key: cord-0804262-gxog4ck3 authors: Gössling, Stefan title: Risks, resilience, and pathways to sustainable aviation: A COVID-19 perspective date: 2020-09-16 journal: J Air Transp Manag DOI: 10.1016/j.jairtraman.2020.101933 sha: 07c6e149e390d781db1dd800659f343d23e9a8ed doc_id: 804262 cord_uid: gxog4ck3 This paper discusses the COVID-19 pandemic as an opportunity to reconsider the foundations of the global aviation system. There is much evidence that air transport creates opportunities as well as risks. While the former accrue to businesses and individuals, risks are imposed on society. Pandemics, in which aviation has a role as a vector of pathogen distribution, as well as the sector's contribution to climate change are examples of long-standing negative externalities that continue to be ignored in assessments of aviation's economic performance and societal importance. As commercial aviation has shown limited economic resilience throughout its history, this short paper questions whether a return to business-as-usual, supported by very significant State aid payments, is desirable. The volume growth model championed by industry and aviation proponents may have to be replaced with an alternative model of a slimmed air transport system that is economically less vulnerable and accounting for its environmental impacts. Within two years, the world has moved from debates of overtourism to discussions of measures to relaunch a global fleet of largely grounded aircraft. Air transport, in April and May 2020, was down to 10-15% of corresponding 2019 levels (IATA, 2020) . This unprecedented decline has affected all elements of the air transport value chain: aircraft manufacturers, airlines, airports, as well as associated sectors such as food services and retail. International tourism, which relies on air transport for 58% of arrivals, has come to a stand-still, with very significant negative consequences for tourism-dependent businesses and employment levels. To stabilize failing entities in the air transport value chain, billions of US$ have been allocated to airlines and airports (T&E, Greenpeace & Carbon Market Watch, 2020) , with hopes to expediently return to business-as-usual (ICAO, 2020) . Yet, the crisis is a reminder of long-standing, interrelated and unresolved problems characterizing the global air transport system. For example, aviation's growing contribution to climate change (IPCC et al., 1999; Fahey and Lee, 2016) , the sector's small and often negative profit margins (Doganis, 2005; Gössling and Higham, 2020; IATA, 2019a,b) , as well as its continued and recurring dependence on State aid (Doganis, 2005; Gössling et al., 2017) are issues that have for a long time deserved greater political scrutiny. Global air transport also increases risks, such as the spread of pathogens on global scales, within very short timeframes (Browne, St-Onge Ahmad, Beck & Nguyen-Van-Tam, 2016) . With ubiquitous policy calls to see the COVID-19 pandemic as an opportunity to rethink transport systems (e.g. ITF-OECD, 2020; Roland Berger, 2020; UNESCAP, 2020) , this paper is intended as a contribution to the discussion of risks imposed by aviation. As the air transport sector has already received very significant subsidies, debate is needed how economic vulnerabilities can be reduced and environmental sustainability be increased. Many media statements released by airlines and industry organizations have suggested that aviation is a victim of the ongoing COVID-19 pandemic, and that restarting the sector has key relevance for global tourism and trade (ICAO, 2020). However, air transport has created its own vulnerabilities, because it is a vector in the spread of pathogens and diseases on various scales. This is true from the scale of individual cases of airport malaria (Wieters et al., 2019) to the global spread of Human Immunodeficiency Virus (HIV; Flahault and Valleron, 1992) , and epidemics including SARS or MERS (Gardner et al., 2016; Ruan et al., 2006) . Air transport also increases person-to-person transmission risks of respiratory pathogens as a result of high crowd densities in enclosed spaces (Browne et al., 2016) , i.e. airports and aircraft act as incubators and nodes of disease distribution. This is of relevance because any spread of disease, particularly at global scales, is associated with a cost (e.g. Rosen et al., 2004 ) that includes prevention, research, treatment, foregone business opportunities, and recession (e.g. Lee and McKibbin, 2004 ). An associated risk is climate change, to which aviation makes a significant contribution. Globally, emissions from aviation approached one Gigaton (Gt) of carbon dioxide (CO 2 ) per year before the pandemic (IEA, 2019). The sector's contribution to global warming is even significantly higher due to changes in radiative forcing caused by short-lived emissions at flight altitude (IPCC et al., 1999) . Fahey and Lee (2016) estimate that aviation contributes close to 5% of all forcing from anthropogenic sources, i.e. significantly more than the warming from CO 2 alone (about 2.5%; IEA, 2019). With expectations of continued growth and pre-COVID-19 industry projections that the global fleet of aircraft will double between 2018 and 2040 (Boeing, 2019) , the importance of aviation as a contributor to climate change in an otherwise decarbonizing world will grow (Peeters et al., 2016) . Yet, even though these risks are well-documented, the general response has been to either ignore (pathogen/disease) or downplay (climate change) these challenges. Clearly, pathogen distribution is a cost of transportation and should be part of cost-benefit analyses, specifically as air industry lobby organizations regularly highlight "induced benefits" of aviation (AviationBenefits, 2020). To date, no global assessments of the cost of aviation-related pathogen distribution have been published. Climate change is another aspect that has essentially been ignored over the period 1997 to 2016, i.e. the year of the adoption of the Kyoto Protocol that assigned responsibility for reducing emissions through ICAO in 1997 (UNFCCC, 2018) and the presentation of CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation (ICAO, 2016). CORSIA, as industry's response to mitigation, has been met with much critique because it ignores non-CO 2 warming, sets a baseline for annual CO 2 emissions of about one Gt CO 2 that it will not be considered under the scheme, and because it focuses on cheap offsets that imply their own risks, i.e. forest-based carbon sequestration in a world more prone to wildfires (Larsson et al., 2019; Lyle, 2018; Maertens et al., 2019; Scheelhaase et al., 2018) . As a consequence, the sector's contribution to global warming will also grow, as non-CO 2 forcing increases (Lee and Sausen, 2000; Bock and Burkhardt, 2019) . The omission of these global risks is systemic, as no efforts are made to economically reflect these in balance sheets or fares. Climate change and pandemics thus represent market and policy failures in which the risk of potentially very significant future disruptions of the socioeconomic system is imposed on society. Compounding this, very significant subsidies have been extended to aircraft manufacturers, infrastructure providers and airlines throughout the history of commercial aviation (Doganis, 2005) . Subsidies are economic interventions that have taken the form of grants, equity infusions, loans and loan guarantees, reduced taxes or non-taxation (fuel, Value Added Tax, frequent flier programs) (Gössling et al., 2017) . There are also various forms of hidden subsidies, such as reduced infrastructure fees, forms of cross-subsidization or monopoly rights. Together with deregulation and productivity gains, these subsidies have contributed to capacity growth (ibid.), which in turn has led to a 60% decline in the price of air transport over the past 20 years (IATA, 2019c). Yet, profitability in the sector has been low: over the past 30 years, airlines reported operative losses in 12 years (IATA, 2009 (IATA, , 2017 (IATA, , 2019a . Even in the most profitable year in recent history, 2015, the net profit per departing passenger was just slightly above US$10, and less than the operative loss in the least profitable year, 2008, at US$ − 10.5 per passenger (IATA, 2009) . These figures illustrate that on balance, and considering the role of subsidies and State aid in crisis periods, it is questionable whether commercial aviation generates positive net results. The understanding of risks imposed by aviation on individuals (in terms of health and wellbeing) or society (in terms of climate change or the economic cost of pandemics) is equally ignored by air travelers, the aviation industry, politicians, health insurers. Notably, health concerns raised during the early phase of the COVID-19 pandemic have been rapidly been replaced by a narrative of economic necessity to re-start travel and tourism. There is much evidence that the decline in the real cost of air transport has had a wide range of negative side effects, including economic vulnerabilities (Gössling et al., 2017) . The low price of air transport induces traffic and changes the structure of global transport flows. For example, the share of international tourists arriving by air increased from less than 44% in 1998 to 58% in 2019 (UNWTO, 2000; , while the number of air passengers almost tripled in this period, from 1.5 billion (1998) to 4.2 billion (2018) (The World Bank, 2020). Yet, while air industry advocates have sought to spread an understanding that air travel is a global norm, recent research has determined that flight activity is highly skewed, as only a few percent of the world population fly internationally in a given year (Peeters et al., 2007) . North America stands out as the region that has the greatest demand for air transport. The estimate is that annual per capita transport demand in North America is about 50 times higher than in Africa, eight times higher than in the Asia-Pacific, and twice as high as in Europe (IATA, 2019a). These values denote regional averages; national distributions in demand are even more skewed. For instance, in the USA, 12% of the population are estimated to take 68% of all flights (ICCT, 2019). As Banister (2018) notes, cheaper air transport does not empower more people to fly, rather than to entice the same travelers to fly more. This has implications for climate change. Very frequent fliers, who may fly hundreds of thousands of kilometers per year, often in private aircraft, can emit thousands of tons of CO 2 per year. In the most extreme cases, their air travel may contribute ten thousand times more to global warming than the overall consumption of a person living in poorer nations (Gössling, 2019) . This raises the question of how much air transport is really needed. Growing evidence suggests that air transport 'wants' are weakly correlated with 'needs'. For example, students assign very different values to individual flights, rating a significant share as having "limited" or "no importance at all" . The issue is perhaps even better illustrated by the 'flourishing' and 'floundering' business traveler types identified by Hanna et al. (2018) . Floundering air travelers would like to fly less, yet consider themselves forced to constantly travel. In contrast, air travel is related to identity, lifestyle and career advancement for the "flourishing" flyer type, which also explains the propensity for mileage runs among certain travelers (Gössling and Nilsson, 2011) . Equally important are energy intensities. The World Bank (2013) estimates that the carbon footprint of a premium class flight is three times (business) and nine times (first class) larger than a flight in economy class. This illustrates interrelationships and dilemmas of energy use and emissions, transport demand, and the distribution of risks and their cost. Ignoring these issues, the industry response has been to demand State aid and a return to business-as-usual, not even considering alternative business models. For instance, a business model focused on profitability rather than revenue could eliminate much air travel and yet increase the sector's profit margins. In a situation of reduced supply, limited, for instance, by the amount of carbon the sector is allowed to emit, growing demand should significantly increase willingness to pay for transport services. As the preceding sections highlight, there is reason to critically discuss the development of the global air transport system. Crises of the past, including the global financial crisis in 2008, have shown that there is a potential for quick rebounds. IATA (2020) expects that the recovery after COVID-19 will take longer, but a return to business-as-usual is expected nevertheless. Is this desirable from an integrated socio-environmental-economic viewpoint? The evidence is that a) aviation is responsible for very significant negative externalities imposed on society; b) demand is to a considerable degree induced, on the basis of very low fares; and c) the air transport system continues to focus on volume-growth strategies with small profit margins. The future vulnerabilities this implies should be obvious. As consultants to industry and governments affirm (McKinsey & Company, 2020), COVID-19 has many similarities to climate change: The risk of global warming is systemic, nonstationary, nonlinear, requiring a focus on longer-term resilience, and characterized by market failure. It may be added that in contrast to COVID-19, climate change risks accumulate over time, are permanent, and will be very disruptive and irreversible when reaching tipping points (IPCC, 2018; Lenton et al., 2019) . Contrary to COVID-19, climate change risks are well described in recurrent documentations, the IPCC reports, available since the 1990s. There is also a principal global consensus, the Paris Agreement on decarbonization, as a common goal for humanity (UNFCCC, 2019) . Against this background, it is of interest to consider the implications of plans to extend State aid to the air transport value chain. Aircraft manufacturers, airlines and airports have already received considerable and often unconditional support. The Airline Bailout Tracker published by T&E, Greenpeace and Carbon Market Watch (2020) suggests that in Europe, agreed bailouts now total €12.9 billion, with another €17.1 billion under discussion. In the USA, US$25 billion in loans and US$25 billion in grants have been made available to passenger airlines; US$8 billion to cargo carriers; and US$3 billion to airport contractors (Reuters, 2020a). Up to US$13 billion are accessible by Singapore Airlines (Reuters, 2020b) . At the end of May 2020, the total volume of State aid may have exceeded US$100 billion, i.e. almost half of what global airlines reported as their net result over nine years, i.e. for the entire period 2010 -2018 IEA, 2019) . In other words, State aid now extended to airlines to ensure their survival is equivalent to the profits that may be made over many years, notably in the absence of further disruptions, and without considering the cost of negative externalities. As proposed by Banister and Hickman (2013) , it is important to "think the unthinkable", i.e. to consider longer-term transportation scenarios that embrace possibility, plausibility and desirability. It may be argued that air transport futures have been discussed mostly in terms of "possibility", and less in terms of plausibility or desirability. "Possibilities" are framed economically, and by a limited number of actors, the proponents of volume growth. There is a notable absence of any discussion of alternative pathways. Yet, most stakeholders in industry and policymakers would agree that it is desirable for aviation to become more resilient financially and more sustainable climatically. It would seem that for this to happen, very radical changes are necessary in terms of measuring economic performance, the progress and potential of technology change, and the limits to sustainable transitions implied by a rapidly growing transport system (Gössling and Higham, 2020) . In conclusion, this discussion has revealed unsurmountable conflicts inherent in the proposition of continued volume growth and a reduction in risks and vulnerabilities. Hence, a reorientation is necessary that includes the possibility of a shrinking of the global air transport system to increase its desirability for society. It is also plausible. COVID-19 has forced many airlines to reduce their fleets, retire old aircraft, or stop serving long-haul destinations. Airlines have gone bankrupt (Flybee, South African Airways, Eurowings), or entered Voluntary Administration (Air Mauritius, Virgin Australia) (TTRWeekly, 2020). As a result, air transport capacity is diminished. Further reductions in capacity may be achieved by reducing subsidies. This should affect low-cost carriers such as Ryanair, an airline sometimes offering transport at a price below the cost of fuel, while counting among the European Union's top 10 greenhouse gas emitters (The Guardian, 2019) . A scenario for a resilient aviation system should have a starting point in the question of how much air transport is needed; here, the COVID-19 pandemic leaves much room for critical reflection. A desirable aviation system is also one where risks are accounted for, and where their cost is part of the price paid for air travel. In a situation of reduced supply, there should be an opportunity for airlines to increase profitability. COVID-19 thus offers an opportunity to rethink global air transport. Many questions, such as those addressing volume growth, the sector's reliance on State aid, its unresolved environmental impacts, and hence the basic assumptions on which aviation operates, will be difficult to ask. However, risks and vulnerabilities have to be weighed against short-term benefits, if the sector's future resilience is to improve. 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