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ContentContent

Background

StudyResults

Next Steps

33

ICAO role and actions in previous crisis timeICAO role and actions in previous crisis time

October 1973 oil crisis: oil price increased by 400% and oil production decreased by 240%

Early 1974: ICAO Council approved a Recommendation to States to take the following actions

Examine the air navigation and air traffic control procedures over their territories so as to reduce as much as possible flying distances and air traffic delays, according to identified 6 measures

Achieve maximum coordination on fuel supply so as to ensure that the operation of air services be maintained at the level required in the public interest

Where restrictions on aviation fuel supply have to be imposed, give priority to commercial air transport;

Refrain, on a basis of reciprocity, from discrimination against airlines of other countries in the distribution of available fuel at their own airports; and

Consider favourably proposals by airlines of special measures requiring government approval such as amendments to schedules, limitation of frequencies or consolidation of routes, where motivated by the fuel crisis.

1977: ICAO Assembly adopted a resolution (A22-27) calling on the Council to collect and make available to Contracting States relevant information on the subject

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44

0

0.1

0.2

0.3

0.4

0.5

0.6

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

40

45

50

55

60

65

70

75

80

85

90

World air traffic World oil supply

1st Iraq War

Oil CrisisIraq-Iran War

World annual traffic trillion RTKs

Source: ICAO, BP

Financial crisis

Hurricanes

Oil Shock

1970-1980:8.7% p.a.

1980-1990:6% p.a.

1990-2000:5.6% p.a.

2000-2008:4.4% p.a.

Air travel demand and oil supply in crisis timesAir travel demand and oil supply in crisis times

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Air travel fuel consumption growthUntil now not inversely correlated with oil priceCorrelated with state of global economy (GDP growth)

Air travel fuel consumption growthAir travel fuel consumption growthUntil now not inversely correlated with oil priceUntil now not inversely correlated with oil priceCorrelated with state of global economy (GDP growth)Correlated with state of global economy (GDP growth)

Fuel consumption and economic growth

-60

-40

-20

0

20

40

60

8019

7719

7919

8119

8319

8519

8719

8919

9119

9319

9519

9719

9920

0120

0320

0520

0720

09 M

TD

Oil

pric

e gr

owth

in %

-1012345678910

Fuel

pric

e &

GD

P gr

owth

in %Real oil price growth Fuel Consumption growth

Real GDP @ PPP*growth

Source: ICAO, EIA and HIS/Global Insight*PPP: Purchasing Power Parity is an economic theory linking currency exchange rates to prices paid for goods and services in any two countries.

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Study results published in 1979 in Circular 149-AT/52.Study results published in 1979 in Circular 149-AT/52.

Based on multiple sources available, the study looked into :

The patterns of global energy consumption

Projections for oil demand until end of the 20th century

Oil reserves

World oil trade and supply

Alternative energy resources

Aviation fuel supply

Trends and prospects in oil prices

Aspects that would impact the civil aviation fuel requirements in the following decade and in a longer term

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Impact of oil priceImpact of oil price

ASSUMPTIONS

Despite fluctuations in oil price a long-term price trend was defined

Reflects gradual adjustment of demand resulting from conservation measures and the development of other energy sources.

Future aviation fuel price trends uncertain

Competing needs for fuel from other transport modes.?

That could change the price relationships between aviation fuel,gasoline and distillate fuel dependant upon demand developments.

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88

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00197319751977197919811983198519871989199119931995199719992001200320052007

Oil

pric

e (U

S$ /

Bar

rel)

2

7

12

17

22

27

32

37

42

47

Fuel consumption (US Gallons)

Nominal oil priceReal oil priceInternational Air travel fuel consumption

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00197319751977197919811983198519871989199119931995199719992001200320052007

Oil

pric

e (U

S$ /

Bar

rel)

2

7

12

17

22

27

32

37

42

47

Fuel consumption (US Gallons)

Nominal oil priceReal oil priceInternational Air travel fuel consumption

Oil price evolution and air travel fuel efficiencyOil price evolution and air travel fuel efficiency

International ServicesFuel Efficiency 2000-2007

-1.4%

International ServicesInternational ServicesFuel Efficiency 2000Fuel Efficiency 2000--20072007

--1.4%1.4%

Oil price 2000-2007

9.8%

Oil price Oil price 20002000--20072007

9.8%9.8%

International ServicesFuel Efficiency 1978-2000

-2.9%

International ServicesInternational ServicesFuel Efficiency 1978Fuel Efficiency 1978--20002000

--2.9%2.9%

Oil price 1978-2000

-1.6%

Oil price Oil price 19781978--20002000

--1.6%1.6%

Source: ICAO based on OAG timetable, EIA

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99

Air traffic forecasts scenarios predicted in 1978Air traffic forecasts scenarios predicted in 1978

0

100

200

300400

500

600

700

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007Wor

ld tr

affic

in B

illio

n R

TKs Historical traffic

1978-2000: 5.9%

Low-case scenario:

5.1% 1978-2000 (three fold)

Source: ICAO

1978 traffic forecasts scenarios vs historical traffic evolution1978 traffic forecasts scenarios vs historical traffic evolution

1978 High case scenario 8.5% 1978-2000 (six-fold)

Assumptions for air travel demand driversEconomic growthDeclining fares in real terms in line with the trend of oil price between 1978 and 2000Route network expansions with more direct routing Higher service frequencies and reduced travel times

Assumptions for air travel demand driversEconomic growthDeclining fares in real terms in line with the trend of oil price between 1978 and 2000Route network expansions with more direct routing Higher service frequencies and reduced travel times

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esul

ts

1010

0102030405060708090

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Fuel

bur

n

Fuel consumed (USG) Fuel Low Scen Fuel High Scen

Fuel consumption and fuel efficiency

Source: ICAO based on OAG timetable

Stud

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esul

tsFuel Efficiency (in Fuel burn per RTK)

Period 1978 Low Scenario Historical 1978 High Scenario1978-1990 -1.9% -1.7%1990-2000 -1.8% -2.2% -2.4%1978-2000 -1.9% -2%2000-2007 -2.2%

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Adequacy of supplies for aviation fuel demandAdequacy of supplies for aviation fuel demand

More specifically, the major conclusions were:

End 2000, aviation fuel consumption would represent 5 to 10 % ofprojected total oil consumption;

Future civil aviation fuel needs will depend on the proportion of the production which can be refined to meet civil aviation specifications;

Demand for aviation fuel towards end 2000 might be higher than 10 to 15 % of total oil supply and only 10 to 15 % of total crude oil production can be converted to kerosene; and

If the prospective availability of aviation fuel had not been adequate, there would have been a need for remedial measures such as broader technical specifications to aviation fuel or the use of synthetic fuels

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Oil supply and air travel consumption shareOil supply and air travel consumption share

Source: ICAO, CAEP Scenarios to 2050 (preliminary figures), EIA

0102030405060708090

100110120

1980 2005 2015 2030

MB

rl pe

r day

Total Oil supply Transportation share Air travel share

Nex

t St

eps

2005-20301.2%

2005-20301.7%

2005-20301.2%

1313

GIACC/3 request for fuel consumption data under Article 67 mechanismGIACC/3 request for fuel consumption data under Article 67 mechanism

Article 67 defines the ICAO mandate to collect data from each Contracting State, based on the “carrier principle”, i.e. from commercial carriers (to be submitted by the State in which a carrier has its principle place of business),

ICAO Statistics Programme is addressed in Appendix B of Assembly Resolution A36-15 precising that:

ICAO must examine on a regular basis the statistical data (referring to “statistics on airline operations”) collected

Establish the necessary metrics to monitor the performance of the organization in meeting its Strategic Objectives

Fourteenth meeting of the Statistics Panel (STAP/14) convened inMarch 2009 to provide recommendations to the forthcoming Tenth Session of the Statistics Division, to be held in November 2009

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CHALLENGES

Issue of possible duplication of requirements and additional burden placed on Contracting States to report fuel consumption data both to ICAO and the UNFCCC

Complex UNFCCC principles for collecting emissions data, based on country of departure rule

Annex I countries (62% of total traffic) should report emissions while non-Annex I countries should report them to the extent possible

In that context, based on the UNFCCC principle of country of departure, fuel sale data are the only information available by country of departure

CHALLENGES

Issue of possible duplication of requirements and additional burden placed on Contracting States to report fuel consumption data both to ICAO and the UNFCCC

Complex UNFCCC principles for collecting emissions data, based on country of departure rule

Annex I countries (62% of total traffic) should report emissions while non-Annex I countries should report them to the extent possible

In that context, based on the UNFCCC principle of country of departure, fuel sale data are the only information available by country of departure

STAP/14 recommendation: Data collection on fuel consumption to be implementedSTAP/14 recommendation: Data collection on fuel consumption to be implemented

RESPONSES

Introduction of a new form for reporting fuel consumption by commercial air carriers.

Addition of an item regarding aircraft type (passenger versus all-cargo).

Inclusion of an item related to alternative fuels share in total fuel consumed (by aircraft type).

Regular assistance to be provided to States regarding the collection and analysis of data, in the form of workshops, on-the-job training and other assistance requirements

RESPONSES

Introduction of a new form for reporting fuel consumption by commercial air carriers.

Addition of an item regarding aircraft type (passenger versus all-cargo).

Inclusion of an item related to alternative fuels share in total fuel consumed (by aircraft type).

Regular assistance to be provided to States regarding the collection and analysis of data, in the form of workshops, on-the-job training and other assistance requirements

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ConclusionConclusion

Crisis periodicity is shortening from a 10 year period to less than 8 years period and the current economic crisis impacts on air travel fuel consumption have to be carefully analyzed

Need to monitor closely fuel consumption, and fuel efficiency through an ad hoc annual data collection, as recommended notably by the Assembly resolution A22-27

Need to implement air travel forecasts enabling sensitivity analysis to economic growth but also to oil price

Need to explore how , e.g. airport and airspace constraints could impact the current unconstrained forecasts

Continue to follow-up the economic restructuring of the air transport industry in order to determine any potential impact on ICAO Strategic Objectives

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