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The global economy is facing two simultaneous and wholly global systemic crises: climate change and the COVID-19 pandemic. Provide a critical analysis of how these two crises are impacting the...

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The global economy is facing two simultaneous and wholly global systemic crises: climate change and the COVID-19 pandemic. Provide a critical analysis of how these two crises are impacting the aviation industry and provide suggestions on what steps the industry can take to effectively deal with and better prepare for such crises.

Answered 12 days After Dec 05, 2022

Solution

Komalavalli answered on Dec 18 2022
34 Votes
Introduction:
Aviation has been one of the fastest expanding activity in Saudi Arabia's transportation industry during the last decade. From 2010 to 2019, aviation demand increased at a compound annual growth rate of 9.8%, reaching a high of more than 103 million passengers in 2019 (including both international and domestic flights). As a result, increased transportation demand is a big problem for energy firms and deca
onization advocates (mainly CO2 emissions).
Despite the fact that the aviation sector accounts for just around 3% of total worldwide greenhouse gas emissions, manufacturers, policymakers, and stakeholders are working to develop and deploy alternative fuel sources (i.e. non-fossil fuels) in order to reduce global CO2 emissions. Global CO2 emissions are predicted to fall dramatically in the next years due to the development of new alternative fuels and technologies. However, most alternative fuels are not commercially feasible since their infrastructure and prices are far greater than those of fossil fuels. It has prompted segments of the aviation industry, such as the International Civil Aviation Organization (ICAO) and the International Air Transport Association (IATA), to establish a combination of market basket rules to minimise future growth in CO2 emissions.
Countries' attempts to minimise CO2 emissions continue to differ significantly. While politicians may help by applying incentives and levies, airlines, airports, and manufacturers must also take action to produce money. One example is the EU's refuelling strategy for flights that will be drastically reduced by 2050. Global energy consumption for the aviation sector is predicted to rise, as are the industry's efficiency and penetration. Non-fossil fuels and other alternate sources can be tough to come by.
The aviation industry is in charge of ensuring the safe transportation of commodities and people. More than $7 trillion in goods and 4 billion people were moved in 2019. Aviation demand has increased dramatically in regional, national, and international markets, resulting in the establishment of almost 70 million aviation jobs and related enterprises worldwide. The COVID-19 pandemic, on the other hand, has lowered demand in recent decades.
Prior to the COVID-19 epidemic:
The airline has distinguished itself in the sector by offering low-cost flights to clients, therefore assisting in the expansion of airline connectivity (Figure 1). Airlines have worked hard to enhance efficiency via passenger load factor, but this is not the case for cargo (Figure 2). Reduced consumption improves equipment efficiency and performance (i.e. lower emissions per passenger-km).
Source: Economic Performance of the Airline Industry (IATA 2019b).
Source: Airlines Financial Monitor (IATA 2019a).
However, in the face of severe competition in the aviation industry, airlines are finding it increasingly difficult to raise ticket prices in order to gain revenue, particularly on routes where they dominate. Furthermore, the advent of new airlines and network a
angements may place further strain on the airline. This pressure is
ought on by rival airlines that serve the same destinations but via different routes. As a result, competition in the aviation business is becoming more intense.
Airlines aspire to purchase additional airlines in order to gain control of the industry and prevent losing market share, and they want to grow into larger and larger companies using a range of business models. There is, however, a major difference between airlines in various regions. Some airlines provide a basic, no-frills product while attempting to create additional cash through auxiliary services.
As technology progresses, greater operational efficiency and the use of alternative fuels will play an essential part in developing more efficient aviation systems across the world. The most challenging hurdle is that the necessary new technologies are not yet commercially available, making employment in the aviation sector a continuing battle for the foreseeable future. The development of u
an air transport options based on electric vertical take-off and landing technology, for example, is strongly dependent on the implementation of an adequate legislative environment.
As a result, manufacturers and airlines are attempting to address cu
ent issues connected to market development, new technologies, fossil fuel consumption, penetration of de-chemical fuels, and so on (strong hydrogen and electricity). Rules and incentives, on the other hand, must play an essential role in assisting the global aviation sector in transitioning to a greener economy.
As international aviation traffic rose in the aftermath of the COVID-19 out
eak, Saudi Arabia hosted its inaugural Future Aviation Forum this week in Riyadh. This two-day event
ings regional governments and business executives together with global CEOs and regulators as the sector grapples with resolving health challenges and shaping the future of air travel. The kingdom intends to invest roughly $100 billion in the aviation sector by 2030, with the goal of making Saudi Arabia a worldwide aviation centre. The Directorate General of Civil Aviation wants to enhance air connection to 250 destinations, serve 330 million people, and quadruple capacity by the end of the decade as part of its strategy. Air freight has increased to 4.5 million tonnes. To augment cu
ent airlines, the kingdom also plans to build a new international airport in Riyadh, as well as eight more regional airports.
Because of the pandemic, the worldwide aviation sector is expected to be worth $300 billion by 2020. However, the business is predicted to increase at a 7.7% annual pace from $300 billion in 2015 to $430 billion by 2025. However, when the aviation industry recovers, it must consider ways to make its operations more ecologically friendly.
The aerospace industry is making enormous achievements in this area of innovation. Recent CO2 efficiency measures have cut the amount of fuel needed each trip in half compared to 1990. This has been made possible by technical
eakthroughs such as machines. advances in infrastructure and operations, as well as lighter flying.
Total aviation emissions, on the other hand, continue to rise as air traffic flows - people and goods - rise as a result of population and economic growth, as well as business globalisation. Much of the growth has come from emerging nations, where as people become wealthier, their desire to explore the world grows.
To address this, the aviation industry created the Aviation Climate Action Framework, which aims to achieve a balance between economic growth through tourism and lowering the sector's environmental effect.
The ACAF framework is founded on technical advancement. Each new generation of aircraft developed today, for example, is 15-20% more fuel efficient. Aircraft manufacturers spend more than $15 billion per year on efficiency research.
Another area where the industry is making strides is in sustainable aviation fuels. The development of alternative aviation fuels, such as biofuel blends, might be the key to achieving sustainable air transport. When compared to fossil fuels, alternative fuels can cut CO2 emissions by up to 80% without requiring extensive fuel systems or engine changes.
Another critical component of the ACFO system is the improvement of operations and infrastructure. To minimise emissions,...
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