Escalating pressure from investors is pushing airlines to address environmental concerns, according to the International Air Transport Association (Iata), which acknowledged that the trend toward “flight-shaming” could weigh on the industry’s future growth.
Speaking at a conference in London where airlines vied to demonstrate plans to decarbonise, Iata said the climate was now “top of the agenda” for investors.
Citing HSBC research, Iata’s chief economist, Brian Pearce, said climate issues came up an average of seven times on each call between European airlines and investors in 2019, compared with an average of less than once per earnings call between 2013 and 2017.
Pearce said: “Climate change is not just an issue for protesters or scientists. You can see the spike this year. This is on the top of the agenda for mainstream investors now. We’re getting pressure from all quarters.”
He said flygskam, or flight-shaming – the trend towards making air travel socially unacceptable due to its carbon cost – “could be a factor slowing growth in the future”.
Although airlines have signed up to the Corsia offsetting scheme set up by the UN aviation agency, ICAO, many believe taxes and a consumer backlash could grow. Shai Weiss, Virgin Atlantic’s chief executive, said: “If there is one name everyone in the airline industry knows today that it perhaps didn’t know a year ago, it’s Greta Thunberg.”
However, Pearce said that even if Europeans flew less, the predicted growth of air travel in China alone would mean an additional 1.5-2bn passengers travelling each year by 2040. “Solving the climate issue really depends on China, India and Asia,” he said.
Álex Cruz, the chief executive of British Airways, which last week promised to offset all domestic flight emissions, said the airline would make it easier for customers to voluntarily offset international flights. He said there were “huge areas of opportunity” to cut emissions via better air traffic management, while changes such as lighter food trolleys on BA’s fleet had cut 30,000 tonnes a year of CO2 emissions.
Virgin’s new feeder airline, Virgin Connect (formerly Flybe), could axe some routes over environmental concerns, its boss suggested. Mark Anderson, the chief executive of the parent company Connect Airways, said it might decide certain journeys made more sense by train or car.
He told PA news agency: “We need to be responsible. Maybe there are some routes in the future that we will potentially not fly.”
The pledge appeared to be one for the long term, as Weiss told the Airlines 2050 conference that his ambition was for Virgin Connect to operate 12 domestic routes to Heathrow. Virgin Atlantic wants to use the airline’s fleet of 70 aircraft to ensure enough connections to prop up a long-haul network to rival BA’s.
