The Motivations for Environmental Commitment in the Airline Industry: A Case Study of Scandinavian Airlines Author Lynes, Jennifer Kristin Published 2004 Thesis Type Thesis (PhD Doctorate) School School of Environmental Planning DOI https://doi.org/10.25904/1912/3263 Copyright Statement The author owns the copyright in this thesis, unless stated otherwise. Downloaded from http://hdl.handle.net/10072/367077 Griffith Research Online https://research-repository.griffith.edu.au The motivations for environmental commitment in the airline industry: A case study of Scandinavian Airlines Jennifer Kristin Lynes Hons. B.Comm. (Guelph), M.E.S. (Waterloo) School of Environmental Planning Faculty of Environmental Sciences Griffith University Submitted in fulfillment of the requirements of the degree of Doctor of Philosophy December 2004 i ii To my grandfather, Bill. iii iv Abstract The greening of management theory suggests that to ensure the environmental sustainability of businesses, a paradigm shift is required away from valuing profit maximisation as the fundamental objective of business, towards incorporating more ecocentric goals and corporate social responsibility into the management equation. The development of mechanisms and tools for a business’s environmental sustainability needs to take into consideration the complex issue and value-laden environment in which corporate environmental policy-making occurs, if tools are to be socially and politically legitimated. In this policy-making context there has been growing importance placed on the role of social science in environmental decision- making, as the natural sciences alone may no longer be sufficient to guide the development of sustainable environmental management. This thesis uses a case study of Scandinavian Airlines (SAS) to examine an airline’s decision-making processes and drivers for environmental commitment. The airline industry is the focus of this research. Although the airline industry is part of the service sector, it possesses several characteristics similar to those of manufacturing industries including intense regulation, high entry barriers and high capital costs, with tendencies towards oligopolies. It thus provides an interesting juxtaposition between the ‘heavy’ industries sectors such as the chemical, mining and energy sectors (the focus of much of the empirical research on environmental motivations) and the more consumer-oriented service components of the service industry. The increasing uptake of ecolabels and benchmarking practices in service sectors such as the tourism industry demonstrate growing corporate interest in voluntary and market-based mechanisms to address the management of environmental impacts. Although aviation has been examined with respect to its impacts on the environment, it has not been considered with regard to the internal management processes which are used to develop company policies. The research for this thesis was carried out using a mixed method approach for data collection that included interviews, an interactive discussion tool, document analysis and a literature review. The case study, SAS, is an international commercial airline and one of the founding members of the Star AllianceTM network. SAS operates predominantly at the Scandinavian and European Union level, a domain that has given much attention to environmental issues. This study uses two key decisions that v were made in SAS to demonstrate how environmental issues were taken into consideration in the airline’s decision-making process. The first decision focuses on a strategic move by the airline in 1995 to purchase ‘environmentally-friendly’ aircraft engines, and the second decision deals with a new inflight service concept, Scandinavian Direct, that was created by SAS following the economic downturn in the industry in 2001. Based on an in-depth analysis of the drivers identified by both Scandinavian Airlines and related industry officials, this study shows that attitudes, values and beliefs generated both internally and externally have a critical impact on the airline’s environmental policy-making. Although there are numerous influences that drive SAS’s level of environmental commitment, three of these ‘motivators’ are particularly noteworthy in the findings. Firstly, this research demonstrates that eco-efficiencies, in various forms, are indeed a strong motive at SAS. Secondly, the Scandinavian culture also plays an influential role in the value SAS puts on the environment at a strategic level. Thirdly, it was found that internal leadership, in the form of environmental champions in senior management positions, played a key role in the positive outcomes of the airline’s environmental performance. The implications of this study are three-fold. Firstly, the study provides empirical evidence of the motivations and influences for an individual company at a level of depth provided in few case studies. Secondly, it provides findings that can be used in the development of mechanisms to encourage airlines to continually improve their environmental performance. Thirdly, the significance of this research is founded on the notion that it is crucial to understand the external and internal drivers that influence the development of airline environmental policy if realistic and appropriate benchmarks are to be set for different sectors of the tourism industry. Given the historic and forecasted growth in air travel, the salience of this research is demonstrated. vi Table of Contents Chapter One: Balancing the environment at 10,000 metres 1 1.1 Introduction……………………………………………………………. 1 1.2 An overview of corporate response to environmental concerns… 2 1.3 Defining the concept of ‘corporate greening’ and ‘environmental commitment’……………...…………………………………………….. 5 1.4 The objectives of this thesis……………………..…………………… 8 1.5 Research approach: SAS as a case study with the larger 9 framework of the airline industry……………………………………... 1.5.1 The short story of SAS……….….…………………………….. 10 1.5.2 Overcoming industry turbulence: adjustments in the 12 research approach…..………………………………………….. 1.6 Outline of the Thesis…………………………..……………………… 13 Chapter Two: Corporations with a conscience? Motivations and 17 influences on corporate greening and environmental commitment: a review of the literature 2.1 Introduction…………………………………...…………………………. 17 2.2 Corporations and the environment..……………………………...…... 18 2.3 Mechanisms for encouraging corporate greening…..…………….... 22 2.4 Motivations and drivers for corporate environmental commitment... 26 2.5 Non-drivers and negative influences……………………..………….. 36 2.6 Environmental champions as engines of change………………..…. 38 2.6.1 The role of management in a firm’s level of environmental 40 commitment…………………………………… ………………. 2.7 Systems of influence of corporate environmental commitment……. 42 44 2.8 Conclusions………………………………………………………… … vii Chapter Three: A literature review of the environmental 47 management of aviation 3.1 Introduction……………….…………………………………………… 47 3.2 The airline industry’s greatest environmental challenge: growth.. 48 3.3 Current market trends in the airline industry: from free skies to no 50 frills.…….…………………………………………………………….… 3.3.1 Deregulation and liberalisation of the skies…………..…..…. 50 3.3.2 Aviation as a medium for tourism…….………………………. 50 3.3.3 Low cost airlines………………………………………………... 51 3.3.4 Changing demands of passenger and industry needs……… 52 3.4 Science and technology: the environmental impacts of air travel... 53 3.4.1 Noise and air emissions……………………………………..… 55 3.4.2 Congestion of airspace and airports……………..…………... 56 3.4.3 Solid and hazardous waste…………………………………… 57 3.5 Political system: the regulatory structure of the airline industry…. 57 3.5.1 The international regulatory structure of the airline industry. 58 3.5.2 The strategic environmental pillars of the European 64 Union……………………………………………………………………. 3.5.3 The regulatory structure of the airline industry at the 65 national level…………………………………………………………… 3.6 Market-based mechanisms..…………………………………………. 67 3.6.1 Non-voluntary mechanisms……………………………………. 67 3.6.2 Voluntary initiatives……………………………………………... 68 3.7 Social systems…………………………………………………………. 76 3.8 Discussion……………………………………………………………… 80 3.9 Conclusion……………………………………………………………… 82 Chapter Four: Getting the goods out of industry: the research 85 approach 4.1 Introduction……………………………………………………………... 85 viii 4.2 Using a case study approach………………………………………… 85 4.3 Paradigms and values………………………………………………… 89 4.4 Interviews and interviewing…………………………………………… 90 4.4.1 Interview approach and content……………………………….. 94 4.4.2 Identifying and contacting interviewees………………………. 95 4.4.3 Role of the interviewer…………………………………………. 97 4.4.4 Interviewing and culture………………………………………… 99 4.5 Discussion tool…………………………………………………………. 100 4.5.1 Development of the interactive discussion tool……………… 102 4.5.2 Integrating the interactive discussion tool into the 103 interview………………………………………………………………… 4.6 Discussion of analysis………………………………………………… 107 4.7 Opportunities and constraints………………………………………… 108 4.8 Conclusion.………………………………………………………… 110 Chapter Five: Seeing ‘green’ the Scandinavian way: examining what 111 influences SAS’s environmental commitment (Analysis I) 5.1 Introduction…………………………………………………………….. 111 5.2 The evolution of corporate greening at SAS……………………….. 112 5.3 The meaning of greening for SAS: environmental strategies and 116 policies……….…………………………………………………………. 5.3.1 The internal corporate structure of environmental affairs at 117 SAS………………………………………………………………. 5.4 Environmental