Air New Zealand: consider sustainability like safety

Summary

• Climate change is not only an operational risk to airlines, but also a commercial risk if community expectations of decarbonisation are not met.
• Many airlines are actively progressing sustainability agendas. But others, severely impacted by COVID-19, are more focused on immediate financial survival, and may defer decarbonisation actions.
• Air New Zealand expects to be trialling electric aircraft in service by 2030.
• The airline expects that 50 per cent of its 2050 net zero emissions target will be accomplished using sustainable aviation fuels (SAF).
• To reduce its waste to landfill by 60 per cent within five years, the airline is now engaging with suppliers to change packaging of their products.

Air NZ CEO mandates strong push to help increase industry sustainability

Captain Morgan said Air New Zealand's CEO, Greg Foran, "recognises the difficulty the industry is in", and "has given us the mandate to push, and push harder" to help the airline and the industry to reduce emissions.

"If we became agnostic to the commercial implications and thought of sustainability in the same way that we think about safety, I'm quite sure that we'd recognise that we've got major issues to solve, and that we'd be incentivised to create solutions to actually solve those problems", he said, adding that the airline was "really challenging" the International Air Transport Association to consider this approach.

In addition to ethical considerations, Captain Morgan said there were potentially severe commercial consequences for failing to address sustainability, as customers focused more on the impacts of climate change when making purchasing decisions.

Lack of attention to environmental concerns represents a huge commercial risk to airlines

"Climate change is huge on our risk ledger, not only with regard to operations, but also the issue of propensity for travel", Captain Morgan said.

"Customer-centricity at the moment sees that people are concerned about the environment. My view is that good airlines are recognising this is a real issue for the communities that they serve, and if they want to enjoy the trust of those communities, and therefore their business, they're going to have to come up with solutions.

"Some airlines are thinking very deeply about sustainability. But there'll also be a number of airlines that are actually struggling, and are in survival mode, and of course this issue can sometimes get put to the back of the queue.

"As far as Air New Zealand is concerned, we see sustainability as a clear platform in our strategy. And the reason for that is because the clock is ticking. The industry has got commitments to live up to and to deliver, and as long as we prevaricate and delay, we're not going to, as an industry, solve the problem that we have to solve.

"Fundamentally, for us, it's about decarbonisation. And decarbonisation is largely achieved by two things. One is zero emissions aircraft and the other is a sustainable aviation fuel supply chain and production."

Air New Zealand is focused on sustainable aviation fuels, green hydrogen, electric aircraft, and waste reduction

Captain Morgan said that by 2030 he expected Air New Zealand to be trialling electric aircraft for short haul operations, potentially starting with domestic freight, and that by 2050, 50 per cent of the carrier's net zero emissions target would be met by using sustainable aviation fuels.

"We don't feel there's any further work to be done on the SAF technology", he said. "The conversation's moved past that. Technology is well advanced. But we need the policy settings from government to make it viable to produce this product in New Zealand, and to enable it to be consumed and uplifted by the operators.

"We're also very interested in green hydrogen, and we're very interested in electric. We're talking to a couple of manufacturers at the moment. I would quite like to see by 2030 an electric aircraft operating, probably as a trial. It may well be a single-engine aircraft in the fleet before the end of the decade. I think it's about 10 years before we'll see a viable twin-engine 20-30 seater, but I'm happy to be surprised."

Captain Morgan said Air New Zealand was speaking to suppliers about opportunities and initiatives to reduce aircraft emissions and had asked European turboprop manufacturer ATR, whose ATR 72 aircraft the airline operates, to "start thinking about new technology for us".

But he said for electric aircraft to be introduced there was also a requirement for significant infrastructure to ensure a continuous, secure supply of clean energy.

"A big part of the conversation, particularly in New Zealand, is ensuring that there's a green hydrogen supply chain, as well as the airports, when they're thinking about development, thinking about the infrastructure that they'll need to be able to support the operations", Captain Morgan said.

As well, to help reduce waste, Air New Zealand is requiring suppliers to come up with more sustainable packaging.

"Anything now that goes on the aeroplane has to be packaged in something that's going to be able to meet that expectation," he said.

Watch the full interview below: