The chief sustainability officer of Asia’s largest budget airline, AirAsia, has questioned the effectiveness of taxes on people who fly frequently in Asia, a region she said has “specific economic growth and decarbonisation priorities”.
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A global frequent flyer levy has been mooted as a way to keep a lid on greenhouse gas emissions from aviation, which are projected to increase by a factor of two to four times 2015 levels by 2050 at the current rate of industry expansion, with Asia among the fastest-growing regions. Aviation currently accounts for about 2 per cent of global emissions.
Such a levy – which would focus the tax burden on wealthier frequent flyers – could generate revenues towards the annual investment of US$121 billion that International Civil Aviation Organization (ICAO) estimates is required for the aviation sector to reach its 2050 net zero climate target, according to a study by United States-based non-profit research group International Council on Clean Transportation (ICCT).
A frequent flyer levy would help ensure that lower income passengers are not priced out of air travel because of climate policy, according to ICCT.
Another measure to cap aviation emissions emerged in Spain this week. The European country banned some short-haul domestic flights where there is a rail alterative as part of its national plan to cut emissions by 2050.
Yap Mun Ching, AirAsia’s chief sustainability officer, told Eco-Business that a frequent flyer levy similar to that proposed in Spain needs to be assessed for feasibility and effectiveness within the Asian context.
Aviation legislation for the region should be “crafted with careful consideration of our regional circumstances” as well as “the specific economic growth and decarbonisation priorities” of different countries, she said.
While acknowledging the importance of exploring a range of solutions to decarbonise the industry, she said that it is important to prioritise strategies “that are effective and tailored to the unique needs of the Asian aviation industry”.
Air travel is expected to hit a historic high of 4.7 billion people travelling by plane in 2024, some 4 per cent higher than the level of travel before the Covid-19 pandemic, according to data from International Air Transport Association (IATA). Asia accounts for about a third of all air travel.
AirAsia has a market share of more than half (54 per cent) of all flights in Malaysia, according to 2022 data from the company, and a growing share of international travel elsewhere in Asia. The airline flies to 25 countries.
In a LinkedIn post earlier this week, Yap entered the debate surrounding Singapore’s announcement of a carbon levy, which will mean that by 2026 air travellers coming in and out of the city-state will need to pay more for filghts to help fund the cost of sustainable aviation fuel (SAF).
“Airlines have continuously been pressured to decarbonise while being expected to keep fares affordable. This is unrealistic and unsustainable given how expensive decarbonisation options such as SAF are,” she said.
AirAsia’s view is that governments should set decarbonisation targets and support airlines to meet these targets, but at the same time, “there should be acceptance by air travellers that airfares will have to be adjusted to internalise the carbon cost of air travel – this is a fact,” she said. The budget airline’s chief executive Tony Fernandes has also weighed in on the discussion, saying that regulators should improve air traffic management at airports so that airlines can burn less fuel.
SAF is “not the panacea to decarbonisation,” Yap said, while acknowledging that it is AirAsia’s responsibility as an airline is to take action needed to meet decarbonisation targets “using all pathways taking into account business viability and technological feasibility.”
The priority for airlines is to cut out waste caused by inefficiencies in operations and airspace management, she said. “Otherwise, even if we utilise SAF, we would be burning what we do not need to burn.”
“For every dollar we spend on SAF, it is an opportunity cost of investing in upgrades which can permanently reduce wastage. Airlines need to be able to balance out their expenditure taking all factors into consideration,” she said.
At AirAsia’s inaugural sustainability day held last year, Yap said that AirAsia’s top decarbonisation priorities are in upgrading its fleet to the A321neo, which most aviation industry players see as the most fuel-efficient aircraft on the market today, and expanding its fuel efficiency programme.
Correction note (28 February 2024): This story has been edited to more accurately and clearly reflect Yap’s views. We apologise for any inconvenience caused to readers.
