Global warming has led to considerable scrutiny in the transportation industry. While much of this has been levied on the automobile industry – driving greater regulation and investment in cleaner vehicles – a rise in global tourism over the last couple decades has now brought the spotlight to the airline industry as well. In 2015, 10.7B gallons of oil were consumed by the airline industry in the US alone1, representing roughly 8% of domestic oil consumption2. Similar to the automobile business, this has led to some political innovation in the industry to disincentive gas usage3 – such as carbon tax levies – and has also led to the establishment of organizations such as IATA and A4A (International Air Travel Association and Airlines 4 America)4. Due to rising gas prices and competitive pressures, we have seen an increased global investment from major airlines to adapt their operating model in response to global climate change.
One airline at the forefront of these changes is Southwest Airlines – which now evaluates its business through three lenses – Performance, People, and Planet. Southwest has made considerable changes to its processes to minimize the effect of its operations on the planet. Considered a top four airline in its response to global warming, Southwest has invested in considerable changes both in the air and on the ground. Regarding its planes, a majority of the changes revolve around increasing fuel efficiency, with a 29% increase since 20055. For instance, Southwest has redesigned its galley and is installing lighter seats on its new planes to drastically decrease the overall weight of its aircraft – a key determinant of gas consumption. Even a technological change as simple as using tablets instead of heavy paper manuals and charts drove a 500K reduction in gallon consumption in 20155. In addition, Southwest installed Split Scimitar Winglets on a considerable portion of its fleet, making these planes more streamlined in flight and thus more fuel-efficient. Southwest has also continued to focus on recycling the plethora of materials consumed in-flight (e.g., aluminum cans, paper, etc.). Finally, Southwest has also agreed to purchase 3M gallons of low carbon renewable jet fuel per year starting in 20185.
Southwest has invested in optimizing its ground operations to minimize its carbon footprint as well. For instance, the company has shifted to more LED lighting in its Dallas and Atlanta hangar locations, which is considerably more energy efficient. Additionally, Southwest has made a concerted effort to reduce greenhouse gas emissions by moving more of its ground service equipment (GSE) to electric power (e.g., trucks and belt loaders). The company has done this extensively at its Albuquerque and Austin locations, with a plan to roll out these changes to the Phoenix airport next. To date, roughly 20% of the GSE fleet runs on electricity5. Finally, in 2015, Southwest purchased enough renewable energy to cover 40% of its energy consumption from its Dallas and Houston facilities5.
While Southwest has taken strong steps to move toward sustainability, many scientists believe that long-term sustainability in aviation will require more radical technological adoption6. As such, I believe that Southwest could be taking additional steps to become an industry leader in pursuing true technological advancement to drive sustainability in aviation. For instance, in addition to more traditional steps to decrease its carbon footprint (e.g., decreasing airplane weight), Southwest could also partner with scientists and organizations to rethink how a plane is actually powered. For instance, NASA is currently exploring hybrid models for aircraft (similar to hybrid cars)7. Airbus, another aerospace company, is partnering with Siemens to explore hybrid and electric airplane models as well8. There has also been recent scientific investment in building algae based biofuel engines for aviation9. While Southwest would be ill advised to pour considerable R&D investment into exploring these topics on their own, they could explore business development partnerships with some of these companies to ensure they are the first airline to pilot and adopt such technologies, keeping them at the forefront of technological innovation in the industry longer-term.
Finally, in addition to its current positive trajectory in decreasing its carbon footprint, there are some tactical changes to Southwest’s operational model that could also drive efficiencies in the short-term. For instance, since airplane weight is a key determinant of airplane fuel efficiency, Southwest could design incentives to have its passengers bring less baggage (e.g., coupon toward next purchase). In addition, Southwest could conduct analyses on its routes to remove those with low utilization and optimize for fuller aircraft overall (since the bulk of the weight is driven by the plane itself), which could also positively affect their bottom line. Overall, I believe that a comprehensive strategy of investing in short-term operational changes, coupled with an increased focus on longer-term technological innovations in aviation, can help Southwest cement its position as the industry leader in sustainability (797 words).
Appendix – Sources:
1US Energy Information Administration, “Frequently Asked Questions,” https://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10, accessed November 2016.
2United States Department of Transportation, “Airline Fuel Cost and Consumption,” http://www.transtats.bts.gov/fuel.asp, accessed November 2016.
3”Innovation towards tourism sustainability: climate change and aviation,” International Journal of Innovation and Sustainable Development, January 2006, http://www.inderscienceonline.com/doi/abs/10.1504/IJISD.2006.012421
4https://www.researchgate.net/profile/Kevin_Mearns/publication/301787366_Climate_change_and_tourism_some_industry_responses_to_mitigate_tourism’s_contribution_to_climate_change/links/57283e6708aef9c00b8b5817.pdf, accessed November 2016.
5Southwest Airlines, 2015 Annual One Report.
6”Innovation and global climate change in the 21st century, Atmospheric Environment, April 2009, http://elib.dlr.de/59761/1/lee.pdf, accessed November 2016.
7”Electrifying Flight,” The Economist, September 19th 2015, http://www.economist.com/news/science-and-technology/21664944-using-electric-and-hybrid-forms-propulsion-very-different-looking-aircraft, accessed November 2016.
8Wall, Robert, “Airbus, Siemens to Cooperate on Electric Plane Project,” Wall Street Journal, April 7th 2016, http://www.wsj.com/articles/airbus-siemens-to-cooperate-on-electric-plane-project-1460024827, accessed November 2016.
9”Emergence of green business models: the case of algae biofuels for aviation,” Energy Policy, February 2014, http://www.sciencedirect.com/science/article/pii/S0301421513010562, accessed November 2016.