Insights — June 21, 2019
Will airline companies cause their own crash?
The noose is tightening around the air transport industry and only airline companies can untie the knot. They would greatly benefit in the end by becoming actors rather than victims of change. When will they understand?
There are two ways to handle adverse circumstances: to try to put up a fight as long as possible or, rather, to embrace adversity in order to own and control it.
Some companies put up a fight, like Kodak did, when it faced the advent of digital photography until the company went bankrupt; like Swiss banks in the 1990s which, at first, rejected the grievances of the World Jewish Congress concerning compensation owed to Holocaust victims for unclaimed assets prior to being sentenced to pay billions of dollars in penalties; like automobile manufacturers who snubbed the electric car, but are now playing catch up in the wake of Tesla’s success without being able to make up for lost time. They all resisted unaware that it would bring them down.
The other attitude entails directing change like a mastermind who is always one move ahead of life and is thus able to steer its course in a more favorable direction. If airline companies grasped this, they would be the ones to spontaneously introduce carbon offsetting with the sale of each new ticket. Why ? Because climate strikes and the example of Greta Thundberg have mobilized youth and sparked a new phenomenon: «flight shame » or flygskam in Swedish. In some regions, there is already a noticeable impact on flight passenger loads. And this is bound to increase as numerous European political figures now support forbidding domestic flights in favor of train travel. Some countries such as the United States, Brazil, Japan, Norway and also Switzerland have started to tax kerosene on domestic flights. In France’s case, this was one of the grievances of the « yellow vests » : how could the state dare raise fuel taxes on people earning the minimum wage without addressing the privileges enjoyed by the aviation industry ?
It’s become obvious today that we don’t need a worldwide consensus in order to take action. We can already start at the national level. Airlines will not be able to avoid refueling their airplanes in the few countries that tax kerosene, since it would be even more expensive to carry on the outbound flight the fuel required for the return flight. And I do not buy the pessimistic argument that passengers would travel abroad to catch a cheaper flight : the trip would end up costing more than the handful of Euros in savings.
So the aviation industry faces a choice between resisting change as long as possible, running the risk of being perceived as irresponsible polluters and losing market share to other modes of transportation or, instead, tackling the problem head on. The industry could make a simple administrative decision to fully offset its CO2 emissions. Offsetting carbon dioxide entails funding a decrease in emissions in other sectors where it is easier to achieve. Examples include refurbishing old factories, replacing coal plants with gas plants, reforesting or installing solar panel and wind turbine farms. There are organizations that already enable passengers to voluntarily pay their carbon offset but, obviously, that is not enough. Airline companies have to urgently adopt this practice on a large scale.
What would it cost them ? From 4 Euros per passenger in economy class on a European flight to 200 Euros per passenger in business class on a transoceanic flight. As margins are thin, the airline companies would need to include a part of this amount in the ticket price. But this would go totally unnoticed as rate policies result in ticket prices varying from one to five times the standard fare depending on when and where you buy your ticket. When two passengers on the same flight have paid, respectively, 25 and 250 Euros for their ticket, who would notice 4 Euros spent on carbon offset?
In so doing, airline companies would be perceived as acting responsibly and, beyond that, they would rid their clients of their sense of guilt. They could not dream of a better marketing strategy. The aviation sector would no longer be considered guilty but, rather, an actor in the fight against climate change in which we all have to assume our share of responsibility.
It goes without saying that this mechanism must go hand in hand with reduced emissions by the air transport industry. Constant innovation is required in terms of using lighter materials, more efficient and even hybrid engines, biofuels and also improving flight plans to minimize each flight track’s fuel consumption. I am fully aware that it would be impossible to fly without emitting the slightest amount of CO2 like Solar Impulse did. In this regard, the industry has made significant progress as a flight today emits half the amount of CO2 than the same flight did thirty years ago. But we have to go much further : for all remaining emissions, carbon offsetting would allow airline companies to fully neutralize their impact on the planet.
The International Civil Aviation Organization (ICAO) would argue that it proactively took action as early as 2017 with the CORSIA system. What does it entail? It’s a commitment to limit the emissions of the aviation industry at 2020 levels and to offset only the amount that would exceed this ceiling. Yes, you read that correctly. Whereas all countries are trying to decrease their emissions below 1990 levels, for its part, the air transport sector has selected a future date as a baseline allowing itself to increase its emissions until then and to stay at those levels. This is a travesty of corporate responsibility…
I often travel in airplanes and I like this mode of transportation. I voluntarily offset the carbon emissions of my own flights but, from now on, this small-scale practice has to be broadly adopted by the airline companies. If the air transport industry continues to ignore the problem and take short cuts, it will soon run into heavy turbulence. The industry will bear higher and higher costs of “flight shame,” it will be saddled with regulatory changes and governments will impose taxes that it refused to introduce on its own. It would waste time, money and political capital. And we would gain a few additional megatons of CO2 released in the atmosphere…
Bertrand Piccard, President of the Solar Impulse Foundation