If the global airline industry were a country, it would be the world\u2019s seventh largest emitter of carbon dioxide (CO2), just behind Germany. With increasing global trade and interconnectedness, international air travel and air freight are predicted to increase significantly, and CO2 emissions are predicted to triple by 2050 in the absence of efficiency improvements according to ICCT, an independent non-profit organization [1]. As a result, there is a sense of urgency to improve efficiency in the industry.<\/p>\n
It is worth noting that airlines have strong motivation to improve fuel efficiency to the extent that it is cost effective. Fuel costs are a key input and a driver of the overall profitability of an airline, so reducing overall fuel burned is\u00a0hugely beneficial\u00a0to the businesses as well as the environment. However, as noted above the industry is set to significantly increase its overall emissions and, without further incentives, many (including the ICCT) believe airlines have insufficient incentives to innovate. Many commentators argue\u00a0that the free market fails to adequately capture the social cost of carbon dioxide emissions, which was\u00a0estimated to be\u00a0around \u20ac42 per ton of carbon dioxide in the European Union in 2012 [2].<\/p>\n
British Airways (BA), the United Kingdom flag carrier, has nonetheless stated a commitment to \u2018ensuring that aviation reduces its impact on climate change\u2019, and has identified new fuel sources, emission-saving initiatives, environmental projects and proactive support of government legislation as key areas of action [3].<\/p>\n
Although all European airlines joined the EU Emissions Trading Scheme (a \u2018cap and trade\u2019 market for carbon dioxide emissions) in 2012, British Airways was the first airline to participate in carbon trading in 2002 as a participant in the UK Emissions Trading Scheme. This scheme was less punitive than the EU ETS, but set reduction targets and incentivized participants to meet those reductions [4]. For its part, British Airways noted that its participation in the scheme brought \u2018valuable experience of operating with an emissions trading scheme\u2019 and improved the firm\u2019s ability to attribute cost to carbon emissions internally.<\/p>\n
Alongside its participation in the UK ETS and later the EU ETS, British Airways has undertaken a number of projects to drive down greenhouse gas emissions across its fleet, including [5]:<\/p>\n
However, despite these technical innovations, in November 2015 British Airways was singled out as one of the least fuel efficient carriers operating transatlantic routes [6]. The report pointed out that British Airways burned 51% more fuel per passenger kilometer than the most fuel efficient carrier (Norwegian Air Shuttle).<\/p>\n
British Airways responded with two main reasons for their relative underperformance. Firstly, since the report measures emissions per passenger per kilometer, figures are worse for airlines (such as\u00a0British Airways) who operate aircraft with more premium seats relative to economy seats, since these airlines have fewer passengers per flight.<\/p>\n
Secondly, British Airways points out that it is currently in the process of replacing an ageing fleet. Airlines that operate the relatively newer Airbus A380 and Boeing 787, which are significantly more fuel efficient than comparable older aircraft, exhibit fuel efficiency metrics that are not necessarily a reflection of the company\u2019s innovation efforts more broadly. For example, the Boeing 787 is designed to be 20% more fuel efficient than the 767, which it usually replaces, and is a popular aircraft in the Norwegian fleet.<\/p>\n
Notwithstanding British Airways\u2019 counterarguments, more remains to be done to improve efficiency and reduce the company\u2019s impact on the environment. For example, competitor Air France partnered with NavCanada to understand efficiency gains from varying aircraft altitude and air traffic distance to take advantage of the jet stream, finding significant efficiencies [6]. Similarly, Singapore Airlines has realized 2,536 tons of annual CO2 savings from efficient traffic management systems in the Pacific region. British Airways must look both externally and internally and be ready to adopt these industry best practices if it is to move from fuel efficiency underperformer to emissions mitigation leader. (798 words)<\/p>\n
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Sources<\/strong><\/p>\n [1] International Council on Clean Transportation aviation statement. 2016. Available here<\/a><\/p>\n [2]\u00a0Mendes, L. and G. Santos. 2008. \u201cUsing Economic Instruments to address Emissions from Air Transport in the European Union\u201d, Environment and Planning A<\/em>, Vol. 40, N\u00b01, pp. 189-209. DOI: 10.1068\/a39255, available\u00a0here<\/a><\/p>\n [3] British Airways Corporate Responsibility Statement. 2016. \u201cTo reduce British Airways\u2019 environmental impact\u201d <\/em>available here<\/a><\/p>\n [4] International Civil Aviation Organization. 2007. \u201cReport on Voluntary Emissions Trading for Aviation\u201d, available here<\/a><\/p>\n [5] Air Transport Action Group. 2015. \u201cAviation Climate Solutions\u201d, available here<\/a><\/p>\n