Green Across CanadaConsultingDavid BoisseleauCédric G.-DucharmeFrédéric LarivièreSimon TurcotteAir Canada BioFuels
GAC Consulting
GAC ConsultingRarity of petroleum resourcesIncrease fuel costCarbon taxIndustry ChangesProblematicEconomicEnvironmentGloba...
GAC ConsultingAviationIndustryRegulationsNew EnergySourcesCarbon TaxGreenawareness ofconsumersGlobalMidClassIncreaseAltern...
GAC Consulting12B$ Revenue178 Destinations, 2/3 Local205 AircraftsNew CBABest N.A. Airline (awards)-40% CO2 emissions/flig...
GAC ConsultingWHAT CAN BIOFUELSDO FOR AIR CANADA?IS IT PART OF THESOLUTION?
GAC ConsultingCanadian Biodiesel Capacity284Ml/yr (2011) –> 598Ml/yr (2012)Subsidies in Canada and WorldwideObjectives 202...
GAC ConsultingCompetition2009/01Continental Airlines’ First Biofuel flight2010/04United Airlines’ First Biofuel flight2012...
GAC ConsultingSupply availabilityApproval ASTMD7566GHG EmissionPublicEmploymentBiofuelSocialEnvironmentEconomySustainable ...
GAC Consulting“If the airlines need alternative fuels, wantalternative fuels, and we‟ve flown aircraftwith them, why then,...
GAC ConsultingFeasiblity - ProductionTechnical Requirementfor Jet-EngineAvailibiltyin CANet Carbon Footprint Socio-Economi...
GAC ConsultingDevelop NextGen biofuel and increase efficiencyPrivate Investments(Engine and Aircraft Manufacturers, Petroc...
GAC ConsultingHypotheses: Jet fuel: $0.86/L ($3.22/gal) Biofuel: $1.32/L ($5/gal) Equivalent energy densityBiofuel rati...
GAC ConsultingGlobal DiscussionSupply security and product safetyInternational technical standards(type : ASTM , RED, RFS)...
GAC ConsultingSupply ChainSecure and reliable supply- Feedstock suppliers: open to adapt ?Geographically adequate ?- Trans...
GAC ConsultingPossible Alternatives Stand still (status quo) Secure supply by purchasing an energy producer Purchase ca...
GAC ConsultingGoal: Few aircrafts (1-3) on short, busy routes; 20% blend Visibility, branding, concept proofingImplementa...
GAC ConsultingGoal: Biofuel mix supply at major local airports 5% blendImplementation: Local standardization Biofuels: ...
GAC ConsultingGoal: Reach full potential on 2nd gen. biofuels 20-50% blendImplementation: Global Rollout Biofuels: 700M...
GAC ConsultingCommunication: Visibility and rebrandingPR: Reach the public, politicians, industryVisual: Green planes, web...
GAC ConsultingTo reach 40% C02 reduction Aircraft technology: Weight reduction (1Kg = xx ton CO2) Aerodynamics Engines...
GAC ConsultingTHE ROAD AHEADNow: High cost Limited supply and impact on emission reduction Success requires long term c...
GAC ConsultingDETERMINATION, VISION, LEADERSHIPWright Brothers,1903
Green Across CanadaConsultingDavid BoisseleauCédric G.-DucharmeFrédéric LarivièreSimon TurcotteQuestions ?
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Air Canada Strategy - Sustainability Challenge Case Competition HEC Montréal

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Presentation about Air Canada and BioFuels strategy for a Case Competition at HEC Montréal, Canada
Team : Green Across Canada

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  • Interdependance
  • Changement dans l’industrie, fusion, croissance ou decroissance des clients etcCommunication sur le Global warming -> conscience des citoyens –  > pressions
  • Mid Class : 1.8B -> 4.9B
  • 7 differentsFederal Programs + Province Programs to encourage Renewable Fuels IndustryMade by BC,AB,SK,ON to include minimum 2% of biodiesel by 2011/2012
  • Ajouter sources
  • Economic Values = Job creation, management of lands, water supply, food stock …
  • 3.22 moyenne pour février 201335% short of the target of 40% with current biofuel technology
  • SWAFEA : EuropeanSutainableWays for alternatives fuels and energy in aviation
  • Adaptation : management des sols, formation, technologies, main d’œuvreConversion suppliers : interessé pour integrer leurs productions seulement si $$$
  • target: maximize visibility (YUL)
  • target: maximize visibility (YUL)lobbying: common front
  • target: maximize visibility (YUL)lobbying: common front40% reduction target
  • Now:High costLimited supply and impact on emission reductionSuccess requires long term commitment:Air Canada cannot
  • Now:High costLimited supply and impact on emission reductionSuccess requires long term commitment:Air Canada cannot
  • Air Canada Strategy - Sustainability Challenge Case Competition HEC Montréal

    1. 1. Green Across CanadaConsultingDavid BoisseleauCédric G.-DucharmeFrédéric LarivièreSimon TurcotteAir Canada BioFuels
    2. 2. GAC Consulting
    3. 3. GAC ConsultingRarity of petroleum resourcesIncrease fuel costCarbon taxIndustry ChangesProblematicEconomicEnvironmentGlobal warmingNew Local and international regulations
    4. 4. GAC ConsultingAviationIndustryRegulationsNew EnergySourcesCarbon TaxGreenawareness ofconsumersGlobalMidClassIncreaseAlternativeTransportationEcotourismTelecomOil producersAirportsMFG : EngineAircraftDistributionNetworkForces and Threats
    5. 5. GAC Consulting12B$ Revenue178 Destinations, 2/3 Local205 AircraftsNew CBABest N.A. Airline (awards)-40% CO2 emissions/flight with BiofuelContinuous commitment towards environmentOperation Cost ControlEmployees empowermentInnovation leadershipLEAVELESS Program3 signed agreements with Oil Producers(RenTech, Altair Fuels, Solena Fuels)Air Canada : Leaveless ProgramGoals and Objectives of AC2012
    6. 6. GAC ConsultingWHAT CAN BIOFUELSDO FOR AIR CANADA?IS IT PART OF THESOLUTION?
    7. 7. GAC ConsultingCanadian Biodiesel Capacity284Ml/yr (2011) –> 598Ml/yr (2012)Subsidies in Canada and WorldwideObjectives 2020 for AviationIATA : 6%, E.U 4%ICAO : Leadership on global regulationMultiple R&D Programs,Various Oil Producers InvestmentsIncreased consumption of other industries(Petrochemical…)KD Communications 2011 – K&T.Daynard050100150World U.S Brazil GermanyBiofuel Production (BLitre)Current situation of Biofuel MarketR.Branson CEO Virgin
    8. 8. GAC ConsultingCompetition2009/01Continental Airlines’ First Biofuel flight2010/04United Airlines’ First Biofuel flight2012/06Air Canada’s First Biofuel flight2012/04Porter Airlines’ First Biofuel flight2011/07Virgin Airlines’ Partnership to develop new feedstock2010/01 Quatar Airlines Partnership to develop technology andsupplyMore than 30 Airlines trialing and deployingbiofuelsFirst FlightFirst Dev
    9. 9. GAC ConsultingSupply availabilityApproval ASTMD7566GHG EmissionPublicEmploymentBiofuelSocialEnvironmentEconomySustainable Viability
    10. 10. GAC Consulting“If the airlines need alternative fuels, wantalternative fuels, and we‟ve flown aircraftwith them, why then, don‟t we have them?”Glenn F. Tilton, Chairman,President and CEO of United Airlines
    11. 11. GAC ConsultingFeasiblity - ProductionTechnical Requirementfor Jet-EngineAvailibiltyin CANet Carbon Footprint Socio-EconomicValueNon edibleOils +++ + +++ +++Edible Oils --- +++ +++ --Animal Fats +++ + +++ +++Energy Crops --- +++ +++ --AgriculturalResidues---(Ok only 3rd gen)+ +++ +++Woodybiomass---(OK only 3rd gen)+ +++ +++MSW TBD + +++ +++Offer Demand InfluenceAgriculturalForestryPetrochemicalRefineryPlastic IndustryTransport IndustryGovernmentLocal AdministrationNGOProduction needs to increase
    12. 12. GAC ConsultingDevelop NextGen biofuel and increase efficiencyPrivate Investments(Engine and Aircraft Manufacturers, Petrochemical, Oilproducers, feedstock producers)Government InvestmentsAlliance between organizations (BioFuelNet)Information sharing across all stakeholders,Formulation common objectivesR&D and Innovation
    13. 13. GAC ConsultingHypotheses: Jet fuel: $0.86/L ($3.22/gal) Biofuel: $1.32/L ($5/gal) Equivalent energy densityBiofuel ratio 0% 5% 20% 50%% GHG reduction 0% 3.5% 14% 35%Additional fuel costs - $93M $371M $927MCarbon tax effect $97M $93M $83M $63MTotal additional costs $97M $186M $454M $990M GHG reduction for pure Biofuel: 70% AC Fuel usage at 2011 level (3.9B L) Carbon tax fuel cost break even point: $0.02/L For Jet Fuel at $0.86/L, biofuels are profitable at $0.88/LScenario Analysis
    14. 14. GAC ConsultingGlobal DiscussionSupply security and product safetyInternational technical standards(type : ASTM , RED, RFS)Strong aviation industry presence in MontréalBiofuels life cycle and GHG Emission reduction objectivesMutual recognition between countriesGovernment Global OrganizationsCanada, EU, US,ASIAICAO, IATA, ,SWAFEA,NGOsKey PlayersGlobal consensus
    15. 15. GAC ConsultingSupply ChainSecure and reliable supply- Feedstock suppliers: open to adapt ?Geographically adequate ?- Transportation and Distribution : Is currentequipment compatible and sufficient ?- Conversion Suppliers : Capacity andwillingness to incorporate biofuels ?- Airports : Infrastructure adaptation- Abroad supply chain ?Increase communication andcooperation between stakeholdersContinuous improvement
    16. 16. GAC ConsultingPossible Alternatives Stand still (status quo) Secure supply by purchasing an energy producer Purchase carbon credits Other sources of energy? No other serious options at the moment
    17. 17. GAC ConsultingGoal: Few aircrafts (1-3) on short, busy routes; 20% blend Visibility, branding, concept proofingImplementation: Partnerships with suppliers Biofuels Immediate local availability (recycled oils) Avg. 3.8M L / yr / aircraft 0.64% of actual Canadian production / aircraft Aircraft and engine manufacturers Technology, optimization, wear Airports Storage, dispensing (trucking)Recommandations – Short Term2013 2014PILOT
    18. 18. GAC ConsultingGoal: Biofuel mix supply at major local airports 5% blendImplementation: Local standardization Biofuels: Integrate supply chain Secure >200M L / year supply Lobbying; subsidies, incentives; common front Distribution Adapt existing transport/storage infrastructure Outsource blending to jet fuel refiners (ISO) 3.5%GHG reduction  32% CAN biofuels2013 2017Recommandations – Mid-TermEXPANSION
    19. 19. GAC ConsultingGoal: Reach full potential on 2nd gen. biofuels 20-50% blendImplementation: Global Rollout Biofuels: 700M – 2B L supply annually Lobbying; subsidies, incentives; common front Airports: Integrated distribution at all major destinations (intl.)Beyond: Integrate 3rd gen. biofuels to reach >50% blend Maximize GHG reduction, >40% CO2 14 – 35 %GHG reduction2013 2023Recommandations – Long TermGHG Reduction
    20. 20. GAC ConsultingCommunication: Visibility and rebrandingPR: Reach the public, politicians, industryVisual: Green planes, website, airport displaysPartnership : Integrate with Aeroplan and create greenmiles programThe New Air Canada BrandAir Canada is a Green Pioneer Early adopter of biofuels The environment conscious airline of choice Create a „Canadian Green Belt‟ linking all majorcities with biofuel powered flights coast-to-coast.Marketing
    21. 21. GAC ConsultingTo reach 40% C02 reduction Aircraft technology: Weight reduction (1Kg = xx ton CO2) Aerodynamics Engines efficiency Fuel flexibility Flight control operators: Optimize flight routes, take-off / landing procedures Government: Stringent emission standards Carbon regulationFuture Outlook
    22. 22. GAC ConsultingTHE ROAD AHEADNow: High cost Limited supply and impact on emission reduction Success requires long term commitment
    23. 23. GAC ConsultingDETERMINATION, VISION, LEADERSHIPWright Brothers,1903
    24. 24. Green Across CanadaConsultingDavid BoisseleauCédric G.-DucharmeFrédéric LarivièreSimon TurcotteQuestions ?

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