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“Covidair” Ready for Climate Protection Landing?

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“Covidair” Ready for Climate Protection Landing? “CovidAir” ready for climate protection landing? A case study of Austrian Airline’s CSR response referring to climate protection in relation to the COVID-19 pandemic DIPLOMA THESIS International Economic and Business Studies Assoz.-Prof. Dr. Esther BLANCO Department of Public Finance The University of Innsbruck School of Management Submitted by Ruth MACHREICH, BSc 01441696 Innsbruck, October 2020 Abstract In order to contain the outbreak of the COVID-19 virus borders were closed worldwide, forcing the airline industry to a global standstill. This study is a case study of Austrian Airline’s CSR response referring to climate protection in relation to the COVID-19 pandemic. Since the focus was on the Austrian Airlines, the Balance sustainability report of its parent company Lufthansa Group was examined for a qualitative content analysis. This included a closer look at the chapter on climate and environment and its most important environmental goals, initiatives and measures. The filtered out measures were further completed by the environmental measures, introduced by the Austrian government as a part of the COVID-19 financial rescue package for the Austrian Airlines, and the respective additions and changes were discussed. In addition, an expert interview with Ulla Rasmussen from the VCÖ was conducted and gives the opportunity to better classify the changes triggered by COVID-19 to improve climate protection inside the aviation. The linking of financial subsidies with ecological measures showed the commitment to climate protection and the awareness of both, the Austrian Government and the approving Austrian Airlines that an even more active role for climate protection and a sustainable aviation industry is essential today. Further, results show a concretisation of the ecological measures and clearer guidelines which must be pursued and achieved within a given timeframe so that, firstly, the financial subsidies do not have to be repaid and, secondly, the Austrian Airlines do not become state-owned. At this stage, however, it is not possible to make definitive statements on the overall impact of COVID-19 on CSR policies at the Austrian Airlines, as the global pandemic is not yet overcome. Table of Contents Abstract 1 Introduction ...................................................................................................................... 1 2 Literature review .............................................................................................................. 3 2.1 The impacts on health, society and economy of SARS ............................................. 3 2.2 COVID-19: Facts and insights ................................................................................... 6 2.3 Aviation industry: Its impacts and benefits ................................................................ 8 2.4 CSR and COVID-19 in aviation............................................................................... 14 2.5 Lessons learned from past pandemics ...................................................................... 19 3 Methodology ................................................................................................................... 23 3.1 Content analysis ....................................................................................................... 23 3.2 Coding process ......................................................................................................... 26 3.3 Expert interview ....................................................................................................... 28 4 Results ............................................................................................................................. 28 4.1 Sustainability conditions for Austrian Airlines defined by the government in the course of the COVID-19 pandemic ...................................................................................... 28 4.2 Shifting short-haul flights to rail .............................................................................. 32 4.3 Reducing emissions and increasing fuel efficiency ................................................. 33 4.4 Voice and dialogue ................................................................................................... 38 4.5 Sustainable technologies .......................................................................................... 40 4.6 Further conditions .................................................................................................... 41 4.7 Austrian Airline’s data on the second interim report 2020 ...................................... 45 Contribution ......................................................................................................................... 47 Limitations ........................................................................................................................... 47 Suggestions for future research ............................................................................................ 48 Conclusion ............................................................................................................................ 48 5 Bibliography ................................................................................................................... 50 Appendix ....................................................................................................................................I Affidavit .................................................................................................................................. I Expert interview .................................................................................................................... II Factsheet Austrian Airlines ................................................................................................... V List of Tables Table I: Data second interim report 2020 Austrian Airlines, Source: Lufthansa Group (2020), p. 17 .......................................................................................................................................... 45 Table II: Categories Environmental Management .................................................................VII Table III: Categories Fuel Consumption and Emissions ..................................................... VIII Table IV: Passenger Transportation 2018 ............................................................................ VIII Table V: Categories Climate Protection, Technological Progress ........................................... X Table VI: Categories Climate Protection, Improved Infrastructure ........................................ XI Table VII: Project Profile, Network Collaborative Management ..........................................XII Table VIII: Categories Climate Protection, Operational Measures ..................................... XIV Table IX: Project Profile, Expanded Connex Info ............................................................... XIV Table X: Project Profile, Optimised Filling of Fresh Water Tanks...................................... XIV Table XI: Project Profile, Development of Company Own Approaches Based on Most Modern Navigation ................................................................................................................ XV Table XII: Measures taken by the Austrian Airlines to reduce fuel consumption and thus CO2 emissions........................................................................................................................ XV Table XIII: Categories Climate Protection, Economic Measures ....................................... XVI Table XIV: Categories Energy and Resource Management ............................................... XVII Table XV: Categories Active Noise Abatement .................................................................. XIX List of Figures Figure I: Austrian aviation secures jobs, Source: Own presentation based on the factsheet of the Austrian Airlines attached in the appendix ........................................................................ 29 Figure II: Importance for industry and value creation, Source: Own presentation based on the factsheet of the Austrian Airlines attached in the appendix ..................................................... 30 Figure III: Rescue Aid Package for the Austrian Airlines, Source: based on ORF.at (2020) 31 Figure IV: Direct and indirect CO2 emissions of the Lufthansa Group 2018 ........................ IX 1 Introduction The Coronavirus Disease 2019 (COVID-19) outbreak has intensified the change in the aviation industry all over the world. The realisation that in times of climate change, unrestricted freedom in the air must be massively curbed is drawing wide circles. As greenhouse gas emissions from commercial aviation are rapidly increasing (Graver et al., 2019) flying will not be able to remain the mass phenomenon it has become. Nevertheless, more and more people are flying worldwide. An Environmental Awareness Study by the Umweltbundesamt (2019) in Germany found that in 2018, 4.3 billion passengers boarded an aircraft and that is more than ever before. Since the beginning of the 1990s, the number of passengers has more than doubled in a global context. Although the aviation industry regularly tries to reduce its share of global emissions, in Austria as well as globally, the studies shows that air traffic currently contributes 5–8% to the global climate impact (Umweltbundesamt, 2019). In an open letter, Austrian researchers address the federal
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