Aviation has been hard hit by the pandemic. But with many borders open again and passenger volumes rising, the sector is starting to get back on its feet.
Recovery will be a gradual process. But it also presents a unique opportunity. This isn’t a moment for ‘getting back to normality’—the industry cannot ignore significant changes in the travel market and profound shifts in customers’ priorities that have been accelerated by the pandemic.
Instead, it’s a moment for getting back to growth—more sustainably than ever.
Leisure travelers—changing priorities
As the shockwaves of the pandemic have played out, many consumers have been jolted into rethinking their personal priorities. According to our Life Reimagined research among 25,000 people, 50% of consumers globally have a new focus on their personal values and the things that are important to them in life. For many that includes environmental and social concerns.
Those values are increasingly playing out in consumers’ purchasing decisions. As the research concludes, consumers will switch away from brands that don’t support their new values—but they’re also ready to pay more to those that do. Airlines cannot ignore this shift. A holistic approach to sustainability—spanning environmental, social and governance (ESG) areas—is essential.
That should drive how the crew is inducted, developed and supported. It should inform conscious selection of airline, retail and other partners, as well as local and green sourcing in the entire supply chain. As Scott Kirby, CEO of United Airlines, puts it: “What the consumer wants from us is to make them feel good, and feeling good is not just about the product, it’s not just about giving them a great flight that’s on time. It’s about how they feel.”
The business travel market faces major changes too. Not only have businesses learned during the pandemic how to use remote working effectively. They also face increasing pressure to cut their greenhouse gas emissions as the global drive towards net zero picks up pace.
More than 5,000 businesses have joined the UN-backed Race to Zero, committing to achieve net zero carbon emissions by 2050—without the use of offsets—and more than 200 have signed The Climate Pledge to achieve net zero by 2040. Accenture is part of both, and has gone even further: We’ve committed to achieving net zero as soon as 2025.
Whatever emissions-cutting trajectory they’re on, every major company is likely to review the justification for all its carbon-generating activities in the drive to cut carbon.
Airlines that recognize these market shifts and lead the way on emissions are likely to capture customer sentiment and loyalty—and could seize market share as a result. Those that drag their feet are likely to be left behind.
Some airlines have already taken significant steps—and industry-level visions are now in place too.
The International Air Transport Association (IATA) has committed to net-zero carbon emissions by 2050 under its Fly Net Zero plan.1
And Airports Council International (ACI) has launched comprehensive guidance to help airports incorporate sustainability at the core of their strategies, with a global commitment to reach net-zero emissions from airport operations fully within their own control by 2050.
The primary lever for aviation is adoption of Sustainable Aviation Fuel (SAF)—a proven alternative to traditional fossil jet fuel, produced from sustainable feedstocks—which is expected to deliver 65% of the cuts needed by 2050 under IATA’s plan. The rest will come from a mix of new aircraft technology, infrastructure improvements and operational efficiencies, and offsets including carbon capture and storage.
Of course, getting on a pathway to net zero requires immediate action, with the 2020s being a decisive decade for emissions cuts. It’s why sector leaders like IAG, United Airlines, Delta, American Airlines, Heathrow Airport and Dallas Fort Worth International (DFW) Airport have backed the UN’s Race to Zero campaign, aiming to halve emissions by 2030.2
Tackling the challenge
At Accenture, we’re helping the industry navigate the new landscape:
We’ve developed carbon dashboards, powered by our proprietary aviation emissions calculator. These help airlines, regulators and businesses make more informed decisions about their travel and emissions.
We’re also backing the shift to SAF and helping to accelerate its uptake. We’re one of over 80 companies in the World Economic Forum's Clean Skies for Tomorrow Coalition, which aims to work with aviation to ensure that SAF constitutes 10% of the fuel used in aviation by 2030.3
Innovation and efficiency improvements
Beyond SAF, radical innovation in different aspects of the way we fly will be needed to hit the 2050 net-zero target. “There are plans out there for novel, competing new technologies, like electric, hydrogen, or hybrid electric aircraft," says Accenture’s David Walfisch. “However, continued efficiency improvement on current technologies remains vital.”
Alaska Airlines, for example, is driving a five-part path to net zero by 2040. As part of that, it has piloted Flyways, software that uses artificial intelligence and machine learning to help dispatchers optimize the routes flown by its planes.
gallons of fuel saved during Alaska's six-month trial in which it experienced a cut in flight times by an average of five minutes.
In the short term there are myriad opportunities for industry players to unlock quick wins. Doubling down on collaboration, cooperation and sharing of data to open up the ecosystem and optimize operations will dramatically reduce waste and increase productivity. For airlines, catering operations present an area where significant gains can be made in terms of food waste and packaging. Since recent Accenture research has revealed that recycling and reducing food waste are two of the most popular sustainability actions for travel companies to take—customers rated only carbon emissions higher—these are examples of targeted action that could have a big impact.4
Accountability for change
Like any major business transformation, sustainability demands clear executive leadership and accountability for progress through appropriate governance. Delivering on the G in ESG means putting the management systems in place, developing the right metrics and reporting transparently.
IAG has created a new board sub-committee for sustainability, and has explicitly linked senior management pay to climate targets. For 60 of its most senior executives, a share of their incentives is now linked to achievement of annual carbon intensity targets.5
“I think more and more companies will do this," says Accenture’s Jesko Neuenburg. “It’s an additional mechanism to make sure that they are taking action in the right places.”
Clear governance is critical to carbon-cutting efforts. According to a recent report from the World Travel & Tourism Council (WTTC) in collaboration with the UN Environment Programme (UNEP) and Accenture, clear targets, monitoring and reporting are critical. A Net Zero Roadmap for Travel and Tourism proposes a new roadmap framework for net zero, setting out three different decarbonization target corridors. It is recognizing that some sectors will be able to move faster than others.
The first step is setting the right baselines and emission targets now for 2030 and 2050 goals. Companies then need to monitor and report on progress. The report proposes collaboration within and across industries, and for finance and investment for the low-carbon transition, as well as steps to raise awareness and build capacities.
With the evolution of consumer values and the pressure on businesses to deliver on ESG, sustainability is now a critical component of the travel industry’s future growth.
Aviation leaders need to deliver on a holistic view of sustainability that spans all dimensions of ESG. Accenture’s new model for Sustainability DNA is a guide to that challenge. In our latest report for the travel industry, we look at the Sustainability DNA model’s five elements for sustainable leadership, built on 21 management practices, systems and processes. From supporting international agreements, to investing in new technology to increase operational efficiency, and engaging in collaborations to drive change—the opportunities for aviation are significant. This is the moment to seize them.
The sustainability opportunity
Wherever your organization is in its sustainability journey, now is the moment to review and reinvigorate the approach. Sustainability isn’t separate from pandemic recovery: It’s part of it. It’s time to get back to growth—more sustainably than ever.