Market briefs trending negative! Dampen hope for 2022 turnaround.
Ishka Global. April 28, 2022. Ishka issued the following market update: While liquidity remains strong at most North American and European airlines, and many have begun taking steps to deleverage their balance sheets, on-going losses and fresh debt issuances have weakened the capital structures of others. Higher fuel prices, other inflationary pressures, the repercussions of the Russian Invasion of Ukraine and pilot shortages will make it that much more challenging to identify viable airline investment opportunities and formulate lending strategies.
Reuters & CNBC. April 28, 2022. Reuters reported in March the Federal Aviation Administration warned Boeing in a March 21 letter that existing certification schedules for the B737 MAX 10 and B777X were “outdated and no longer reflect the program activities. CNBC reports: ”Boeing is preparing for a new delay in the B777X program that would push first deliveries by at least a year into early 2025, a source briefed on the matter told Reuters. The delay is in line with an estimate given by the plane’s biggest customer - Emirates Airlines - whose president, Tim Clark, told Aviation Daily in an April 7 story he did expect to receive its first B777X before 2025. Boeing expects to delay the certification target until late 2024 - or by another nine to 12 months for the wide-body aircraft - with deliveries to follow in 2025. The B777X has been in development since 2013 and first deliveries were expected t in June 2020. Reuers reported Boeing advised key airlines and parts suppliers that B787 deliveries would resume in the second half of 2022. Boeinghas an undelivered B787 inventory, since deliveries were halted nearly a year ago over structural flaws, that locked up desperately needed cash and cut airline capacity.
JPMorgan. April 28, 2022. "JPMorgan says buy electric aircraft maker Archer to play a $1 trillion market opportunity." Good news for the transition to low CO2 emission aircraft that will likely replace aircraft powered by gas turbine engines in the long term.
Industry & Market Insight. Market for aircraft trading, decarbonization & CO2e removal product.
“Seventy-five per cent of the airlines IATA looked at had less than three months of cash to cover bills. That is pretty much running out for many airlines now, and that’s driving the liquidity crisis we have today.” (IATA). The aircraft market is distressed, along with airlines and airports. The "Pandemic economy" will delay passenger travel and freight transport recovery. The "Climate emissions economy" is here to stay. Aircraft emissions reduction options as proposed by Airbus, Boeing & the ICAO CORSIA scheme are not sustainable. GE, Pratt & Whitney and Rolls-Royce plans for the engine to power the next generation of narrowbody aircraft will be geared turbofan engines, a gas turbine engine. Renewable Sustainable Aviation Fuel (SAF) is only a small part of the solution.
IATA has accepted that the biofuel researched to date do not provide solution for removing aircraft greenhouse gas emissions. The biomass for biofuel production, is in its fifth generation of development and is offering limited results. IATA believes the fossil fuel will continue to be the primary source of energy powering aircraft in 2050. The public will not accept best-fit solutions. IATA has now acknowledged that the SAV strategy as first envisioned does not work. The detailed reasons why are set out in the trade association’s recently published statements on the subject. ICAO is working to produce better solutions. Until that is accomplished, airlines will want to rely on "Negative " technologies to account for CO2e levels. This is a high-risk strategy.
Aircraft are already stigmatized by the Greta effect, civil society groups and investment institutions. That is not to say that banks will stop financing aircraft. Lessors will still access to asset backed securities markets, and airlines and aiports will continue to raise equity and debt, but at lower levels and higher costs.
Companies and Organizations reported a surge in private and public entities signing onto climate action commitments in 2020.
Companies and Organizations reported a surge in private and public entities signing onto climate action commitments in 2020. This occurred after the UN IPCC (the Intergovernmental Panel on Climate Change) declared 2020 to 2029 as the final window to counteract catastrophic climate damage.
GHG emissions standards.
"Having now declared a commitment, the challenge for them
is to successfully deliver on their GHG reduction commitments."Protocols : The protocols are the set of rules that enable communication between ICAO as sender and airlines as receiver.In order to make communication successful between stakeholders , some protocols made up of some rules and procedures, have been agreed upon at the sending and receiving ends of the xxxxxxxxxxxxxxxxxx.
Proprietary Protocol.
These are often developed by a single vendor to use in their products. They do not scale well in supply chain made up of multiple suppliers, each implementing their own standards.
Standard Protocol
These are published open standards, which any vendor can use in their products. They are no vendor specific. Standard protocols are agreed and accepted by the whole aviation industry, developed by the collaborative effort of experts from different organizations.
Different types of protocols are used for different types of communication. To understand the concept of standard protocols more clearly, take a real-world example of has a globally agreed and accepted shape, so that it can fit well in a
manufactured by different vendors.
In all cases the climate change protocols used in the air transportation climate emissions management process are weak because they are voluntarty, or defined too narrowly. Standards are of two types :De Facto Standard.
The ones utilized in the airline industry through convention. They have not been approved by any organization. They are recognized as standards because of their widespread use, or they are established by manufacturers. For example, Airbus and Boeing established their own rules on their products which are different. They use some of the same standard rules for manufacturing products.De Jure Standard.
The are the standards that have been approved by officially recognized body like ANSI , ISO , IEEE etc. These are the standard which are important to follow if it is required or needed. For example : All the data communication standard protocols like SMTP , TCP , IP , UDP etc. are important to
Greenhouse Gas Protocol (GHGP). They provide standards, guidance, tools and training for business and government to measure and manage climate-warming emissions. The GHGP arose when WRI and WBCSD recognized the need for an international standard for corporate GHG accounting and reporting in the late 1990s. Together with large corporate partners such as BP and General Motors, in 1998 WRI published a report called, “Safe Climate, Sound Business.” It identified an action agenda to address climate change that included the need for standardized measurement of GHG emissions.
Similar initiatives were being discussed at WBCSD. In late 1997, WRI senior managers met with WBCSD officials and an agreement was reached to launch an NGO-business partnership to address standardized methods for GHG accounting. WRI and WBCSD convened a core steering group comprised of members from environmental groups (such as WWF, Pew Center on Global Climate Change, The Energy Research Institute) and industry (such as Norsk Hydro, Tokyo Electric, Shell) to guide the multi-stakeholder standard development process.
The first edition of the Corporate Standard, published in 2001, has been updated with additional guidance that clarifies how companies can measure emissions from electricity and other energy purchases, and account for emissions from throughout their value chains. GHG Protocol also developed a suite of calculation tools to assist companies in calculating their greenhouse gas emissions and measure the benefits of climate change mitigation projects.
The Paris Agreement, adopted within the United Nations Framework Convention on Climate Change (UNFCC) in December 2015, commits participating all countries to limit global temperature rise, adapt to changes already occurring, and regularly increase efforts over time. GHG Protocol is developing standards, tools and online training that helps countries and cities track progress towards their climate goals.
GHG Protocol supplies the world's most widely used greenhouse gas accounting standards. The standards below are designed to provide a framework for businesses, governments, and other entities to measure and report their greenhouse gas emissions in ways that support their missions and goals. In 2016, 92% of Fortune 500 companies responding to the CDP used GHG Protocol directly or indirectly through a program based on GHG Protocol. It provides the accounting platform for virtually every corporate GHG reporting program in the world.
Product StandardThe Product Standard can be used to understand the full life cycle emissions of a productand focus efforts on the greatest GHG reduction opportunities. This is the first step towards more sustainable products.
Greenhouse Gas Protocol (GHGP). They provide standards, guidance, tools and training for business and government to measure and manage climate-warming emissions. The GHGP arose when WRI and WBCSD recognized the need for an international standard for corporate GHG accounting and reporting in the late 1990s. Together with large corporate partners such as BP and General Motors, in 1998 WRI published a report called, “Safe Climate, Sound Business.” It identified an action agenda to address climate change that included the need for standardized measurement of GHG emissions.
Similar initiatives were being discussed at WBCSD. In late 1997, WRI senior managers met with WBCSD officials and an agreement was reached to launch an NGO-business partnership to address standardized methods for GHG accounting. WRI and WBCSD convened a core steering group comprised of members from environmental groups (such as WWF, Pew Center on Global Climate Change, The Energy Research Institute) and industry (such as Norsk Hydro, Tokyo Electric, Shell) to guide the multi-stakeholder standard development process.
The first edition of the Corporate Standard, published in 2001, has been updated with additional guidance that clarifies how companies can measure emissions from electricity and other energy purchases, and account for emissions from throughout their value chains. GHG Protocol also developed a suite of calculation tools to assist companies in calculating their greenhouse gas emissions and measure the benefits of climate change mitigation projects.
The Paris Agreement, adopted within the United Nations Framework Convention on Climate Change (UNFCC) in December 2015, commits participating all countries to limit global temperature rise, adapt to changes already occurring, and regularly increase efforts over time. GHG Protocol is developing standards, tools and online training that helps countries and cities track progress towards their climate goals.
GHG Protocol supplies the world's most widely used greenhouse gas accounting standards. The standards below are designed to provide a framework for businesses, governments, and other entities to measure and report their greenhouse gas emissions in ways that support their missions and goals. In 2016, 92% of Fortune 500 companies responding to the CDP used GHG Protocol directly or indirectly through a program based on GHG Protocol. It provides the accounting platform for virtually every corporate GHG reporting program in the world.
Product StandardThe Product Standard can be used to understand the full life cycle emissions of a productand focus efforts on the greatest GHG reduction opportunities. This is the first step towards more sustainable products.
Announcing targets is one thing, validating them is another.
Corporations are increasingly claiming that their goods and services reduce emissions. In many cases these claims are unfounded, unverifiable or inaccurate. Some examples are: cold-water laundry detergents, fuel-saving tires, energy-efficient ball bearings and emissions-saving data centers. A common miscalculation is that while companies tend to evaluate the way their products avoid emissions, few of them explicitly considered how their products might increase emissions.
Multiple studies have shown that considerable variation and widespread methodological problems exist across industry sectors in how companies measure and report claimed emissions reductions in key areas that have consequences:
1. This undermines confidence once consumers realize they are making purchasing decisions based on unreliable product information.
2. It creates creditility issues for corporations using components in their products from sources that overstate their emissions values.
3. Open to greenwashing charges. Businesses across the supply chain riask exposing themselves to possible accusations of greenwashing for GHG emissions proven to be inaccurate.
GHG emissions calculation methodology.
The Greenhouse Gas Protocol was launched in 1998. Its mission is to develop internationally accepted greenhouse gas (GHG) accounting and reporting standards for business and to promote their broad adoption.The protocol is a multi-stakeholder partnership of businesses, non-governmental organizations (NGOs), governments, and others convened by the World Resources Institute (WRI), a U.S.-based environmental NGO, and the World Business Council for Sustainable Development (WBCSD), a Geneva-based coalition of 170 international companies. What is the GHG Protocol Initiative:It is an agreed set of GHG emissions standards.
Standard 1: Emissions reporting standard. The accounting standards document provides a step-by-step guide for companies to use in quantifying and reporting their GHG emissions.Standard 2: Quantification Standard (forthcoming; a guide for accounting for and quantifying reductions from GHG mitigation project for which producers calculate how much GHG a product produces for every stage of its life cycle emissions:
1. from extraction of raw materials,
2. to production and,
3. pocessing,
4. shipping, through to
5. product use and end-of-life treatment.Protocol users.GHG Protocol supplies the world's most widely used greenhouse gas accounting standards. The Corporate Accounting and Reporting Standard provides the accounting platform for virtually every corporate GHG reporting program in the world.
For example, a Japanese company has developed double-glazed insulated glass for residential windows and doors. The company claims that while manufacturing double-glazed glass produces higher emissions compared to single-glazed glass, emissions are reduced during the use phase because the glass allows rooms to stay at comfortable temperatures while using less energy. The company compared the life cycle emissions of both products over a 30-year span, estimating that double-glazed glass panes avoid 217.46 kilograms of Co2 per square meter compared to single-glazed glass.
- The aircraft market is in a very challenging position, along with airports and manufacturers. The "Pandemic economy" will delay passenger travel recovery The "Climate emissions economy" is here to stay Aircraft emissions reduction options as proposed by Airbus, Boeing & the ICAO CORSIA scheme are not sustainable. The public will not accept these options !The airlines are today reliant on "Negative emissions" technologies to account for CO2e levels, when renewable Sustainable Aviation Fuel (SAF) technlology is the only solution the flying public will accept.
- Decarbonization Shannon Aero has ambitious goals for responding to the air transportation debarbonization crisis. We offer:
- 1. Solutions based on new concepts for the air transportation crisis, as the industry recovers.
- 2.2 New revenue streams for funding replacement of GHG emitting aircraft. 2. . Market based tools and trading strategies for managing aircraft reuse, repair, remake, rebuild and R&D during the commercial aircraft life cycle.
- 3. Techniques to mitigate market disruption caused by climate crisis, pandemic & Black Swan events.
- 4. Reclassification process for aircraft as investment class assets for asset based financing & securitizations.
- 5. Partnerships with higher education institutions researching sustainable tecnologies to reduce aircraft engine emissions.
- 6. Reuse and rebuild strategies for scarce, earth metals, super alloys and CFC composite materials.
- 7. Business for aerospace start-ups & small companies to tool-up for low volume, high value, certified aircraft component additive manufacturing.
- Audience. We are serving the needs of innovators, credit managers, engineers, mecanics, inspectors, flight crews & strategists in airlines, airports, MROs, manufacturers, suppliers, vendors, State Economic & Safety regulatory agencies, educational & research institutions, aerospace banks, lessors, investment institutions, hedge & private investment funds, insurance underwriters, Civil Society Groups (CSGs) & local communities that make up the aircraft supply chain, the backbone of the air travel, Tourism, Energy & Aerospace industries.