Delta – Combat Climate Change by Flying into the Future
Airline operations are at risk due to climate change and Delta will need to innovate to meet the challenge.
Those of us who love travel know that flying is a necessarily evil in the journey. What may be less obvious is that airlines face major risks to their operating models because of climate change.
Delta Airlines, with its humble beginnings in Georgia, is a leader in the airline industry in terms of passengers carried, worldwide routes, and revenue. Unfortunately, these factors won’t shield Delta from the real effects of climate change.
Like other airlines, Delta faces several risks because of the earth’s warming. The most prominent – delays and route changes due to weather – have already become manifest. Consumers across all airlines have seen more flight cancellations and delays because of bad weather. Interestingly, Delta has low flight cancellations compared to other airlines, but it works around this issue by delaying and rerouting flights. It’s also not impervious to cancellations – in January 2016, it cancelled 1350 flights in North America ahead of snowstorms. In addition, key tourism centers on coasts (ex: Florida) are battling a growing number of storms, which is changing consumer demand patterns to these destinations. Large storms, more generally, can have significant damaging effects on the airline industry. Hurricane Sandy in New York is one extreme example, where flight cancellations cost the airline industry ~$190 million. As global warming continues, airlines like Delta will need to manage increased cancellations, delays, and route changes.
Planes may also run into issues on the runway if global temperatures steadily rise. Georgia is located in the southeast United States, where the number of days with temperatures above 95 degrees has hit record highs. Delta’s largest hub in Atlanta is likely to face the issue of planes getting stuck on the tarmac due to heat or flooding. Not to mention, Delta will need to manage the increased likelihood of heat stress among airline workers on the heat trapping tarmac. These concerns can be applied to Delta’s major hubs more broadly, all located in major urban centers which are prone to the “heat island effect”.
Delta has several options to mitigate the impact of climate change on its business. It can leverage science to stay ahead of weather patterns and keep current with trends to increase routes to new, upcoming destinations. As delays become more of the norm, it can expand its own buffers at airports to manage consumer expectations. However, these actions simply adapt to climate change. Delta can’t outrun the impact of climate change forever, especially as consumers begin to demand more environmentally friendly options.
So how does Delta contribute to climate change and what has it done about it? Delta’s planes (like all others) rely on petroleum-based fuel. While airlines account for 2% of greenhouse gas emissions, planes contribute to the greatest carbon emissions per passenger compared to any other mode of transportation. Delta is on track with IATA targets to improve fuel efficiency by 1.5% per year from 2009 to 2020. Additionally, from 2005 to 2014, Delta decreased its carbon footprint by 16% by focusing on fuel efficiency, energy savings, and carbon neutral growth. Relating to the latter, Delta has implemented a program where travelers can purchase carbon offsets in addition to their ticket prices. Carbon offset initiatives include reforestation and conservation. However, not surprisingly, participation in the program is low.
As Delta looks forward, it must be a leader in pioneering change in the airline industry. While its efforts thus far have been useful, the truth is that there is still much at stake for Delta as global temperatures continue to rise. Drastic change is needed to (1) directly contribute to reductions in carbon emissions and (2) set a disruptive standard for other companies (in the tourism industry) to change practices for the sake of earth’s future. The best way that Delta can help is by removing its dependency on petroleum-based jet fuel. Delta’s current efforts towards biofuel, like partnering with the non-profit “Carbon War Room”, have been relatively insignificant. They need to double down on this investment in renewable jet fuel and in more cutting-edge research on aircraft powered by solar energies, batteries, or hydrogen.
Delta has much to gain from these advancements. Delta’s investment in airplane designs will not only help their consumers’ travel plans, as less carbon emissions hopefully lead to less delays during one’s globe-trotting, but will also serve as a competitive advantage amongst an increasingly eco-conscious generation of travelers.
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I empathize with the airline industry in fighting climate change. It is true that they are in the self-destructive cycle of being adversely affected by climate change from phenomenon, such as increasingly irregular weather patterns, as a result of them spewing carbon into the world. Airlines are a highly competitive industry and customers are shown to be increasingly price sensitive from the emergence of numerous low-cost carriers [1], yet demand responsibility for climate change (very contradictory behaviors). I think it falls more upon regulators to be the ones who enforce increased usage of alternatives to traditional aviation fuels.
1. http://www.frosch.com/airline-trends-for-2016/
Sairah – very insightful analysis of the main environmental issues impacting airlines. My main worry is, should airlines such as Delta venture out of their core business and diversify into cleantech operations and R&D? Shouldn’t that fall on the shoulders of the manufacturers / regulators (as Nitchan mention)? With such low margins of operations, Delta has in my opinion one way of affecting change, and that is through the renewal of their fleet and, specifically, by purchasing from the most eco-conscious manufacturer, thus ‘rewarding’ sustainable behaviour over other metrics.
I find it interesting that Delta is both significantly contributing to climate change given its high level of emissions, and it is also suffering from the effects of climate change which has resulted in an increasing number of weather-related delays. I agree that Delta needs to increase its efforts to identify a more sustainable fuel source for airplanes, but this poses some challenges in the short term. First, assuming that there is a more sustainable fuel source for airplanes that can be produced at scale, there is no doubt that in the short term, it will be more expensive than the current jet fuel that Delta procures. Given the fact that Delta is a public company, does using a more expensive energy source put the company at odds with maximizing shareholder value? Secondly, there are a number of companies (including airlines, the military and delivery companies) that stand to benefit from the discovery of a sustainable, scalable, and cost effective source of fuel. Is it possible for Delta to partner with these other entities to find a solution to this problem sooner and not have to bear the full costs of this endeavor alone? Would collaborating with other airlines on this initiative put Delta at risk of losing its competitive edge within the industry?
Thanks for the post! I have thought about how transportation companies produce greenhouse gases, but before your post, I hadn’t thought much about how climate change then negatively effects their core operations. You mention heat and storms as potential issues, but I imagine extreme cold temperatures (especially in places not used to them) cause significant issues for Delta as well. I definitely agree that Delta should pursue alternatives to petroleum-based jet fuel, but I wonder if they can also do more to increase the fuel efficiency of their planes. Working with aircraft manufacturers, Delta may be able to create more aerodynamic or lightweight aircraft that require less fuel to travel and ultimately produce less emissions.
Sairah, thanks for sharing your perspectives on Delta and the airline industry at large. I was not aware of the severe impact global warming was having on Delta and other airlines on an operational level. Your post inspired additional curiosity within me regarding this phenomenon and it appears that climate change is also negatively affecting the airline industry by way of an increase in jet stream wind speed. As a result, transatlantic flights are being delayed from Europe to the U.S. thus potentially adding thousands of hours per year to travel times and millions to airline fuel bills.(1)
Separately, due to my own research on the effects of climate change on tourism, I wonder whether the airline industry will also see some benefits as a result of global warming. Because of the higher global temperatures, it is possible that certain locations in the northern hemisphere would enjoy longer tourist seasons. If Delta could adjust the deployment of its planes to harness this effect, I wonder if they could capture some of the revenue it loses to the other effects of climate change.
(1) http://www.iflscience.com/environment/climate-change-making-transatlantic-flights-longer-and-more-expensive/
I remember seeing in the news this spring that Delta placed a number of large orders for new aircraft, and I can’t help but wonder – were those orders placed because the Company (finally) decided to retire a number of its older aircraft due to age/cost-of-further-upkeep expenses, or was Delta starting to feel the pressure of having the oldest, least fuel-efficient fleet in the industry? In other words, was the decision financially motivated or made out of concern for the environment? Both, I hope?
Older planes undoubtedly belch far more greenhouse gasses, and Delta, frankly, hasn’t been doing its part over the past decade or so. I remember reading a feature in Fortune magazine a few years ago that touted then-CEO Richard Anderson’s supposedly smart strategy of buying up old planes on the cheap in lieu of buying brand-new planes. However, what bothered me then, and still bothers me now, was that while short-term costs might be lower with the older MD-88s and 757s, the older planes are much harder on the environment, and meanwhile Delta’s competition was making strides improving their fleet efficiencies. Indeed, as of April 29, Business Insider reported that Delta’s fleet had an average age of 17.1 years, whereas its primary competition, American and United, boasted average fleet ages of 11.2 years and 13.6 years, respectively [1]. The Delta website shows the breakdown of age by plane type, and the Company has a whopping 428 planes (51% of its fleet!) that average 19 years of age or older [2]. American, by contrast, only has 129 planes (14%) that are that old [3], and United has a scant 51 planes (7%) 19 years or older. For Delta’s sake (and all of ours, for that matter), I really hope that this push to buy new aircraft was at least partially rooted in a desire improve the impact its fleet has on the environment on a day-to-day basis.
[1] http://www.businessinsider.com/delta-airbus-a321-order-billion-2016-4
[2] http://www.delta.com/content/www/en_US/about-delta/corporate-information/aircraft-fleet.html
[3] http://www.airfleets.net/ageflotte/American%20Airlines.htm
[4] http://www.airfleets.net/ageflotte/United%20Airlines.htm
Sairah, I really enjoyed your post! I agree with you that weather issues can exacerbate Delta’s fuel usage/emissions, as planes have to re-route longer routes around storms or are stuck for longer periods of time on the tarmac waiting to take off due to inclement weather. It is great to hear that Delta is working to improve its fuel efficiency by 1.5% per year, but I wonder if there isn’t more that they could be doing. Perhaps they could work with manufacturers to help redesign more efficient planes, or as you mentioned, could make more of an investment in renewable jet fuel as an alternative. Given the large numbers of passengers that Delta facilitates each day, they have the opportunity to serve as more of an advocate for change and could raise awareness for more national and federal environmental legislation. I have seen some airlines highlight onboard that they recycle, but are there other services that the airline uses that could be made more sustainable, such as sourcing of the packaged meals, composting or reduction of waste, or more energy efficient lighting/electronics?