Aviation Division

The Aviation Division comprises significant investments in the Cathay Pacific group and the Hong Kong Aircraft Engineering Company ("HAECO") group. The Cathay Pacific group operates its own airlines and cargo terminal and has interests in other airlines and in companies providing flight catering and ramp, passenger and cargo handling services. The HAECO group provides aviation maintenance and repair services.

The Cathay Pacific group includes Cathay Pacific, its wholly owned subsidiary Hong Kong Dragon Airlines Limited (“Cathay Dragon”), its 60%-owned subsidiary AHK Air Hong Kong Limited (“Air Hong Kong”), an associate interest in Air China and an interest in Air China Cargo Co. Ltd. (“Air China Cargo”). Cathay Pacific also has interests in companies providing flight catering and ramp and cargo handling services, and owns and operates a cargo terminal at Hong Kong International Airport.

The HAECO group provides aviation maintenance and repair services. Its primary activities are aircraft maintenance and modification work in Hong Kong (by HAECO Hong Kong), in Xiamen (by HAECO Xiamen) and in the USA (by HAECO Americas).

PERFORMANCE HIGHLIGHTS
HEALTH & SAFETY
26%
Cathay Pacific group:
Lost day rate reduction in 2016 compared with 2015
TRAINING
64.17
HAECO group:
Average hours of training per employee in 2016
ENERGY
24.9%
Cathay Pacific group:
Fuel efficiency increase since 1988
ENERGY
58.8
Solar panels at HAECO Xiamen generated enough renewable energy in 2016 to power 58.8 Homes (~793MWh)
EMISSIONS
7%
HAECO group:
Reduction in CO2e emissions compared with 2015
WASTE
~90%
Three Airbus A340-300s retired in 2016 were sent to a recycling facility in France, ~90% of their components were recycled, reused or recovered
COMMUNITY
1,300
Cathay Pacific Staff volunteered 1,300 hours of service in 2016
COMMUNITY
HK$6.6M
donated to good causes by all companies in the aviation division in 2016

Group Level Material Topics

Performance in relation to the material topic which is highly significant at a group level is shown below:


 

Emissions

The use of non-renewable fossil fuels is a major operating cost and has a significant environmental impact. In 2016, emissions from our Aviation Division accounted for 96% of our total emissions, mostly from burning jet fuel.

Cathay Pacific aims to reduce its carbon emissions and to mitigate the impact that they have on the environment. Increasing fuel efficiency (including by buying more fuel-efficient aircraft) and using biofuels are key ways to achieve this aim.

Cathay Pacific aims to improve fuel efficiency by 2% per annum up to 2020, and to achieve carbon neutral growth thereafter. This exceeds the agreed aviation industry target of 1.5% per annum. Cathay Pacific intends to do this by following IATA’s four pillar strategy (see http://www.iata.org/policy/environment/pages/climate-change.aspx).

In 2016, Cathay Pacific increased fuel efficiency by 1%, principally as a result of using more fuel efficient aircraft. Ten Airbus A350-900 aircraft were delivered in 2016. These aircraft are 25% more fuel efficient than the existing wide-body fleet, with corresponding reductions in CO2 and NOx emissions.

Fuel saving initiated by the The Flight Efficiency Working Group by the following:

  • Regular engine core washing removes contaminants that reduce engine efficiency. It has saved fuel equivalent to 105,700 tonnes of CO2 since 2010.
  • Reduced use of engines when taxiing saves fuel equivalent to 21,900 tonnes of CO2 per year.
  • Lighter food carts and cutlery have saved fuel equivalent to 78,460 tonnes of CO2 per year since 2004.

In 2016, HAECO’s emissions amounted to 105,000 tonnes of carbon dioxide equivalent (CO2e), a reduction of 7% from 2015. Electricity consumption accounts for approximately 74% of the HAECO group’s emissions. Energy audits are carried out every five years in order to look for opportunities to save energy.

Fueling the Future

Cathay Pacific aims to use biofuels to power its aircraft engines and vehicles. The first Cathay Pacific flight powered by biofuels arrived at Hong Kong airport in May 2016. With a flight distance of nearly 10,000km, at the time this was the world’s longest biofuel flight. All delivery flights of Cathay Pacific’s Airbus A350-900 aircraft use a 10% blend of biofuel. Cathay Pacific is a member of the Round Table on Sustainable Biomaterials and of the Sustainable Aviation Fuel Users Group Asia.

Cathay Pacific has a minority interest in Fulcrum BioEnergy, Inc., a company based in the United States which converts municipal solid waste into sustainable aviation fuel. Construction of the first phase of Fulcrum Bioenergy’s first commercial scale plant was completed in May 2016. Construction of the second phase of the plant is scheduled to begin later this year.

Carbon offsetting

In 2016, under Cathay Pacific’s FLY greener carbon offset programme, 14,400 tonnes of CO2 were offset by investments in third-party validated, Gold Standard certified projects including wind farms in Taiwan and clean biomass stoves in Mainland China.

Cathay Pacific is a member of the Global Market-based Measure Technical Task Force (GMTF). GMTF is made up of representatives of the International Civil Aviation Organisation’s (ICAO) member states, industry and non-governmental organisations. It deals with market based measures intended to reduce or offset the effect of carbon emissions by the aviation industry.

More information on sustainability matters related to the Aviation Division can be found in other sections of this report and in the individual companies’ sustainable development reports, which can be found here.


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