Climate change is dramatically and vividly apparent. This is a global problem which needs an international solution. The 2016 Paris Agreement is a legally binding international treaty whose goal is to limit global warming to well below 2̊ Celsius.
There are six pathways in the decarbonisation strategy:
Major changes in the mix of electrical power generation are underway in favour of renewables and to accommodate the two-way flow of electricity in an increasingly distributed generation system. Carbon capture and storage technologies will provide a bridge allowing for the continued use of fossil fuels in electricity generation and industry until low-carbon alternatives can be implemented.
Electricity is expected to play a greater role in the global energy mix in the future and while the associated decarbonisation process will be disruptive it will create major opportunities and threats over the next two decades. We already witness multiple waves of new technologies and infrastructure in progress which are disrupting and transforming not only the electrical power generation market but also all forms of transport from road to aviation and shipping.
Slow recovery in global air travel
The aviation industry is in crisis. Globally, governments’ response to coronavirus pandemic resulted in the greatest de-connecting of the world since the Second World War. The International Aviation Transport Association’s (IATA’s) latest activity data for February 2021 showed that global revenue passenger-kilometres (RPKs) were 74.7% below pre-crisis levels in February 2019. The world share of passenger RPKs is split 45.7% international and 54.3% domestic, with the latter faring much better during the pandemic. The global passenger load factor was 55.4% in February 2021 down from 80.7% in February 2019.
By contrast, cargo tonne-kilometres (CTKs) rose by 9% compared with February 2019. The international air cargo segment accounts for 85.8% of the global air cargo market and is being lifted by the rebound in the global economic activity and the gain in air cargo’s share of the global goods traded market. This is as sectors such as retail and automotive manufacturing react to pandemic disruptions by diversifying their supply chains to gain flexibility and reduce supply chain risk.
While the global airline industry is expected to recover as restrictions are lifted, we expect disruptive shifts, which will have implications for: