Delta Airlines: Can It Soar to New Heights?
Delta Airlines: More turbulence and flight delays ahead?
Introduction
If the commercial aviation industry were a country, it would rank seventh globally in terms of carbon dioxide (CO2) emissions (1). Delta Airlines, as the world’s largest airline by passenger count (2), is unsurprisingly one of the top emitters. Climate change has created both regulatory and operational challenges for Delta and if the company wants to stay competitive in the industry, Delta must act quickly to curb emissions and increase its fuel efficiency.
Regulatory Challenges
Earlier last month, 190 countries adopted a new climate change plan to curb greenhouse gas emissions from international flights, to take into effect in 2021 (3). Approved by the International Civil Aviation Organization (ICAO), this accord is the first global climate change agreement to be enacted for a specific industry sector (4). This new measure becomes one more burden amid multiple other industry regulations that will add pressure for airlines such as Delta to become more fuel-efficient with their fleet.
Operational and Weather Challenges
Although there is widespread understanding of the impact that the airline industry has on climate change, there is less discussion around climate change’s detrimental effects on airlines, aside from the regulation costs. Two major effects are higher weight restrictions on planes and increased turbulence.
A 2014 study from Columbia University found that increasingly warm temperatures cause lower air density and require airplanes to attain higher takeoff speeds to lift off the ground. If the runway is not long enough for the plane to reach the necessary speed, airlines must adjust by reducing the plane weight. Based on a Boeing 737-800 aircraft, the researchers estimate that by 2050-70, the number of weight-restriction days between May and September will increase 50-200% (5). For Delta, weight restrictions would force the company to reduce cargo or passengers, both of which will negatively impact sales and profitability.
Another consequence of climate change has been bumpier flights due to stronger and more frequent turbulence. Notably, the turbulence is clear air turbulence, with an absence of thunderstorms or clouds, so pilots cannot see it, and satellites and on-board radar cannot detect it (6). A 2016 UK study revealed that rising temperatures are changing jet streams, which are wind currents in the upper atmosphere. The variability of flight routes and flight duration is heavily dependent on these jet streams, so flights try to ride tailwinds and avoid headwinds. Particularly for the transatlantic flights between Europe and North America, the climate change will increase turbulence and create longer journey times of a few minutes per flight by 2050, totaling to thousands of additional flight hours annually (7). For Delta, this change would bring higher maintenance costs, fuel costs, flight delays and customer complaints.
Delta’s Progress
Given these challenges posed by climate change, Delta has developed a climate change strategy with goals aligned to the standards provided by International Air Transport Association (IATA).
Over the last six years, the company has used 6% less fuel to transport the same load. Fuel savings have come from 1) operational changes (e.g., better route scheduling) 2) removing weight (e.g., Skymall Magazine, duty free) and 3) upgrading aircraft parts. However, Delta’s annual fuel efficiency improvement of 1% in 2015 still falls short of the IATA goal of 1.5%. In terms of absolute emissions reduction, Delta has decreased its carbon footprint by ~14% from 2005 levels. But since 2013, as shown in the charts above, emissions have started to increase slightly every year, suggesting that the growth in air travel and flight time are outpacing the improvements in fuel savings and fuel efficiency. As a result, Delta had to increase its purchase of carbon credits to offset its emissions (8).
Additional Opportunities
Delta, like many other airlines, face several challenges in accelerating their progress on climate change goals. The most direct solution is to fly newer, more efficient aircraft but because of the long useful life of the planes, this initiative will take time. In the meantime, Delta must take a long term view and be willing to invest in smaller upgrades to its aircrafts and prioritize more technology spend, especially after the worldwide IT system failure in August. In addition, Delta should work closely with governmental agencies and the regulators to receive assistance and support on curbing emissions while remaining competitive in the global market.
Furthermore, Delta should move quicker to explore using sustainable biofuel in its flights, which will greatly reduce emissions. United Airlines has already began using biofuel in certain regular routes and JetBlue has signed up a long term contract, stating that with subsidies, the cost of biofuel becomes comparable to regular jet fuel (9). Since biofuel is still a new market needing customer acceptance, Delta may be able to obtain discounts for a long term agreement, and combined with subsidies, biofuel could be a cost-effective alternative.
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Sources:
(1) International Council on Clean Transportation, “Programs: Aviation” http://www.theicct.org/aviation. Accessed November 3, 2016.
(2) B.R. “World’s Largest Airlines.” The Economist, June 24, 2015. http://www.economist.com/blogs/gulliver/2015/06/worlds-largest-airlines. Accessed November 3, 2016
(3) Fountain, Henry. “Over 190 Countries Adopt Plan to Offset Air Travel Emissions.” The New York Times, October 6, 2015. http://www.nytimes.com/2016/10/07/science/190-countries-adopt-plan-to-offset-jet-emissions.html. Accessed November 3, 2016.
(4) Scott, Mark. “Pollution Accord Is Set For Global Flights, But Tasks Remain.” The New York Times, November 3, 2016. http://www.nytimes.com/2016/11/03/business/energy-environment/pollution-accord-is-set-for-global-flights-but-tasks-remain.html. Accessed November 3, 2016.
(5) Coffel, E., and Horton, R. “Climate Change and the Impact of Extreme Temperatures on Aviation.” American Meteorological Society Journals, October 28, 2014. http://dx.doi.org/10.1175/WCAS-D-14-00026.1. Accessed November 3, 2016.
(6) Williams, Paul, and Manoj, Joshi. “Intensification of winter transatlantic aviation turbulence in response to climate change.” http://www.met.reading.ac.uk/~williams/publications/nclimate1866.pdf. Nature Climate Change, April 3, 2013. Accessed November 3, 2016.
(7) Williams, Paul. “Transatlantic flight times and climate change.” Environmental Research Letters, February 10, 2016. http://iopscience.iop.org/article/10.1088/1748-9326/11/2/024008/meta. Accessed November 3, 2016.
(8) Delta Airlines “2015 Delta Corporate Social Responsibility Report” http://www.delta.com/content/dam/delta-www/about-delta/corporateresponsibility/2015DeltaAirLines_CorporateResponsibilityReport.pdf. Accessed November 3, 2016.
(9) Cardwell, Diane. “JetBlue Makes Biofuels Deal to Curtail Greenhouse Gases. The New York Times, September 19, 2016. http://www.nytimes.com/2016/09/20/business/energy-environment/jetblue-makes-biofuels-deal-to-curtail-greenhouse-gases.html. Accessed November 3, 2016.
Very interesting reading about the effects that climate change could have on the airline business. I would have never thought that it could go as far as affecting weight restrictions. Why do you think Delta hasn’t moved quicker with its sustainability plan? Maybe we need more studies quantifying the costs that climate change could have on airlines. Until Delta feels that this is a real threat, it will not make it a priority in its business plan.
Very interesting read as air travel is becoming even more important in an increasingly global world. Given that weight is a big issue for Delta, I wonder if they could implement some type of program to incentivize passengers to carry less luggage. For example they can offer points for passengers who only use one carry on or who have lighter checked bags. I wonder also if they could incentivize passengers on full flights to shift to emptier flights. For example there are times where I’ve asked to swtich to an earlier flight and haven’t because I was going to be charged a change fee. What if this change fee was waved if the flight I wanted to switch to was more empty. This way they could even out weights while increasing customer satisfaction.
Great post! This article perfectly illustrates the challenge of climate change; Delta not only has huge impact on global climate change, but also is affected by climate change, both in terms of regulation and operation. Particularly, the two operational effects mentioned in the post were interesting. As for the potential solution, I agree with the idea that Delta should move quicker to explore using sustainable biofuel in its flights, because the upfront cost of this solution is much cheaper than purchasing new energy-efficient airplanes or parts. I have a supporting example in shipping industry. Nippon Yusen, Japanese largest shipping company, is now conducting research on using LNG, instead of heavy oil, as the fuel of ships, and its trial has been successful so far. I think using “clean energy” is becoming a mainstream in the international transportation industry.