Airport eco-credentials will impact network decisions, airline CEOs say
By VICTORIA MOORES
The CEOs of five Nordic airlines—Flyr, Norwegian, Norse Atlantic Airways, Scandinavian Airlines (SAS) and Widerøe—have unanimously agreed that an airport’s sustainability performance will impact whether or not they fly there.
“I think that will be a factor in decision-making in the future. Absolutely,” SAS CEO Anke Van der Werff told delegates at Routes Europe 2022, adding that airports “closer to home” are already convinced that sustainability is the way forward.
“Of course, that will matter,” Widerøe CEO Stein Nilsen said. For Widerøe, access to electricity will be important, because the company plans to start transitioning to a zero-emissions electric fleet from 2026.
Norwegian CEO Geir Karlsen agreed with his co-panelists, while giving a slightly more hedged reply. “It will be a factor, but not the only factor,” he said.
Van der Werff said it is imperative that the environmental sustainability transition must be financially sustainable too.
“If I see some airports trying to hike prices by 30-50%, because that’s we we’re talking about, that’s extortion. It just won’t work. You’ll price yourselves out of business at some point,” he said.
During an earlier presentation, Airlines for Europe (A4E) managing director Thomas Reynaert estimated that the EU’s Fit for 55 eco-regulation proposal could cost the industry €5.5 billion ($5.8 billion) per year in 2025, rising to €34.4 billion per year by 2050.
“We’ve modeled it,” Van der Werff said of the cost impact. “I think it would be irresponsible not to do it. So, in our SAS Forward plan, it is absolutely included. It's a huge bill and, again, it links back. It's infrastructure, it’s ecosystem. The more costs are passed on to the airlines within that ecosystem, the weaker we'll all be.”
Flyr CEO Tonje Wikstrom Frislid is looking to airports to up their technology game and invest in digitalization, creating a better passenger experience. “A more customer-oriented operation would be good,” she said.
Sticking with the people theme, Norse Atlantic Airways CEO Bjorn Tore Larsen said a positive attitude will be the key ingredient in his airport partnership decisions.
“What we are looking for, more than anything else, is passion. For any relationship to work, it really needs passion. You need somebody who's willing to go the extra mile to make sure that our goals are met, because then their goals are met as well, so our customers will have a fantastic experience with the least possible [carbon] footprint.”
For Norwegian, efficiency is an important decision factor, because it enables the LCC to run a tight schedule with 25-minute turnarounds. “We need to depend on the people on the ground and that will also lead to profitability,” Karlsen from Norwegian said. “We would like to have discussions with airports where we are not flying, to see if there are any incentive schemes, if we can work together to try to develop a product, a market and so on.”
Larsen from Norse Atlantic extended this efficiency thread to talk about air traffic management. He wants to see more direct routes, rather than “zigzagging all over,” and more airports geared up to accommodate genuine continuous-descent approaches.
“You have these famous continuous-descent approaches, which are never continuous descent. They take the aircraft down very early and then you burn much more fuel—maybe double as much fuel as you need to,” Larsen said.
He also called for electric pushbacks all the way to the runway, to reduce fuel use during taxi.
“That’s going to save us hundreds of kilos for every departure, so if we have airports who are willing to invest in that type of technology, I think it will be of interest,” he said. But, of course, then the question is how do they generate that electricity.”
Rising oil prices are another factor that is impacting airline network planning. “That point is already here,” Norwegian’s Karlsen said, a point which was immediately supported by Van der Werff from SAS. When Norwegian was planning its summer 2022 schedules, back in autumn 2021, quite a few routes were profitable at $800-$850 per tonne, but Karlsen said fuel has now hit $1,200 per tonne. “Obviously that hits the routes and hits the profitability,” he said.
Higher ticket prices have absorbed 30%-40% of that fuel-price increase, but Karlsen questioned whether this will continue.
“The competitive landscape will decide,” he said. “But it's quite obvious that we have not taken in the fuel price increase in the ticket prices so far, not even close.”
Norse Atlantic is planning to launch on June 14 and the volatile business environment has made it difficult to keep pace, Larsen said.
“We haven't even started [flying] and we are hit by all these [COVID] variants, by oil and so on,” he said. “But we were lucky enough to be small and nimble. And we have adjusted our program as late as a few weeks ago, for summer 2022.”
