As air travel picks up across the globe following some of it’s quietest months this millennium, those with a mind on the carbon footprint of aviation will likely be hoping that the planetary does not return to the air with the zeal it had prior to the global pandemic.
Transport in total contributes to 23% of CO2 from fossil fuels. Aviation, is one of the largest culprits, the European Commission noting that if all airlines were one nation they would be in the top 10 polluters. CO2 is only a fraction of the picture however, jets emit high volumes of Nitrogen Oxides, which pose threats to both human and environmental health, as well as contributing to the formation of Ozone near to the earths surface. At cruising altitudes Ozone contributes far more strongly than CO2 to global warming, as well as posing health threats.
It appears that public opinion on air travel is also evolving due to COVID-19, with 58% of respondents to a Publicis Sapient survey noting they were thinking more about sustainability now than before the pandemic, whatsmore, 62% said they would be more likely to purchase tickets from an airline making concerted sustainability efforts. Furthermore, airlines have high exposures to climate risk, with flight groundings due to extreme weather costing airlines $74 per minute.
Air travel’s polluting credentials combined with the impact cliate change could have on the industry, as well as the implications of public opinion make it unsurprising that numerous airlines are significant pains to change their image before they become totally unacceptable to the public. Leading the pack are JetBlue, who had planned to become carbon neutral by July this year prior to the pandemic, as well as pumping $590M in equity into Electric aviation startup Joby Aviation , however this commitment to sustainability has yet to sway investors, as May market cap gains were decimated when S&P dropped the firm’s credit rating to B+ earlier this month.
JetBlue’s plight highlights the extreme challenges faced by the industry, with an estimated $300bn of revenue lost by the sector over the preceding months, only for companies to return to a more scrupulous environment than even those aware of shifts in public opinion could have anticipated. It might therefore be best advised for ESG investors to turn a shoulder from the aviation industry for now, particularly as key players in the industry make further harmful moves by lobbying for reduced emissions regulations, as well as a recent from HSBC that the pandemic has materially impeded emission reduction efforts from airlines.
The future is not entirely dark however, as calls increase for airline electrification, and a recent commitment from the UK government to net-zero flight emissions by 2050 through the formation of the net zero-council.