The Impact of Technology and Bio-Jet Fuel on Flight No doubt the world has changed drastically as it weathers through an unprecedented global pandemic of COVID-19. Aviation, which has connected the world since 1914, has never faced such a worldwide effect. The resilience of the aviation industry is well-known, with over 4.723 billion passengers flown in 2019, supporting the world’s gross domestic product by USD 2.7 trillion (3.6%), and before COVID-19, having a prospective CAGR of 3.5% to 2037 (Source: IATA). However, the global scene has changed, and virtually all industries are strategizing their respective recovery plan to what it can be ascertained as the “new norm”. To recover, aviation requires a coordinated approach combining political, social, and technological drivers. With respect to the aerospace manufacturing and MRO sectors, key recovery indicator is almost singlehandedly determined by the return of passengers, which is the same for airlines because passengers volume determine frequency hence regular maintenance to keep aircrafts in good working condition when operating in the sky. Even the current lowoil price has almost no effect to airlines because great majority of planes of any airlines are grounded due to substantial low passenger demand due to the travel restrictions imposed by all countries in the world. The aviation consultant CAPA warned that "most" of the world's airlines could be bankrupt by the end of May, due to the ongoing coronavirus pandemic. Several airlines in the United States and United Kingdom have filed for bankruptcy, closer to home, Virgin Australia, and Thai Airways have taken similar action. IATA estimates that airlines globally will lose at least $314 billion due to the outbreak.
The COVID-19 pandemic has also placed the goals of the aviation industry in question. Back in 2009, the International Air Transport Association (IATA) began the journey to decrease the environmental impact of the aviation industry. This came to a committed roadmap by the aviation industry in 2013 to: (i) Improve fuel efficiency by 1.5% per annum; (ii) Carbon Neutral Growth (CNG) by 2020; and by 2050, a 50% reduction in net aviation CO2 emission by the industry (from 2005 levels). More recently, the CNG by 2020 goal is realised through the global implementation of CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), a United Nations initiative (Source: Annex 16, 2018). Malaysia, as a member of the CORSIA initiative, has prepared itself since the launch in 2018, including better monitoring of emissions, carbon accountability, and more ambitiously, to enable Malaysia bio-jet fuel to be produced locally. As of the beginning of 2020, the CORSIA initiative covers more than 87% of international aviation activities, which equates to over 80% of the industry’s greenhouse gas emissions. However, the impact of COVID-19 due to low passenger traffic, lower fuel demand, and cheaper oil (fuel) price will impact the overall CORSIA implementation through to 2035.
With low oil prices, the demand for biofuel in general decreases, due to price competitiveness and availability. Biofuel production output is lower than traditional fossil-based fuel, and the prices of biofuels tend to be either subsidised or are above traditional fuels. The drop in oil price increases the price gap with biofuel and puts additional strain onto the government via subsidisation. At the time of COVID-19, where governmental fiscals are focused on stimulus packages for social health protection and recovery, and economic recovery, bio-fuel subsidisation will be at risk.
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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology
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