Airline companies leading in the ESG space
The future of the travel & tourism industry will be shaped by a range of disruptive themes, with environmental, social and governance (ESG) being one of the themes that will have a significant impact on airline companies.
According to GlobalData’s Q3 2021 Consumer Survey, 56% of global respondents stated they ‘somewhat’ or ‘completely’ agree that they are more loyal to brands that support green and environmental matters, and 54% echo this sentiment for brands that are loyal to human and social rights matters.
These strong percentages suggest that companies with transparent ESG strategies, which can demonstrate positive work to address environmental and social issues, could win the loyalty of travellers that may be undecided on which company to use for a specific aspect of their trip. Transparency on ESG matters will not only appease consumers; it is now required by several other stakeholders and potential future ones.
Investors will often assess a company’s ESG performance when conducting due diligence. Therefore, many company directors are allocating increasing amounts of capital and resources to address ESG aspects and increase attractiveness. According to a GlobalData poll (ended October 19, 2021, with 1,500 responses), 78.7% of respondents stated that their company now monitors ESG performance directly alongside financial performance.
However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.
According to GlobalData’s thematic research report called 'ESG in Travel & Tourism', leading adopters include: easyJet, JetBlue, Wizz Air, Qantas, Southwest Airlines, Turkish Airlines, Delta Air Lines, Air France KLM, Emirates, and International Airlines Group.
Insights from top ranked companies
easyJet is a low-cost carrier (LCC ) that operates 1,100 routes across more than 35 countries. The company sells its flights through its own website and app, as well as through third-party agents. It is fully committed to the UK Government and EU targets of net-zero emissions by 2050.
In November 2021, it joined the UN-backed Race to Zero, through which it committed to set an interim science-based target for 2035 and reach net-zero carbon emissions by 2050. Its sustainability strategy has three pillars: tackling carbon emissions now, stimulating technological innovation for the future, and going beyond carbon. The company also regularly publishes gender pay reports to promote transparency.
Wizz Air is an LCC . The company’s services include flight booking, seat reservation, travel information, hotel booking, car rental booking, group booking, web check-in, and e-services. Through its subsidiaries, Wizz offers scheduled passenger services through a fleet of medium and long-haul flights.
Wizz Air has one of Europe’s youngest aircraft fleets, and one of the lowest CO2 emission rates in the European aviation industry. In 2020, carbon emissions per passenger kilometre were 57.28 grams, down from 59.9 grams, which is almost half the industry average.