Skift Senior Aviation Business Editor Brian Sumers writes this column with a critical eye on the important global issues impacting the airline industry, from the middle seat of the last row in economy class to the boardrooms of the world's largest carriers.
In a Las Vegas hotel ballroom a couple of months ago, Frontier Airlines CEO Barry Biffle promised to reveal how he had solved a question vexing airlines: How to build an environmentally sustainable business without sacrificing profits.
Calling Frontier “America’s Greenest Airline,” Biffle explained it would buy the newest airplanes, cram them with seats, and fly them longer each day than competitors. Inside, Frontier would offer zero amenities — no Wi-Fi, in-seat power, or entertainment — while charging extra for everything, including baggage, food and sodas.
“Look, it is not the most comfortable for a couple of hours,” Biffle told hundreds of industry insiders, “but it is the most comfortable that you will find for the planet.”
The world is facing a climate change crisis, and Biffle essentially mocked it, repackaging the airline’s existing model, and congratulating himself for environment stewardship. Yes, packing on spartan (and light) seats reduces per-passenger emissions, but Biffle, a former Spirit Airlines executive, loved that strategy well before most travelers worried about sustainability. It saves money.
Frontier is not only airline taking creative licenses. Airline executives know pressure is mounting because of data showing carriers are among the world’s worst polluters, accounting for roughly 2.4 percent of all global CO2 emissions from fossil fuel use, a 32 percent increase over five years, according to the International Council on Clean Transportation. They understand they must react, so their press offices send releases about environmental stewardship.
Yet many airlines don’t have concrete answers. No one has devised an airplane that can fly reasonable distances without burning jet fuel. There’s some promise for the shortest flights, under about 250 miles, but it could be awhile before we see electric planes on trunk routes. For now, the best way to reduce emissions probably is to fly less. But airlines must grow to survive, so few will voluntarily shrink.
Yes, some invest in biofuel, or make it easier for customers to buy carbon offsets. Others make grand proclamations about 2050 emissions targets. Short-term, though, many airlines have been taking traditional business decisions, like buying new airplanes, adding seats, or cutting flights, and pretending it’s for the environment.
Take KLM, the Dutch airline, which this summer unveiled a new campaign asking customers to “Fly Responsibly.” KLM soon will cancel a daily flight from Amsterdam to Brussels, asking customers to take the train.
This is remarkable, right? KLM is asking passengers to fly less! But KLM is unique because it has just one hub, and that hub is full. By pushing customers to the train and bragging of its environmental commitment, it replaces a weakness with a strength.
British Airways is in a similar predicament. It already controls the majority of slots at London Heathrow, one of the world’s most lucrative airports, allowing it to make robust promises about sustainable growth. Why would it want to jeopardize its protected status?
Interestingly, British Airways might not have this competitive advantage forever. Authorities want to build a third runway at Heathrow by the mid-2020s, something Virgin Atlantic, an undersized challenger, desperately wants. But Willie Walsh, head of British Airways’ parent company, has been lukewarm, recently reminding reporters it would lead to more pollution. Here, Walsh underscored his company’s commitment to sustainability while dissuading regulators from allowing new competition — a win-win.
Also, don’t forget the drama in Sweden, birthplace of the modern flight shaming movement, a problem for Scandinavian Airlines, or SAS. It keeps promising travelers it understands their concerns, releasing a series of targets for emissions reductions over the next 30 years.
But look at its short-term actions. In the past two years, SAS has moved its Hong Kong and Los Angeles flights from Stockholm to Copenhagen, where demand is better and there is no flying eco-tax. The airline is also discounting, recently selling sub-$300 fares between some U.S. and European cities. That pricing is not environmentally friendly, but is appropriate for an airline fighting for commercial survival.
Calling Each Other Out
Airline executives know this spin game because many accuse competitors of misleading passengers about their environmental records.
Look at the chirping between Ryanair and Lufthansa Group. Like Frontier, Ryanair brags about its environmental footprint, saying its CO2 per passenger kilometer is 23 percent lower than the average of Europe’s four major airlines.
Lufthansa CEO Carsten Spohr counters that Ryanair’s pricing is so irrational — as low as 10 euros per segment — that the airline is persuading passengers to take trips they otherwise would not. He told a Swiss newspaper Ryanair’s fares are “economically, ecologically and politically irresponsible.”
We see similar battles in the United States, as United Airlines and American Airlines arguing over which is greener. United often promotes sustainability, announcing in May it planned to buy “up to 10 million gallons of cost-competitive, commercial-scale, sustainable aviation biofuel over the next two years.” (United has other eco-friendly initiatives, too; but remember, United use more than 4.1 billion gallons of fuel last year.)
American CEO Doug Parker knows the game. At a town hall meeting in August, an American employee asked Parker why his airline lagged United, according to reporting from blogger Gary Leff. Parker reminded the employee the best way to protect the environment, at least for now, is to buy newer airplanes.
“I get annoyed by things like you read from United saying they’re the most environmentally conscious,” he said. “They’re not. They’re flying around average airplanes that are 15 years old. We’re flying around an average fleet that’s 9 years old.”
Do We Blame Airlines?
It is easy to blame airlines. But demand is robust. Can you expect a business to artificially forgo revenue by culling flights during boom times? Customers would hate it, because prices would rise. And most shareholders wouldn’t be happy, either.
We can give airlines credit for smaller advances. Many are shedding onboard plastic, using more sustainable materials, cutting waste, and investing in recycling. Some are replacing older ground equipment with new electric tugs and trucks, while many have promoted carbon offsets.
For bigger change, we may need more government action. Germany is moving swiftly, substantially raising taxes, though long-haul carriers like Lufthansa will see far less tax, on a percentage basis, than short-haul airlines. France has also been planning to implement an eco-tax, and the EU may take action.
Also, airlines are not immune to simple laws of economics. We know demand falls when prices rise, and taxes are one way to reduce demand. But other factors, like a global economic recession, or a spike in oil prices, would have similar effects. In both cases, airlines would cut flights and the planet would benefit.
Demand could also fall if anti-flying movements pick up steam, though even with the press coverage, many airline executives say it’s not yet hurting profits.
Long-term, let’s look to airline manufacturers for innovation. Most have invested in electric aircraft, and perhaps the technology could be viable sooner than expected. It could be game-changing, but given limitations in battery technology, we may need to be patient. More likely, manufacturers will keep producing more efficient aircraft, helping airlines reduce emissions with each generation.
All least it’s a start.