by Vadim Bespertov, et al. 

This document is the production of a team of aviation and aerospace industry experts who have joined efforts and know-how for a 4 month strategic planning & research exercise as a part of the HEC Executive MBA – Major in Aviation program*. 

This document is the production of a team of aviation and aerospace industry experts who have joined efforts and know-how for a 4 month strategic planning & research exercise as a part of the HEC Executive MBA – Major in Aviation program*. 

This document is the production of a team of aviation and aerospace industry experts who have joined efforts and know-how for a 4 month strategic planning & research exercise as a part of the HEC Executive MBA – Major in Aviation program*.This document is the production of a team of aviation and aerospace industry experts who have joined efforts and know-how for a 4 month strategic planning & research exercise as a part of the HEC Executive MBA – Major in Aviation program*.

In the light of the growing interest over the past ten years in the environmental impact of air transportation, we looked for a study subject that would concern the whole industry, reshape existing business models and create new opportunities while being very topical. We chose to focus on the consequences of the European Union directive to include the aviation sector into the European Union CO2 Emissions Trading Scheme from 2012. We have tried to analyze both the context and the impact of this regulation on the aviation sector and raise strategic recommendations to stakeholders while identifying potential new business opportunities which remain confidential at this stage.

Input for this report comes from interviews with IATA (International Air Transport Association) executives and the French representative at ICAO (the United Nation body who internationally regulates Civil Aviation). We also interviewed key consultants in the industry and have digested numerous documents, articles and studies. With the perspective of the upcoming 15th meeting of the Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC) in Copenhagen in December 2009, the ICAO declaration of 09 October 2009 sets the stage for future development towards a global sectorial approach of CO2 emissions reduction. This approach is backed up by IATA, CANSO, ACI and other international institutions of the aviation sector. However this might not be sufficient to counter other participant approaches such as bilateral agreements which the United States are working on with countries like China and India. Unfortunately to date such approaches have deadlocked without reaching consensus.

Though much will depend of the outcomes of the Copenhagen conference, we can expect the European Union directive to remain the sole international environmental regulation in force in the short term, thus shaping for the better or for the worse this complex business sector.  READ MORE