U.S. law, but because we need to get to a state of regulation that is sustainable. As recognized around the world, we must remove the wrong measure in favor of the right one. We need concrete legal action to serve as a critical catalyst for finalizing the global agreement at ICAO. CONCLUSION That the EU ETS dispute is not about whether we should do more on aviation and climate change, but about what is the best way to do so, bodes well for the future of aviation with respect to the environmental pillar of sustainability. And it bodes well for aviation in general. As we are here, a set of my colleagues in the Air Transport Action Group are in Rio at the Rio+20 conference presenting the industry’s declaration on sustainable aviation going forward. The journey continues. With the industry’s commitment, and the right kind of support from governments around the world, aviation will serve as an ever-greener engine of the economy. Let us all aim for ever-more sustainable aviation. PubZone2	A4A is a leading source for key aviation information.