SAS Towards A Sustainable Journey

Transcript

Karl Sandlund:Thank you for the opportunity to be here and talk about sustainability, because to SAS Scandinavian Airlines, sustainability is probably our most important issue going forward. If we cannot quickly articulate and communicate a plan towards more sustainable aviation in the future. The easy answer could instead be to reduce or stop flying, and we don't think that that is a good scenario for society in the future. And I don't just say that because I represent an airline. I say it because I truly believe that aviation matters. The aviation industry makes it possible for companies around the world to have access to the global markets. The aviation industry makes it possible for people to travel the world, to meet with their families, to see friends, and explore new cultures. And the aviation industry makes it possible for people to meet, share ideas, and drive future development. Looking at history, one can see that many of the great ideas They have come from those who have traveled and explored the world. So the aviation industry creates a lot of value and is a vital part of the world's infrastructure. But we need to do it more sustainably in the future. Ever since Scandinavian Airlines was founded in 1946, we have been an integrated part of the infrastructure in Northern Europe. For more than 70 years, we have made it possible for people and companies to be based in Scandinavia and have access to the world. We are a middle-sized carrier with about 800 departures every day, carrying more than 80,000 people per day. And our employees do their utmost to make sure that our customers arrive to their destination safely, on time, and with a great service. Our aircraft crosses the polar circle more than 60 times per day on their way to the most northern parts of Europe. And we connect Scandinavia with places in Europe, North America, and Asia. So there you have some examples of how we are part of this infrastructure. During our journey, innovation has been a key theme. We were the first airline to fly from Europe to North America over the North Pole, one of the first to introduce electronic reservation system back in 1965, And we were one of the founding members of Star Alliance. Also today, innovation is a key theme, both when it comes to the customer offering, but also when it comes to how we innovate our production model, our operating model with different production platforms at different markets and so on. For us, as for everyone else in this room, in this industry, in other industry, data and digitalization is key. Both to enhance the customer experience with chatbots, new services and features and so on, but also to improve operations. I know you were talking about that yesterday as well, and I will give some more words later. But by help of advanced analytics and better data, we can improve efficiency in operations and thereby increase quality, but also improve the working environments for, for our employees. Of course, we do everything of this. Everyone does. But in addition, we spend a lot of time thinking and trying to innovate how we can make air travel more sustainable in the future. Because our customers demand that. The society demands that. Our corporate customers, they demand that. They want to be able to continue to fly, but they want to do it with less climate impact. Looking at the UN 17 SDGs, we have defined number 12 and 13, the most important to us, and those are the ones about climate actions. And I'm sure that we in the future will have aircraft that can fly without emissions, electric or hybrid. I'm really looking forward to the day when we can have those in commercial traffic. But we cannot wait until then. We need to go from talk to action and also communicate what we are doing. In order to make sure that we have a more sustainable aviation in the future. And we in Scandinavian Airlines, we said that we want to be in the forefront on this journey from the old to the new. So in addition to fully support all the long-term targets set, we have also defined and set some what we believe are tangible and ambitious targets for midterm. By 2030, we should— we will reduce our own CO2 emissions by 25%, including expansion. We will operate equivalent to all our domestic flights, which is a large share of our production, on sustainable aviation fuels, biofuel or biojet. And 100% of our customer offering will be sustainable. To be able to reach those targets, We work with it throughout the company, and it's fully integrated in our overall strategy. So what are we doing? Well, I will give some examples of the key things that we focus on right now. And one is, of course, fuel efficiency. We all know that continuous fleet renewal is essential in order to increase the fuel efficiency and reduce emissions from At the moment, we are phasing in the most modern aircraft available at the market right now. In a couple of years, we will have a one-type fleet consisting of Airbus A320neos for short-haul, and we are phasing in the A350s for long-haul operation. Those aircraft are about 15 to 30% more efficient than the aircraft that they replace. Significant impact on our climate footprint. This is a large investment for us, but it's an investment both in the network and customer offering, but also in more sustainable operation in the future. Increased fuel efficiency is more than new aircraft. We work a lot on the operational procedures to have greener flights with green approaches, taxiing with one engine, Better flight planning, make sure that we right-size, that we have the right size of aircraft on the right route, etc. As mentioned before, we work a lot of data and analytics when it comes to production planning to see where should we have the buffers in the network to avoid delays and thereby unnecessary fuel burn. And of course, we work with weight by replacing old seats, with new lighter ones, replacing carpets, replacing carts, etc., we can remove weight from the aircraft and thereby fuel emissions. So increased fuel efficiency is one important dimension for us. Another is the kind of fuel that we use. We believe that sustainable aviation fuels or biofuel, biojet, is an important bridge towards the future. From a lifecycle perspective, those kind of fuels have up to 80% lower CO2 emissions than traditional jet fuel, and we can have it in our existing aircraft. So already today we buy and fly on this kind of fuel, and in 10 years, as mentioned, our target is that we should operate All flights corresponding to all our domestic production on this kind of fuels. And we have invited our customers, customers on this journey. Since last summer, our customers can, if they want to, upgrade their tickets with biofuel as an ancillary product in the booking flow. And we have developed a corporate sustainability program where our corporate customers can buy biofuel for their travel. And we see that the customers in Scandinavia, they are interested. However, there is a challenge, and that is supply. Biofuel is a scarce resource with a demand that is much higher than the supply, which makes it, A, hard to get the volumes that you need, and B, the prices are high. And that's why we engage with the political society, with suppliers and other stakeholders to make sure, or try at least to make sure, that the right framework exists in the future for securing large-scale commercial production of sustainable fuels, because the technology exists. And in many parts of the world, we also have the raw material from food waste or waste from the agriculture sector or forestry. And in the future, there will be even more efficient sustainable fuels such as power-to-liquid or gas-to-liquid. Which is more efficient, efficient, and also can be produced at more places around, around the world. We are working with energy companies to, to secure that we can have production closer to our hubs in Scandinavia. One example is a letter of intent that we have signed with Preem with the target that we should be able to buy considerable amounts of biofuel produced in Scandinavia In just a few years, so sustainable aviation fuel is another important area for us in the strategy towards more sustainable aviation. But as mentioned, we are working with this throughout the company, and another important area is of course the customer offering—the things that our customers see and feel when they travel with us—and that's why we work under the device stop. Replace or reduce throughout the customer journey. Everything to reach our targets of 100% sustainable materials with 100% recycling where applicable in the future. One example is the packaging, the material on board. We work a lot with innovation when it comes to this, both ourselves and together with suppliers. Last week, actually, we launched a new packaging of the in-flight meals on short haul. Which will save more than 50 tons of plastic every year. And this new packaging is 100% fossil-free, which is a huge step for us. The food itself, it's made from local producers and the meals varies depending on season. Everything to reduce the climate impact. We have invited our customers to preorder or preselect the food to make sure that they get what they want to, but also that we can eliminate food waste. So both waste and weight from the aircraft. We are implementing a new digital onboard logistics system so that we, with better data, can analyse what kind of items will there be demand for on each and every flight, depending on day of week, type of destinations, and so on. Again, to make sure that our customers have the things that they want to, but also to reduce unnecessary weight on board the aircraft. Because every step matters when it comes to weight. And that's why we have stopped selling tax-free on board our aircraft. We have removed the traditional newspapers. Might seem like small decisions, but they sum up towards the targets to make sure that we have it more sustainable in the future. We also realize that we need to address the emissions that we cannot eliminate right now. And that's why we, since a year ago, CO2 offset for all travel made by our frequent flyer members, the Eurobonus members, and for next-generation travelers, the youth travelers, as part of the customer offering. So this year we have compensated for about 40% of all trips made with SAS. If you're a member of our frequent flyer program, then we compensate for all your travel. So there you have some of the things that we are doing right now in order to reduce our own emissions as much as we can. Increased fuel efficiency, introduction of new sustainable aviation fuels, and working with the with the customer offering. But we also need to think ahead. What's next? And I'm myself, I'm an engineer, I'm a technology optimist. I believe that we will have new innovative technology in the future that will help us address this issue. Since we started to walk this earth as mankind, we have solved our issues with new innovative technology. And I don't think that 2020 will be the year when we stop doing that. But we are an airline, not technology experts, and that's why we instead have partnered up with suppliers and other experts to give our contribution to what can be the next-generation aircraft. One example is the joint research project that we have together with Airbus, where we look into what kind of infrastructure is needed for future-generation aircraft. For example, the energy infrastructure at the airports, network planning capabilities, operation in different weather conditions, and so on. And this future generation aircraft, it might be electrical, hybrid, or hydrogen-based. The suppliers are assessing different alternatives, different platforms as we speak. It's not science fiction. Especially not for, in the beginning, shorter flights. Smaller aircraft. I'm sure that we will see aircraft that can fly and can operate without emissions in the future. But as mentioned before, we cannot wait only for that. We need to both make sure that we research what, what we can do in the future, but also take steps here and now and communicate those steps and see what we are doing. So Going back to, to where I started, we truly believe that aviation matters. We connect people and companies in a time-efficient way throughout the globe. And that is something that we also want future generations to be able to do, to explore the world and to build successful global companies. And that's why we say that this is probably one of our most important issues going forward. And as you, as you, as you hear me saying, we are doing a lot. So we need to both do the things and communicate the things. SAS was founded more than 70 years ago to enable for people and companies to be based in the outskirts of Europe and have access to the world. And that is something that we believe is as important in the future And that is something that we want to continue to invest and develop also going forward. Thanks for your attention. Thank you, Karl.

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