Tackling Climate Change

As climate change gains prominence as one of the most important issues on the global agenda, the aviation industry will continue to face increasing scrutiny on actions to mitigate its environmental footprint.

As the effect of the pandemic on air travel continued to dominate in 2021, AirAsia's overall carbon emissions fell for a second year in a row. Our carbon emissions dropped by more than 90% compared to pre-pandemic levels.

However, we recognise that the situation will reverse once the travel industry recovers. In 2021, we conducted a robust reassessment of our climate strategy to strengthen AirAsia's commitment to align ourselves with the aviation industry's ambitious goal to reach net zero by 2050. Based on existing technologies, we identified four main approaches for AirAsia to converge towards net zero.

Our climate change strategy builds on an established track record of efficiency that saw AirAsia ranked among airlines with the lowest carbon intensities in the world. Between 2017 and 2019, we exceeded IATA's recommendation of 1.5% annual reduction in carbon intensity measures. However, our progress was impacted by changes to our network caused by Covid-19 measures. Over the last two years, carbon intensity rose again as a result of shorter flight lengths.

As the industry recovers, we expect our emissions intensity to revert to pre-Covid levels as the pandemic becomes endemic and more countries begin easing international travel restrictions. Taking focus on this, we made important progress in four emission reduction areas to converge to net zero.

Recognising this, new investments in 2022 will see AirAsia add at least six new fuel-saving initiatives.

3. Carbon Offsetting

AirAsia has met two key requirements under ICAO's Carbon Offset and Reduction Scheme for International Aviation (CORSIA). In May 2021, all our airlines submitted independently verified carbon emissions reports for the year 2020.

We also conducted a stakeholder survey on the preferences of the types of carbon projects and will focus our efforts on offsetting on the following projects.

In line with industry best practice, we are in the process of putting in place a scheme to enable offsetting by travellers by the second half of 2022. This early implementation will enable us to build internal capacity to navigate carbon markets to procure CORSIA eligible credits.

4. SAF Strategy

To pave the way for SAF introduction, we formed an SAF Committee to assess the operational and financial feasibility of SAF implementation.

The committee confirmed:

• The absence of any technological barriers to SAF utilisation
• A320 family of aircraft are certified to fly with a blend of up to 50% SAF
• No investment in new infrastructure for fuel supply needed

In Malaysia, AirAsia was invited by the Ministry of International Trade and Investment to join its newly established Task Force for the Exploration of Sustainable Aviation Energy Sources in April 2022. The role of the task force to identify gaps and issues relating to the exploration of sustainable energy sources and develop policy recommendations that would address these gaps.

Waste Management

Capital A strives to reduce as far as possible all waste generated from our operations. To reduce waste to landfill, the Group has set to cut 25% of perishable meals through our latest demand planning tool and by encouraging our passengers to pre-book their meals. To step up our efforts in line with the UN SDG 12 on responsible consumption and production, we are in the midst of developing a robust waste management framework and waste dashboard. Airasia has also been promoting circular economy principles by upcycling its old lifejackets into lifestyle products.

To improve our environmental reporting, we have included our ground operations emissions into Scope 1. Mirroring the reduction in number of flights due to the pandemic, our Scope 1 emissions has reduced significantly.

Our scope 2 emissions, which corresponds to electricity consumption also decreased by 11% in view of reduced operational activities and work from home arrangements.

In addition to our sustainability initiatives (staggered switching for power intense equipment, scheduled light usage by zone, low-water use facilities), we continued to further reduce our resource consumption as most of our employees were working remotely.