United: Flying the EcoFriendly Skies
How can the world's most comprehensive airline have a comprehensive approach to climate change?
Aviation is a crucial industry: it is estimated that aviation supported 63 million jobs in 2015 and underpinned $2.7 trillion of GDP [1]. And demand for air travel is only increasing: the aviation industry transported 3.57 billion passengers in 2015 and that is projected to grow an average of 10% year-on-year for the next 10 years [2].
Given its size, aviation is a sizeable contributor to climate change. If the aviation
industry were a country, it would rank 19th in the world in terms of GDP, generating $664 billion of GDP per year, about the same as Switzerland [3]. However the aviation industry’s CO2 emissions of 781 million tons rank it as the 6th largest producer, on par with Germany–only the international shipping industry produces more CO2 [4]. In fact, aviation accounts for 2% of all human-produced carbon dioxide emissions and this share is projected to grow to a quarter of all emissions by 2050 as demand for flights continue to grow [5].
Nonetheless, as the vast majority of aviation operations occur in earth’s atmosphere, aviation is one of the industries most impacted by climate change. Changing wind patterns require longer flight routes and therefore more fuel expenditure [6] and more extreme temperatures lead to different weight restrictions and ground delays, reducing fleet efficiency [7].
As world’s most comprehensive airline, United Airlines needs a comprehensive plan to tackle their environmental impact. They are working across 3 areas:
- Fuel Efficiency: Since 1994, United has improved their fleet fuel efficiency by more than 34%
. United was the first airline to fly with the new fuel efficiency Split Scimitar winglets that deliver up to a 3-5% percent reduction in carbon emissions and noise over standard winglets and now has more than 370 aircraft with these winglets [8]. - Sustainable Travel Products and Processes: United implemented waste reduction and ground fuel efficiency practices. For example, United has recycled 27.8 million pounds of aluminum cans, paper and plastic from their flights since 2010. They have also renovated their terminal facilities to be LEED certified and distribute more environmentally friendly amenities across all cabin classes [9].
- Alternate Fuels: United is also exploring more efficient fuels, introducing biofuels to their operations during 2016. They are delivering their trash to be converted into biofuels that are expected to provide greater than a 60% reduction in greenhouse gas emissions on a life cycle basis when compared to traditional jet fuel [10].
Beyond the steps United has already taken, there are a few additional areas where they can improve their environmental impact:
Ground Operations: the majority of United’s focus has been on their flight operations, however improving the efficiency of their ground operations would also have an environmental impact. Moving to using electric ground support vehicles would help reduce CO2 emissions [11].
Infrastructure Improvements: Aviation is a highly regulated industry that uses largely antiquated technology to manage flight safety. As an industry leader, United can help influence regulators to modernize air traffic management systems enabling more efficient flight operations. New air traffic management systems could save 9 million tons of fuel annually and reduce CO2 emissions by 28 million tons a year [12].
Navigational Technology Adoption: New RNP technology allows aircraft to fly precisely-defined paths without relying on ground-based radio-navigation signals. The paths can be deployed at any airport, allowing aircraft to fly predictable,repeatable paths with an accuracy of less than a wingspan. RNP paths can be designed to shorten the distance an aircraft has to fly enroute, reducing fuel burn and CO2 emissions [13]. While this would require United to re-train pilots, the savings and environmental impact would be significant.
With rising standards of living worldwide and a globalized economy, air travel is becoming more frequent and more important. Modernizing antiquated systems and innovating new aircraft and fuel technology will enable all of us to continue flying the (eco) friendly skies.
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[1] http://www.iata.org/publications/Documents/iata-annual-review-2016.pdf
[2] https://www.flightglobal.com/news/articles/insight-from-flightglobal-flight-fleet-forecasts-e-430071/
[3] http://www.atag.org/facts-and-figures.html
[4] http://www.iata.org/pressroom/facts_figures/fact_sheets/Documents/fact-sheet-climate-change.pdf
[5] https://www.theguardian.com/environment/2016/oct/06/aviation-emissions-agreement-united-nations
[6] http://iopscience.iop.org/article/10.1088/1748-9326/11/3/031002/meta
[7] http://journals.ametsoc.org/doi/abs/10.1175/wcas-d-14-00026.1
[8] https://www.united.com/web/en-US/content/company/globalcitizenship/environment/fuel-efficiency-and-carbon-footprint.aspx
[9] https://www.united.com/web/en-US/content/company/globalcitizenship/environment/sustainable-products-and-waste-management.aspx
[10] https://www.united.com/web/en-US/content/company/globalcitizenship/environment/alternative-fuels.aspx
[11] http://www.eli.org/sites/default/files/docs/forum/29-5/29-5testimony.pdf
[12] http://www.atag.org/component/downloads/downloads/201.html
[13] http://www.atag.org/component/downloads/downloads/201.html
Another opportunity is for United and other airlines alike to educate their 3.6 billion annual passengers directly about climate change and the impact it has on airline operations. Increasing awareness by showing its passengers the impact of climate change on its own operations and what proactive measures its currently taking to mitigate and adapt to the change is both great for consumer education and United’s PR. United could also further reduce its own carbon footprint by minimize its own paper use by replacing safety instructions, food menu, magazine with electronic ones, and by encouraging its passengers to use mobile boarding pass vs. printed tickets.
It is interesting to see the airline industry and specifically United, innovating in the sources of energy that they use rather than simply making up for their carbon footprint by investing in reduction of emissions outside of their own operations. One interesting study that I came across is using fuel made from chicken fat as an alternative to jet fuel. Perhaps more interesting than this is the fact that the following article describing this research was written five years ago! http://www.nasa.gov/topics/aeronautics/features/aafex2.html
However, if 5 years ago we were already looking at alternative fuel sources to jet fuel and in particular biofuels which have a much lower carbon footprint, than why haven’t we seen as much application of such innovation across the industry? I suppose this could come down to regulation, safety, and other barriers, and therefore, the real question is: How ripe is this industry for disruption in the energy and sustainability context, and what role will United play in bringing this disruption forward?
I also remember reading about a variety of other innovative technologies which people hope could be used to one day to reduce carbon emissions. One of the most interesting ones I thought was the usage of solar energy for propulsion combined with lighter-than-air gasses used to neutralize some of the planes weight. Of course there are many issues to tackle with this such as ensuring that enough energy will be available during take-off and landing (in case of overcast skies).
Thank you for an interesting article. As I understand it a key driver of the fuel efficiency (and thereby overall energy efficiency) of an airline is the age of their fleet, since new aircraft are often considerably more fuel efficient than older ones (for example, the Boeing 787 Dreamliner which has a fuselage made from composite materials). As a result, some of the most significant efficiency improvements can be made earlier in the supply chain, and should be encouraged using pressure from / standards set by airlines’ aircraft buyers.
I like Mary’s point about educating passengers about the effects their travel decisions have with regard to CO2 emissions. I also see this as a future challenge that United must be aware of. If people decrease their travel due to CO2 concerns, United has a potential to loose a lot of passengers annually.
United might be able to use lower carbon emitting flights as new class of travel to business travels and corporations which have targets to reduce their sales and business travel CO2 emissions. Potential corporations could be those that reside in countries which signed the Kyoto Protocol.
These flights could have special requirements (such as 95% plane occupancy ensuring little waste, or 30% fewer CO2 emissions per mile per passenger flown compared to industry average) which allow United to charge a premium.
Thanks for the interesting article! I liked Michael’s point about the biggest option for increasing fuel efficiency being the age of an airline’s fleet, as the technology for newer airplane models allows more and more efficiency. One issue I see with this solution is that an aircraft is such an enormous capital expenditure, that it is not realistic for an airline to be able to update its fleet constantly. However, as we learned in our United case, using a hub-and-spoke network like United requires a larger fleet due to operational complexities and lower aircraft utilization percentages. It would be interesting to do an analysis on how the different types of networks and linear vs. out-and-back systems affect CO2 emissions and necessary fleet size. Although out-and-back systems may increase operational efficiency and reduce variability by decoupling routes, the lower aircraft utilization and larger required fleet size may contribute more to global climate change.
The one area that got my interested in your article was the mention of alternative fuels used by United and how they are reducing carbon emissions. There are two points here that make me question how scalable this is for United and what the capital expenditures required to achieve that scale are. In looking deeper are United, it appears they are only running the biofuel mix on one route – LA to San Francisco. This seems to be a very limited segment of their overall operations and I really question what their total savings will be. Additionally, it does not sound like this biofuel company can produce more if United wanted it, potentially putting them at pricing risk.
I was also very interested to learn about United equity state in biofuel producer Fulcrum Bioenergy. Have you considered the impact of this equity stake in their operations or what the long term opportunity of this equity stake is for United in terms of reliable biofuel supply? Is there any indication if United will have to provide additional capital to remain on schedule to begin receiving fuel from Fulcrum in 2018.
Muy bueno, Nasty Woman. I can see the benefits of increasing fuel efficiency, infrastructure improvements, and adopting navigational technology as a win-win scenario for United. However I have some doubts on what United’s incentives are to adopt more of the other 3: recyclable travel products, alternate fuels, and using electric vehicles for ground operations. These seem like initiatives that require hefty costs or investments to United with no tangible or direct benefit to United besides general PR to consumers. I suppose the biggest challenge of the fight against climate change for any company is really how to look for more effective and well-aligned incentives.
This was a really interesting article — I was shocked to see how large the airline industry is, both from a dollars and cents perspective, but also from a contribution of CO2! My biggest fear when thinking about a company like United actually instituting real change is the fact that retail air travel is a relatively captive market. For instance, it would be very hard for me as a consumer to choose United over another airline solely because of environmental concerns. Much higher on my list of priorities is route availability and price. Therefore, I don’t see too much incentive for United to change its consumption habits from just a marketing perspective.
I wonder if perhaps it’s going to take regulation from the government to enforce changes for a company like United.
Great post! United has a unique climate change challenge: as wind patterns increase in intensity, flight times could increase. This could result in more fuel burned, which results in more greenhouse gases emitted, which, in turn, results in accelerated climate change. This vicious cycle that airlines face is daunting from a business perspective (not to mention the environmental perspective). The measures taken by United that you have pointed out seem like a step in the right direction, but it I wonder if more could be done by the industry to push the boundary on airline climate change innovation. I see this as a difficult task given the passenger safety aspect and the proven track record of turbojet engines. Secondly, in the spirit of debate (and the fact that I wrote my post on Maersk, a shipping company! 🙂 ), I’d like to challenge the idea that the shipping industry is the largest contributor of CO2 emissions. In absolute terms, I think your post proves that to be the case. However, I don’t think that statistic shows the whole picture. My research highlighted the efficiency of the shipping industry and how it relates to CO2 emissions. Specifically, ships tend to be the most efficient mode of transportation when looked at through a “gram of GHG/(ton-km)” lens. While the sheer volume of pollution is absolutely the most important metric to watch while trying to reduce pollution, and the shipping industry certainly needs to work to reduce that, I think it is important to not discount the amount of “value” we get from a given amount of pollution. Thanks!
Thanks for an interesting post. While I recognize air travel is becoming more frequent with demand projected to grow 10% year-over-year, my concern is that United and other airlines may face economic pressures that inhibit their sustainability efforts. For one, the airline historically has been one of the worst performing industries; in fact, during the 2000s six major airlines went through bankruptcy and the industry lost $35 billion cumulatively from 1979 to 2014.
Even though efforts such as navigational technology adoption, infrastructure improvements, and ground operations will no doubt improve sustainability efforts, the upfront investment and training efforts required to implement programs will be a deterrence for airlines that face uncertain cyclicality and profitability concerns. As such, I would argue that governments need to play an increased role in regulating and subsidizing sustainability efforts (i.e., sustainable biofuels, infrastructure, etc.).
References:
https://priceonomics.com/can-airlines-make-money/
NW thanks for sharing what I thought were well thought out, balanced and insightful comments with respect to the aviation industry. Clearly serious headway has been made historically, and that those benefits will see incremental gains out into the future.
I had two major thoughts when reading through your analysis, 1) what do you think of the European regulators decision to ensure that all flights within or from the European Economic Area are covered by the EU’s cap-and-trade program from 2012? Do you think this is something that could be rolled out in other developed markets? 2) Given rapid globalization, and the ever growing need for inter-continental travel, what other transport technologies could be tapped to provide such crucial services (the hyper-loop as a case in point)?
Thanks for the interesting post NW (also an interesting blogging name!). The article gave a very good perspective on how huge the industry is how significant the industry footprint is. I thought this is one of the few industries wherein the incentive of lowering the carbon footprint is so directly aligned with direct profitability of the companies. Fuel is the the most significant cost for this industry and I think this is a classic example of how the most significant carbon footprint reduction in coming decades is expected to come from gaining efficiencies which in this case has led to design (wings design and engine designs) and process (infrastructure and RNP technology) efficiencies.