© Reuters. FILE PHOTO: An airplane flies under the jet stream of another aircraft over the Italian city of Padua on September 18, 2013. REUTERS / David Gray

By Jamie Freed

SYDNEY (Reuters) – Some airlines risk failure if they do not reduce their carbon emissions faster over the next three to five years due to a mismatch between short-term business travel goals and the airline industry’s net zero target for 2050, according to an industry report.

Airlines are also at increasing risk of shareholder activism at a time when major fund managers such as BlackRock Inc (NYSE :), Vanguard Group Inc and State Street Corp (NYSE 🙂 has publicly expressed its concerns about climate change, according to the CAPA Center for Aviation and Invest Global report released on Wednesday.

“Pressure from customers, governments and investors is likely to demand an acceleration of the journey to net zero, which will clearly put pressure on airlines,” said David Wills, executive advisory director of the Australian strategy firm. reduction in carbon emissions Envest.

“The conditions are ripe for airlines that get it wrong and find themselves in a situation of potential default,” he added.

Several companies, such as HSBC Holdings (NYSE 🙂 plc, Zurich Insurance Group (OTC 🙂 Ltd, Bain & Company, and S&P Global (NYSE 🙂 Inc, have already announced plans to rapidly reduce business travel emissions. up to 70%. .

Qantas Airways chief executive Alan Joyce said last week his airline was developing an emissions target for 2030.

“Our point of view is that smart airlines will not only strive to strengthen 2050, but also improve their final views on 2030, as they will seek to engage more with their corporate customers,” said Brett Mitsch, Executive Director of Investments for Envest.

The CAPA / Envest report found that the top quartile of the 52 global airlines surveyed were on average 30% less per passenger-kilometer flown in 2019 than those in the bottom quartile.

Low-cost carriers like Wizz Air, Ryanair and AirAsia with newer fleets and higher load factors were among the top performers, while the worst were Turkish Airlines, Japan Airlines Co Ltd (JAL) and British Airways.

The report says JAL managed to break even with a carbon price of over $ 160 per tonne based on 2019 earnings, as many airlines with lower profit margins reportedly reported a loss. at a carbon price of $ 30 per tonne.

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