Airlines are routinely reporting their fuel consumption. Good.
Airline CO2 emission models are improving and becoming more accessible.
Good. Companies are estimating their travel-related carbon emissions.
Buyers are using the wrong KPIs to judge airlines on CO2 emissions.
Not good. Travellers are using the wrong metric to choose the
least-harmful flight itinerary. Not good.
There is no question that measuring the absolute quantity, e.g. 2,000
metric tons, of travel-CO2 emissions is necessary. This absolute
measure is vital, as it reports what must be reduced to protect the
The relative problem
The problem is with relative metrics, those designed to compare CO2
emissions from one airline or travel programme to another’s. Examples of
current relative metrics are CO2 per passenger or CO2 per mile flown.
These current metrics seem well-suited for the task of comparing
airlines, benchmarking travel programmes and judging the climate impact
of the various flight options in a city pair.
It seems obvious that a smaller number, e.g. 200 kg CO2 per
passenger, is better than a larger number. If that were true (it’s not)
then we should support anything that helps drive down this relative key
performance indicator. Let’s think harder about that.
Consider the consequences
How can an airline make its CO2 per passenger or mile flown metric
smaller? One way is to place more economy seats in its aircraft. The
more seats, the bigger the denominator and the smaller the metric’s
value. How does an airline fill those extra seats? By reducing its fares
which increases the demand for travel. The higher the demand, the more
people flown, the more fuel burned.
Note there is no need for this airline to improve its fuel efficiency
or reduce its CO2 emissions. This airline will get good marks on the
per-passenger KPI purely as a result of its low fare, dense seating
business model. Worse, the low fares leave the airline little margin to
invest in sustainable aviation technology.
Corporate travel programmes using the current CO2 per passenger or
mile KPI risk steering their travellers to airlines with a low-cost
business model. Travellers looking at the CO2 per passenger metric in a
shopping tool will think the low fare, high density carrier is the best
But low-priced tickets mean more trips taken from the corporate
travel budget. Low trip costs make it easier to approve travel for
low-value meetings. The result is more low-value travel, not less, and
less profit margin for airlines.
Are those the outcomes we want from a climate perspective?
What’s the goal?
Achieving any significant climate goal requires aligning actions by
airlines, companies and their travellers. The critical question is to
which goal are we aligning?
Reducing the quantity of airline CO2 emissions is a very different
goal from improving the airline industry’s CO2 efficiency. The reduction
goal reduces the airline industry’s impact on the climate, full stop.
The CO2 efficiency goal can be achieved while increasing an airline’s
These are starkly different goals. One reduces airline emissions. The
other lets them grow so long as they grow at a slower pace than the
growth in passengers or miles flown. These goals are not compatible.
Which one should we choose?
Reducing emissions is best
The only way to significantly reduce airline CO2 in the short term is
to travel less. This should be the north star for every environmentally
responsible travel programme. The questions are how to achieve this
goal and how to judge one’s progress.
One option is to slash the travel budget. This will reduce travel,
but it harms the airline industry’s ability to fund investments in
Another option is to make flights more expensive by adding a
substantial carbon tax to each flight. This will reduce demand for
low-value travel (good) and help airlines fund their sustainable
aviation efforts (good). But it does nothing to make the trip better,
nor does it provide a better KPI for making climate-aligned travel
Decarbonise the spend
The key is to decarbonise our spend on air travel. The KPI to track
this is CO2 per dollar of airfare. For example, a ticket with 500 kg of
CO2 and a price of $500 has 1.00 kgs CO2 per dollar of airfare. This
“CO2 per $” KPI creates a powerful alignment of actions and consequences
for all parties striving to reduce airline emissions.
Airlines can reduce this KPI by decarbonising their flight operations
and – this is important – by raising prices. Higher airfares will
shrink the KPI’s value while reducing demand for travel. Higher airfares
will make it harder to justify low-value trips and will chew up travel
budgets faster, so fewer low-value trips will be taken. Airlines will
have more profit margin, not less, for investing in sustainable aviation
How do travellers benefit from making this KPI smaller? By displaying
this metric in the booking tool, the traveller can be guided to
purchase a more expensive but less-carbonised ticket. The higher-priced
fare may qualify the traveller for better service by the airline, should
there be any disruption. These higher fares will more quickly earn the
frequent traveller higher status and better privileges.
Companies committed to a “less travel, better results” travel
strategy can offer first and business class seating to their travellers,
subject to finding fares that have an acceptable combination of low
carbon and justifiable price. Think “lowest carbonised airfare” as a new
travel policy plank.
What really matters
This new KPI reveals each airline’s progress at decarbonising their
flight revenues, an important factor for today’s procurement teams. A
recent analysis of US airline data by Flight BI shows that Delta had the
lowest amount of CO2 per dollar of flight revenue. Yet Delta ranked
near the worst when using the CO2 per passenger and per mile flown
metrics. Procurement teams need to choose their metrics wisely.
The idea of willingly paying higher prices for airfares will not sit
well with managers stuck in a cost-first travel strategy. They should
their ask senior management if low prices still take priority over
reducing travel emissions. For many companies the answer is no, that the
higher priorities are fewer but more successful trips taken by healthy,
productive and willing travellers. See tClara’s white paper “How We
Meet Matters” for evidence supporting this claim.
Low fares and more low-value trips are not compatible with
sustainable corporate travel. It’s time to embrace the strategic
benefits of taking fewer trips at higher prices with less carbon. This
new KPI reveals how committed we are to these actions. Adopt it now.
Source: Business Travel News