Etihad CEO Sees a More Existential Threat than Covid

 - May 26, 2021, 2:57 PM

The need to address sustainability is more relevant to aviation’s long-term survival than recovery from the pandemic, and governments and regulators should introduce incentives rather than punitive measures to embed good environmental practices in the industry, according to Etihad Aviation Group CEO Tony Douglas.

Speaking Wednesday during the latest in a series of Eurocontrol Straighttalk sessions, Douglas called a failure to properly deal with sustainability “a more existential threat” to aviation than the Covid-19 crisis because it requires a medium- to long-term endeavor, not just a short-term adjustment. Several airlines have gone into administration due to Covid and the relating travel restrictions, and more will likely follow. “Our opinion is that more airlines in the fullness of time will fail as a result of their inability to embrace the reality of what we all have to do: collaborate to improve the longer-term sustainability of commercial aviation,” said Douglas.

The Etihad CEO said he expects airlines will see increasing pressure from governments and regulators to meet sustainability goals. “Those that haven’t been a thought leader in this space will probably end up punishing themselves…rightly so,” he stressed. Etihad has fully embraced the sustainability challenge, he added, pointing to the airline’s industry-leading role with two parallel projects using Boeing 787s—the Etihad Greenliner program in cooperation with Boeing and GE to test new green technologies, including the use of sustainable alternative fuels (SAFs) and eco-friendly in-flight products, and the ecoDemonstrator.

The ecoDemonstrator aircraft, a 787-10 registered A6-BMI, acts as a flying testbed to accelerate technological developments in partnership with Boeing, NASA, and Safran Landing Systems, with the goal of making commercial aviation safer and more sustainable. “The Greenliner holds the world record for long-range flying with [a blend of] of 50 percent SAF,” he said, adding that the airline is “big” on working with a number of fuel companies on hydrogen and e-fuels.

Industry and regulatory partnerships are essential to achieving sustainability objectives, emphasized Douglas, as he criticized proposals by some governments to tax kerosene. “Particularly now, I struggle with the concept,” he said. “At the very moment when the industry requires bailing out, the idea of taxing [aviation fuel] is quite ridiculous.”

Instead of resorting to punitive measures, governments should encourage long-term commitments to sustainable practices and SAF through incentives, added Douglas. “I observe with great interest that the incoming Biden administration has already introduced a policy that will look to provide incentives for a progressive use of SAF,” he said.

Douglas assumed his role with the Abu Dhabi, UAE-based Etihad Aviation Group in January 2018 and has steered the company through a painful restructuring to halt the losses caused by the aggressive expansion strategy of his predecessor, James Hogan. As part of the process, the airline is positioning itself as what Douglas calls a “midsized boutique carrier” operating just two widebody types, the 787 and the Airbus A350-1000. Douglas last month revealed that Etihad will stop operating its 777-300ERs before the end of the year and retire its Airbus A380s in line with a new operating model designed to return the carrier to profitability by 2023.