130 O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT On top of the measures Thai AirAsia has been employing over the past years, in the fourth quarter of 2022, the Company adopted a new technology to further enhance its flight efficiency. Descent Profile Optimisation, or DPO reduces fuel usage by an average 32 kg per flight (101 kg of CO2). The technology is expected to be installed in all Thai AirAsia A320 NEO aircraft by the end of 2022, reducing the carrier’s CO2 emissions by 2,070 tonnes/year. While the number of Thai AirAsia flights in 2022 was still only one third of 2019, the year prior to the COVID-19 pandemic, resulting in fuel usage and CO2 emissions being 65 percent less than normal circumstances, alleviation of the COVID-19 situation, relaxed government restrictions, improved confidence in air travel and higher passenger numbers since the start of the year initiated a normalisation of Thai AirAsia’s Load Factor. This resulted in a significant fall in the Company’s Carbon Intensity Ratio (gCO2/RPK) from 2021 and Thai AirAsia being able to reduce its Carbon Intensity Ratio as targeted to 3gCO2/RPK/year. State Action Plan on Energy Conservation and the Reduction of Carbon Emissions by the Aviation Sector In addition to its internal targets, Thai AirAsia joined in discussions with CAAT and other relevant agencies to draft the State Action Plan for Thailand to achieve Net Zero Carbon by 2050. In support of this plan, CAAT issued a variety of policy and practical measures, including supporting the adoption of Sustainable Aviation Fuels in Thailand and a domestic carbon credit system for offsetting through sale or exchange in accommodation of airlines participating in CORSIA. Sustainable Aviation Fuels (SAF) While ICAO supports an appropriate proportion of Jet A-1 fossil fuels being replaced by Sustainable Aviation Fuels (SAF) by 2050, as SAF reduces carbon emissions by 80 percent compared to JET A-1 fuel. At present, the main obstacles to SAF utilisation by Thai AirAsia is its high price and non-availability at Thai airports. The 2-3-fold cost of SAF compared to JET A-1 fuel at present has deterred carriers across the globe from switching to SAF for commercial usage. However, as part of AAAGL, Thai AirAsia will leverage on group economies of scale as purchase volume is one of key factors determining SAF pricing. Thai AirAsia also participated in multiple engagements with the AAAGL regional team and civil aviation authorities to gain a broader overview of SAF production and distribution plans in ASEAN. This exercise enabled Thai AirAsia to identify airports where SAF may be purchased should our management team decide to commence SAF utilisation or should national policies be introduced to advance the use of biofuels in the aviation industry in Thailand. In addition, several Thai private organisations began investing in the production of SAF in 2022 to meet growing demand. This has made Thai AirAsia see SAF adoption for commercial use as a possibility. The carrier began preparations for adoption by reviewing information provided by the manufacturer of its fleet’s main aircraft, the Airbus A320, discerning that a 50:50 SAF to jet fuel ratio would be feasible for the model.
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