Southwest CEO says cap-and-trade unnecessary

By Gary Kelly

The problem of greenhouse gas (GHG) emissions and the resulting climate change is one that faces all of us—as individuals, but also as corporations. The backbone of the aviation industry is helping individuals go, see and do in a time-effective manner. If we don’t address the problem of GHG emissions, there will not be natural places to go, a world to see or things to do. We, as an industry, are highly motivated to preserve the natural world around us.

Southwest Airlines and the entire airline industry have a great story to tell about improving fuel efficiency and reducing GHG emissions. Compared to other industries, and even other modes of transportation, the airline industry is incredibly fuel-efficient and continues to improve efficiency with investments in new technology and by adopting new operational procedures.

We are driven to be as fuel efficient as possible because, not only is it the right thing to do, frankly, it’s good business. Fuel accounts for an incredibly large portion of any airline’s operating costs. And thus, we have every reason in the world to be as fuel (and carbon) efficient as possible. We are constantly searching for ways to reduce our fuel costs. When we reduce our fuel consumption, we help both the environment and our bottom line. Any government solution to climate change should leverage this economic reality.

According to a recent study, “Commercial Aviation and the American Economy,” the airline industry, which includes both passenger and cargo carriers, is a major driver of economic activity, especially in the United States, where the airline industry is directly responsible for 5.8 percent of gross economic output and 8.8 percent of national employment. Despite our role in being a major generator of economic activity, airlines account for only about 2 percent of GHG emissions in the United States and 3 percent worldwide. Again, the airline industry delivers more value to the economy while maintaining a low carbon footprint because we are constantly improving our fuel efficiency.

The industry has already contributed to the reduction of emissions through technology and efficiency. The industry has improved its fuel efficiency—and hence GHG efficiency—by 103 percent between 1978 and 2006.

The FAA has found that the U.S. airline industry reduced its fuel consumption by roughly 5 percent from 2000 through 2006, resulting in an absolute reduction in GHG emissions. Compare that to the fact that the airline industry carried 12 percent more passengers and 22 percent more cargo during that same period. And the major U.S. airlines, through our trade association, the Air Transport Association, recently committed to an additional 30 percent fuel efficiency between 2005 and 2025. Few, if any, other industries can match our achievements and forward-looking commitment.

It cannot be overemphasized that our own investments in new technologies and more fuel-efficient aircraft operating procedures have been the predominant and indispensable ingredient in our success.

Examples of the many capital-intensive programs we have undertaken to improve our fuel efficiency include constantly upgrading our planes and engines, acquiring new fuel-saving winglets, and advanced avionics that enable us to make more efficient routings. Future efficiency gains, though, depend on our ability to continue investing in new equipment and technologies and a modern, up-to-date air traffic control system.

Over the last decade, Southwest Airlines has invested millions of dollars in fuel-saving initiatives, including winglets, gate services and electrification of ground services equipment. Southwest is focused on the environmental quality of its operations because it is the right thing to do, both economically and morally. Southwest is the first airline to commit to spending millions of dollars to outfit its fleet with Required Navigational Performance (RNP) technology, which is a superior approach to current aircraft navigation. It is more predictable and environmentally sustainable. It optimizes approaches and departures by integrating cutting-edge avionics with Global Positioning System (GPS) technology.

RNP-enabled aircraft precisely fly predetermined paths loaded into their flight- management computers. Continual monitoring—a key advancement of RNP—alerts users if their position becomes uncertain and to what degree. Procedures can be designed with paths that reduce flight distances and lower thrust settings, resulting in millions of dollars in fuel savings, noise and emissions reductions, and flight safety enhancements.

At Southwest Airlines, we recognize that stewardship of the environment is an essential aspect of our business. For more than 36 years we have led the industry in efficiency and productivity, and we are committed to continually raising the bar on the environmental quality of our operations.

Protecting the environment is the responsibility of every Southwest employee, and our people are the key to our success. A “Green Team” of employees leads our efforts in sustaining our environment for generations to come. The mission of the Green Team is to identify efforts under way, target areas of improvement in all aspects of Southwest business and search for ways to bring environmental stewardship to the forefront of business decisions, while remaining true to our low-cost philosophy.

Additionally, through a comprehensive environmental management program; company-wide environmental training and awareness activities; pollution prevention, resource conservation and waste minimization procedures; and environmental policies established and administered by our Safety and Environmental Services Group, all employees are charged with responsibility for compliance with applicable environmental regulations in every facet of Southwest’s operations.

Even with this great track record, Southwest Airlines, as well as other airlines, acknowledge the need to take additional steps to reduce GHG emissions from our aircraft operations. We believe, however, that the imposition of a market-oriented “cap-and-trade system,” in which allowances to emit GHG would be bought and sold is not a solution-oriented approach.

The various cap-and-trade proposals are not only unnecessary because the aviation industry is already highly motivated to solve the problem of emissions due to the high cost of fuel, but they could actually be counterproductive. As they relate to aviation, these schemes will do little to solve anything; they merely tax and penalize and place undo economic hardship on an already strapped industry, thus further inhibiting the investments already taking place.

Ultimately, development of alternative energy sources, cleaner production and use of current energy sources, cleaner burning engines, lighter aircraft and more direct and precise flight routing are the solutions. The best way for this to happen is through voluntary efforts by companies and industry groups, with the support of the federal government. For starters, this federal support should include further investment in research and development.

In the interim, there must be a focus on efficiency. Reducing fuel consumption is a focus, not just because of the current cost of fuel, but because reducing fuel burn also reduces emissions. Efficiency is the elimination of waste, and pollution results from waste.

The most critical part of the solution is to decrease and eliminate congestion and delays. The Next Generation Air Transportation System (NextGen ATC) would modernize the outdated ATC system and allow more direct routes. Studies show this could further reduce GHG emissions by 10 to 15 percent. Unfortunately, the current Congress failed to enact legislation reauthorizing the Airport and Airway Trust Fund, which would have paved the way for a new ATC system. This program would bring tangible GHG savings while solving much of the congestion and delay problem.

Southwest supports investments in alternative fuels and new engine and airframe technologies, and supports the NextGen ATC system. Southwest supports a solution-based approach to GHG emissions, which means efficient operations.

The airline also supports a focus on efficient flight paths and an FAA commitment to expediting RNP capabilities, as well as voluntary emissions reductions as agreed to through the industry proposal of 30 percent improvement in efficiency between 2005 and 2025.

We acknowledge the need to take additional steps to address the emission of GHG from our aircraft operations. Accordingly, we commit to—and invite our industry partners and government to join us—in necessary programs, while keeping safety as our number one priority. Among these are continuing to support aeronautics research aimed at the development of engine, airframe and other technologies necessary to achieving revolutionary advances in environmental efficiency. We urge Congress to restore and enhance funding to NASA and the FAA for aeronautics environmental research and development.

Further, we commit to working even more closely with our industry partners, including engine and airframe manufacturers, in developing and deploying increasingly climate-efficient aircraft.

We will also work with fuel producers and jet engine manufacturers to step up efforts to develop more environmentally friendly and commercially viable alternatives to petroleum-based jet fuel, with appropriate support from the U.S. government. We are working with other stakeholders toward this end through the Commercial Aviation Alternative Fuels Initiative (CAAFI).

We will continue to support the efforts of the scientific community to close the gap on the significant uncertainties regarding the potential climate change effects of non-carbon aviation GHGs.

The challenge facing us in the area of climate change must be addressed across multiple channels, industries, and areas. It is important that the federal government support private industry by funding important research and development programs. We must focus on solutions to preserve the world we see.

Gary Kelly is CEO of Southwest Airlines and Vice Chairman of its board of directors.