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Jet Airways and Kingfisher are bracing to take a big financial hit of $ 30 million-40 million a year as the European Union implements new emission caps on airlines from January 1, 2012.
Mr Sanjay Varkey, Chief Executive Officer, Shell MRPL Aviation Fuels and Services Pvt Ltd, says this impact assessment is for the first year itself.
“Clarity on the extent of financial impact of the EU ETS on airline will emerge sometime by October.
“The extent of the impact shall depend on the amount of the carbon allowances that would be allocated by the administrating EU state,” said a Jet Airways spokesperson.
Airlines are trying to adhere to the norms on fleet modernisation, research to reduce emissions, compensate for the emissions and cutting weight to reduce emissions.
Efforts of Indian Carriers
Jet Airways started preparing for the norms in 2009. The airline developed an energy and environment monitoring system for monitoring fuel consumption and greenhouse gas emission . The system is mainly used to collect the data of flight activity, passenger, cargo and mail and fuel consumption.
The airline has also been replacing its older fleet with new, fuel-efficient aircraft to improve the overall fuel efficiency and mitigate unit emissions. India's national carrier, Air India, also plans to modernise its fleet with fuel-efficient aircraft.
“The new 787s will help in reducing our emissions. The aircraft with 20 per cent better fuel efficiency is one of the most environment-friendly aircraft in the world,” said an Air India official.
Jet Airways also offers carbon-dioxide emission calculator on its Web site and offers guests to compensate for the emission due to the travel.
The airline also plans to decrease cabin weight to reduce fuel burn.
“Jet Airways has reviewed the number of pages and paper used for in-flight magazines and reducing the number of extra copies in an effort to reduce cabin weight. We have adopted the light weight galley equipment which has a positive impact on aircraft fuel savings. We are also reviewing and developing new in-flight tableware and other items as regards compactness, lightness, number required and design. In particular, we have been introducing special lightweight tableware,” said the spokesperson.
Possible increase in fares
The other option that none of the airlines are talking about, at present, is that they would need to increase fares.
“To offset the financial impact, airlines would have to increase fares to a certain extent.
The measures that they have taken till now might not be enough to adhere to the EU environmental norms,” said an industry official.
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