Delta Air Lines Leads the Industry in Sustainability Initiatives

When choosing an airline to fly for vacation, holidays, or business, Delta Air Lines is a popular choice due to their common household name and upstanding reputation.  However in recent news, the company has been facing internal reconstruction of their sustainability plan due to the environmental impact of their industry. The rapid expansion of air travel and a proliferation of low-cost airlines is creating a booming tourism industry catering to a growing middle class. This growth may be a positive shift in terms of economy; however, in terms of our environment, the CO2 emissions from flights alone are greatly contributing to climate change.  According to the New York Times, the U.S was responsible for almost 25% of global passenger flight-related carbon emissions this previous year.  Delta, being one of the most used airlines in the world, is faced with the challenge of how to shift their current operations to align with the needed change to combat the warming of the planet. To add to this challenge, the COVID-19 pandemic has had a tremendous impact by decreasing air travel by 70%, thus creating financial insecurity across the industry.  It is uncertain as to whether Delta’s new sustainability efforts given these trying times will meet the expectations of both their stakeholders and those in search of a true environmental change from the company.

Delta Air Lines was ranked 68 amongst The Forbes Fortune 500 List, thus an influential force within both the United States economic and social fields . The company prides itself in being one of the largest airlines in terms of traffic, with over 200 million passengers each year.  Aside from its passenger travel, it also provides cargo carrying services via its 1,000 plane fleet. The airline employs just over 90,000 employees worldwide, with a 3% growth in terms of employment from 2018-2019.  The annual revenue for the 2020 year reached a whopping $47 billion with a 5.8% increase from the previous year driven primarily by business class and cabin class ticket sale increases. As for stock price, it is currently wavering around $32.15; however, a year ago, the stock price was sitting around $53.20. The impact of the pandemic on air travel surely shows in their stock price, as it has not been this low since mid-2014.  I do believe that Delta holds a strong position in terms of their revenues due to their reinvestments into their operations and ticketing sale changes.  In addition, their profits have seen a 21.1% increase as a result of a decrease in fuel costs.  On the other hand, the savings that the customer has witnessed due to the decrease in fuel costs makes me question the quality of the fuel that they are using, and in the long-term if it's a sustainable option.  In comparison to their competitors, Delta Air Lines is outperforming in terms of financial stability, even with the pandemic in mind.

Beginning in the early months of 2020, Delta Air Lines has committed $1 billion over the next 10 years to catalyze their new sustainability plan targeted at Carbon neutrality. The sustainability plan is built upon three comprehensive pillars to achieve their goal: fuel-efficient aircrafts, carbon-neutral growth, and lowering emissions.  The fuel-efficient aircraft pillar is focused on purchasing newer, more fuel-efficient aircrafts and to eventually phase out all of their older, less-efficient aircrafts. As for carbon-neutral growth,  Delta voluntarily purchased over 14 million carbon offsets since 2012, thus beginning this journey early compared to other airlines. Lastly, by implementing electric ground vehicles in their operations, Delta has already cut their emissions by 9%, but in comparison, they plan to cut that number in half by 2050.  As a side project, Delta has also committed to an in-air flight project of recycling all of their drink materials of each flight.  Although their plan is simple, I believe that it is both achievable but also a goal that pushes the company to strive past their abilities.  However, the Delta Air Lines CEO, Ed Bastian, said in an interview that ‘I don’t see the switch to 100% biojet fuels happening in our lifetime.’ Biojet fuels are the most sustainable option for flight-travel, and truly the best option for reducing carbon emissions. This statement brings to question whether the sustainability efforts being made by Delta are just for the PR aspect, or if they truly treasure the importance of reducing their environmental impact.

From an overall perspective, I believe the sustainability plan presented by Delta Air Lines is comprehensive in both their goals of which touch upon both carbon emission reduction, recycling, and technological investment, but also in their integration of the plan within their pre-existing structure.  The main focus of their sustainability plan is investing $10 billion into research of cleaner fuel, as well as decreasing their carbon emissions by half by 2050.  Delta’s strengths lie in their clarity of their plan, as well as their presentation of the plan.  Being one of the first to roll out their intentions within their industry, they are shaping other airlines' plans, of which none are as ambitious as Delta’s. Another strength of Delta’s comprehensive plan is their yearly reporting. Given they have been mapping their sustainability plan out since 2012, but weaving it into their recycling initiative has given it an advantage by clear starting points for reference, as well as progress points for their current data.  My biggest concern when hearing from the CMO of Delta Air Lines, was that he mentioned how important it was to the company to have social engagement within the organization. However, the projects of which are being presented come from a higher level such as investment, and thus I wonder what sort of small projects are given to the organization’s coalitions.  As a whole, I feel that Delta Air Lines’ Sustainability initiative is well thought out and achievable, while still maintaining a sense of ambition; however, it lacks details upon their social engagement within the organization, and lacks a sense of furthering the project after reaching their 2050 goal.