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RESPONSIBLE
INVESTORS AIRLINES IN ASIA
MAY 2010
Richard Welford Author
Researchers:
Richard Welford
Helen Roeth
Sharan Bal
EXECUTIVE SUMMARY
This report provides an overview of environmental, social and governance (ESG)
issues surrounding the airline industry in Asia. The issues that we highlight are
those we view as the most material to companies and which pose the biggest
threats to the operations of the companies, their brands, reputation and profitability.
Responsible airlines will be monitoring, measuring and reporting on the impacts
and risks that these issues pose to themselves and their investors.
The issues identified in this report are discussed in parallel with an analysis of the
disclosure by the airlines on ESG related issues. We undertake a scoring analysis
and ranking of the region’s 24 listed companies in the sector on the basis of their
Responsible Research is an independent provider of sectoral and thematic Asian environment, social Sustainability and CSR reports and other disclosure.
and governance (ESG) research, targeted at global institutional investors. Many of these fund managers
and asset owners now find that traditional investment banking reports, financial models and public
Recent trends such as the growth of low cost airlines and the potential environmental
information sources can no longer be relied on to cover all risks to earnings and deliver superior
challenges associated with this development are discussed. Key regulations,
returns. Companies who do not monitor and report on this ‘non-financial’ performance not only risk legislation and incentives in the region are identified and analysed in terms of how
financial penalties for non-compliance with stricter regulatory environments but are also denied access they affect the operation and business of the airline industry.
to substantial pools of global capital which are managed according to sustainable principles.
The company scoring reveals that many airlines in the region have systems in place to
Our approach is based on analysis of material ESG factors, which change according to sector and
deal with business issues related to the environment, labour, corporate governance
market. We provide our clients with local market knowledge of important regulatory landscapes in and economic performance. Disclosure on social issues, human rights and product
Asia, along with a fresh perspective on local operational and sectoral issues. We offer an annual responsibility tends to be weak, as does reporting on key sector specific issues not
subscription model for our monthly sectoral or thematic reports and give our clients access to the covered in reporting guidelines such as the Global Reporting Initiative. These key
underlying data. Reports can also be commissioned (by investors or foundations) and kept for internal issues include the European Emissions Trading Scheme, biofuels, decommissioning
use or be offered for general distribution, as part of a general effort to promote ESG integration into of planes, landing techniques, land use (e.g. at airports), discrimination due to age,
the Asian investment process. Our analysts conduct seminars and webinars to discuss findings, often gender, physical appearance, and fair operating practices.
with contributions from experts, companies and policy-makers.
Cathay Pacific emerges as the leading company in the region when it comes to
Responsible Research was founded in 2008 by our Board who have been instrumental in promoting disclosure on ESG issues. The company demonstrates impressive reporting and
Corporate Social Responsibility (CSR) and SRI practices in Asia for over 10 years and have significant communications strategies in the majority of indicator areas covered in this
experience in the region’s emerging investment markets. This team of five works in collaboration with analysis. Korean Air and Asiana Airlines (also Korean) come in second and third
our full time Asian-based responsible investment analysts and the Responsible Research Alliance, a place respectively.
group of consultants with subject matter expertise. Together they provide a valuable balance of market
and ESG knowledge, academic rigour, process management, data management, customer relationship The aviation industry in Asia is undergoing fundamental changes driven by market
management and senior level contacts. liberalisation, changing business models and stronger competition by low cost
carriers, and in some parts of the region slowly diminishing political intervention
Many of our clients are signatories to the UN backed Principles of Responsible Investment (PRI), an into the management of national or quasi state owned airlines. Airlines are also
investor initiative. As signatories they commit to incorporate ESG issues into their investment analysis going to be significantly impacted by climate change and other environmental risks.
and to support the development of ESG tools, metrics and methodologies. As a signatory to the PRI There is a need for them to engage on these issues if they are to maintain the trust
we voluntarily contribute time and resources to the Emerging Markets Disclosure Project and other of stakeholders and avoid more damaging regulations.
collaborative initiatives. Responsible Research is also a strong supporter of independence in research,
without which conflict and bias can deliver investment risk. The company is one of the founding Employment practices are highly variable across airlines in the region. Accusations
members of the Asian Association of Independent Research Providers and also of the Asian Water of gender bias and recruitment of staff on the basis of personal characteristics
Project. rather than ability to do the job abound. Recruitment and retention in a marketplace
where a new ‘battle for talent’ is emerging and where, in some places, birth rates
are decreasing is going to be a key determinant of profitability.
About the Author Safety and security remains a huge issue for the industry. Ensuring the safety of
passengers and their well-being during flight is an area of concern. There are also
Richard Welford is a Director of major concerns relating to the way that companies are governed and the extent to
Responsible Research. He has which companies operate in a truly competitive environment.
spent six years working with
the airline sector in Asia and Disclosure on the economic impacts of aviation and on the governance of companies
has acted as a sustainability is relatively strong in the region. Most companies provide significant information on
consultant to Cathay Pacific and their economic contributions and their governance structures. Labour issues and
China Southern Airlines, both environmental indicators are less well disclosed even though this report highlights
mentioned in this report. He is that these areas are very much linked to some of the key risks for companies and
also Chairman of CSR Asia and a their investors in this industry.
Director of ERP Environment.
For more information, please contact Responsible Research: Investors will already acknowledge that the airline industry is challenged by
relatively low profitability and is highly susceptible to economic disturbances. But
Email: info@responsibleresearch.com
Tel: +65 9386 6664
there is now a growing recognition that the brands and reputations associated with
many of the players in the region are likely to be inextricably linked to many of the
www.responsibleresearch.com issues highlighted in this report. Those that are transparent and can respond to the
issues via their differing disclosure vehicles are set to gain a competitive advantage
through their non-financial performance.
5 INTRODUCTION
Airline sustainability analysis
Company Performance
Key developments in the region
15 ENVIRONMENTAL ISSUES
Climate change and carbon emissions
Biofuels
Air quality
Noise
Aircraft recycling
25 SOCIAL ISSUES
Customer satisfaction
Employment issues
Diversity, gender discrimination and the perpetuation of stereotypes
Supply chains
Trafficking and combating child sex tourism
Engagement with the social media
Safety
Security
35 GOVERNANCE ISSUES
Competition policy
Consumer issues and fair marketing
ISSUES FOR
Remuneration of Boards
Political involvement and government relations
Bribery and corruption
RESPONSIBLE
INVESTORS INTRODUCTION
41 CONCLUSION
49 REFERENCES
Airline sustainability
Introduction analysis
The outlook for the airline industry after the global recession is positive: global Scoring methodology
air travel demand is expected to double over the next 15 years, led by faster In this report 24 listed airlines in the region are analysed against a total of 104 ESG
growth in the Asia Pacific region, which is set to become the world’s largest indicators covering corporate governance, environmental, human rights, labour,
aviation market.1 The air transport sector in Asia Pacific supports more than social, product responsibility, and economic issues. The complete list of airlines
three million jobs and contributes US$ 170 billion to GDP. Over the next two under analysis is provided in Table 1 below.
decades, it is projected, that these figures will rise to almost 20 million jobs,
contributing more than USD 1 trillion to GDP.2 Indicators were drawn together from the Global Reporting Initiative’s (GRI)
reporting framework and supplemented with additional indicators of particular
The driving forces of much of this growth are a boom in low-cost travel and a relevance to the airline industry. An overview of all indicators can be found in
growing web of open-skies agreements which are expected to power long-term Appendix 1 and summary statistics can be found in Annex 2 and 3.
growth for Asian airlines.
Sector specific issues we considered in the benchmarking exercise included fleet
The growth potential in the region is immense, in particular in China and India modernisation, development of biofuel use, disclosure on climate change impacts,
whose populations are only served by 0.3 and 0.1 available seats per person per policies on dismantling planes, landing techniques, noise pollution abatement
year (as compared to three aircraft seats per year for each of the 300 million policies, supply chain code of conduct, participation in the European Emissions
people in the U.S.). If Asians start travelling as much as U.S. travellers the global Trading Scheme, off-setting options available to passengers and, importantly,
air transport industry is estimated to triple in size.3 route optimization and air traffic management systems.
Industry experts, however, caution that to reach its full potential the Asia
Pacific market needs to boost efforts in tackling key challenges related to the
environment, security, governance and market liberalisation.5 In China, the
domestic market is dominated by three state-controlled carriers and low-cost
carriers have yet to appear. In India, the situation is quite the opposite, with a
deregulated domestic aviation market where a large number of private carriers
fight over market share.6
Yet, consumers, investors and other stakeholders are increasingly aware of the
social and environmental impacts that airlines have. Whilst they can contribute
to growth and economic development, stakeholders question the discriminatory
hiring practices and implicit human rights abuses of some airlines. Others point
to the huge impacts that airlines can have on climate change and air pollution,
particularly with regards age of fleet and route optimisation. The debate is still
ongoing within the industry as to the environmental benefits of newer, larger
aircraft, such as the A380, as much depends on the sectors they are flown on
and load factors. Investors need to recognise that airlines are in the forefront of
debates over greenhouse gas emissions and are increasingly subject to tough
regulatory and market based measures adding to their costs. Whilst newer fleets
are generally going to lead to lower emissions of GHGs, the choice of plane and
the routes where it is used are also key determinants of climate change impact.
Airlines are themselves huge purchasers of goods and services and they need to
ensure that they demonstrate ethical supply chains.
With regards to their disclosure on the issues that we highlight, airlines can be Among the six listed airlines in China, only China Southern Airlines reports
grouped into four categories: comprehensively on CSR issues. However, as with most other scored airlines,
the company performs poorly with regard to disclosure on issues related to
1. The leaders: Airlines with sophisticated sustainability reporting that human rights, social responsibility, and product responsibility. It performs well
provide information on most of the indicators. In this regard, Cathay with regard to reporting on environmental, labour and corporate governance
Pacific and Korean Air are clear leaders in the region. Cathay Pacific, issues but lacks disclosure on sector-specific issues.
in particular, reports on indicators where most of the listed airlines
performed poorly, such as product responsibility and human rights. Listed airlines in mainland China (except for China Southern Airlines) and India
constitute the bottom of the scoring chart in all areas.
2. The followers: Airlines with comprehensive and clear disclosure on
a majority of the indicators, but who do not report to the extent Both of Korea’s Airlines perform well in the scoring being the two of the top three
of Cathay Pacific and Korean Air. Among these are Asiana Airlines, leading airlines in the region when it comes to CSR reporting. Interestingly,
Qantas, China Southern Airlines, Malaysia Airlines, Thai Airways, Asiana Airlines falls far behind in terms of corporate governance disclosure.
and Singapore Airlines.
Arch-rivals and premium airlines Cathay Pacific and Singapore Airlines are a long
3. The timid: Airlines with reasonable reporting on issues they consider as way apart in our assessment of ESG indicators. Singapore Airlines fails to grasp
most relevant to their business operations but which lack disclosure on the importance of disclosure on ESG issues and has certainly not responded to
more challenging issues outlined in this report. These airlines include Air the challenge of sustainable development in the way that Cathay Pacific has.
New Zealand, All Nippon Airways, Japan Airlines, Philippine Airlines, There is now a clear gap between Cathay Pacific and Singapore Airlines – a gap
Air China, China Airlines, China Eastern, Jet Airways, Hainan Airlines, that we argue provides Cathay Pacific with a significant competitive advantage
and Eva Airways. Virgin Blue and AirAsia, both LCCs appear in this sector. over its rival.
4. The laggards: Airlines with an overall poor ESG reporting and Even more surprisingly, however, is the fact that Singapore Airlines also lags
disclosure performance include Shandong and Shanghai Airlines, behind neighbours at Malaysia Airlines and Thai Airways. Although Singapore
Kingfisher Airlines and Tiger Airways (also an LCC). Airlines demonstrates some strength in engaging with environmental issues, its
very poor scores on social issues detract significantly from its overall performance.
Interestingly, most airlines performed better with regard to reporting on GRI
indicators compared to disclosure on the additional sector specific issues that In the overall scoring the two LCCs Virgin Blue and Air Asia are among the
we included in the scoring related to environment, labour, social and economic average performers while LCC Tiger Airways is among the laggards. Virgin Blue
issues for airlines. It seems that the majority of listed airlines in the region are and Air Asia perform particularly poorly in their disclosure on aspects of social
focussing their CSR reporting, and by extension their sustainability strategy, on responsibility. Air Asia receives high scores for it’s reporting on labour issues and
general issues while omitting GRI indicators not deemed relevant to the industry. Virgin Blue scores high on governance issues.
They are also not reporting on some key industry ESG risk issues not included
in the GRI guidelines. Key issues for the industry not covered by GRI and rarely
reported on by listed companies include:
Industry and company performance by indicator area
- The impact of the European Union Emissions Trading Scheme
Annex 2 and 3 provide summaries of overall scores and scores by indicator
- Biofuels: their impact and use area. Our analysis is deliberately biased towards environmental indicators,
reflecting the environmental bias in the GRI approach. We have added a number
- Dismantling planes at end of life of additional indicators because most of the ESG issues likely to deliver financial
risk to the industry are environmental in nature.
- Landing techniques to reduce environmental impacts
With an overall score of only 18% we can see that most companies in the region
- Land use need to disclose more on their environmental impacts. Korean Air (51%) scores
highest on environmental issues followed by Cathay Pacific (48%) and Asiana
- Supply chain codes of conduct and supplier assessments Airlines (45%). It is notable that Singapore Airlines (39%) comes fourth in this
indicator area, although only eighth overall. This reflects, again, the bias in
- Discrimination due to age and physical appearance reporting towards environmental issues and away from broader social issues.
- Community investment strategies (particularly in developing countries) It is of no surprise that reporting on human rights issues is generally poor across
the industry. There is a clear reluctance to engage with human rights issues in
- Fair operating practices Asia as a whole. Cathay Pacific is a clear leader with a score of 39% followed by
Korean Air (28%). But the majority of companies analysed were not awarded a
single point in this indicator area. The average score across all companies was a
miserable 4%.
The area of product responsibility is one where many in the industry might not
initially see as central since airlines are essentially service providers. Nevertheless,
the indicators do include important aspects such as consumer satisfaction (a
key determinant of profitability), complaints handling and life cycle analysis of
equipment (such as the aircraft, for example). Cathay Pacific, with an impressive
score of 56%, is a clear leader in this area.
Airlines are relatively good at disclosing economic information and this perhaps
reflects their history (in most, but not all cases) of having the government as
controlling shareholders, as well as a desire to justify attractive tariff and fiscal
status as a result of their important role in economic development, trade and
employment generation. The overall score in this indicator area is relatively high
at 26%. The leading position is tied between Cathay Pacific and Korean Air, both
scoring 63%. They are followed by Malaysia Airlines at 50%.
The emergence of low cost airlines and the new business model is having a
tremendous impact on the tourism and travel industry in Asia as well as on
travellers’ behaviour. New travel destinations have emerged, airport passenger
traffic has increased, more people now travel more often, while others that could
never previously travel can afford a long distance holiday. This is creating critical
implications in the tourism industry and has a potentially huge impact on the
environment.
While some declare that “cut-price air travel is costing the Earth” due to increased
traffic (on the ground around airports and in the air) and increased emissions21
others argue that budget flights have a comparatively lower carbon footprint per
passenger. Budget airlines, it is argued, fit more seats into their planes, have a
higher occupancy rate, operate newer, more fuel-efficient airplanes, providing
low-frill services with less waste and operate from less congested secondary
airports thus driving costs and the carbon footprint down.22 While there has been
no consensus agreement on quantifying the reduced environmental impact of
LCCs, a few budget airlines are taking a pro-active approach and have started
reporting on their environmental performance.
The existence of LCCs is likely to continue to put pressure on the economy class
of the mainstream airlines. We expect the fastest growth, however, to be on new
routes between many of the ‘second-tier’ cities in Asia.
A few airlines have already tested biofuels, among them Qantas, Air New Zealand In recognition of growing pressures due to local air quality and climate effects,
coupled with the predicted continued growth in air traffic, aviation stakeholders
and Japan Airlines.43 Virgin boss, Richard Branson, has pledged to commit all
have set out their goals and vision for the future of aircraft emissions in the
profits from his travel firms, such as airline Virgin Atlantic and Virgin Trains, over
medium and long term. NOx, unburned hydrocarbons, carbon monoxide and
the next 10 years for investment in new renewable energy technologies.44 While smoke are subject to international standards set by ICAO who regularly tighten
biofuel test flights have shown promising results the economics are complex, and engine emission standards for each new generation of aircraft. The organisation
a number of commercial challenges will need to be overcome before biofuels can also promotes the use of operational measures as a means of limiting or reducing
be truly competitive with conventional jetfuel.45 the impact of aircraft engine emissions and has published guidance material.52
Target efficiency gains will also lead to a further reduction in pollutants such as
NOx and carbon monoxide.
CASE STUDY: Japan Airlines Camelina Biofuel Flight, January 2009
Airports have a significant part to play in cleaning up the industry. It is considered
Camelina sativa: a plant which needs little water or nitrogen essential to effectively manage emissions from: terminals, maintenance and
to flourish and that can be grown on marginal agricultural heating facilities; airport ground service equipments (GSE); and various ground
lands thus not competing with food crops. It may be used transport travelling around, to and from airports.53 In Europe, older aircraft with
as a rotation crop for wheat, to increase the health of the high NOx ratings are being charged higher landing fees than cleaner aircraft.54 In
soil.46 addition, some airports are working with the aircraft and engine manufacturers
to deliver reductions in emissions and noise impacts on local communities.
Japan Airlines became the fourth airline to test biofuels in
flight and the first to successfully demonstrate camelina as Another emerging issue relates to onboard air quality and air circulation. This
a potential biofuel feedstock. The airline conducted a one- issue has received much attention in the UK after aircrew who suffered from
hour 747-300 flight test using a B50 blend of camelina, aerotoxic syndrome have made their cases and concerns public.55 Symptoms
jatropha and algae based biofuel in the number 3 engine. apparently include fatigue, blurred vision, vertigo, seizures, headaches and
Pilots reported that the biofuel was more fuel efficient than dizziness. On most aircraft warm, compressed air is delivered to passengers
traditional jet-A fuel (kerosene) and indicated that biofuels from ‘bleed air’ delivered from the engines mixed 50/50 with re-circulated
may not only be a carbon-neutral option, but a more fuel cabin air. Various engine lubricants may end up as organophosphate ‘fumes’ in
efficient one. Pratt & Whitney, whose engines were used the cabin air that are thought to affect the health of frequent passengers. The
in the test, confirmed that the biofuel met performance Boeing 787 Dreamliner seems to be the aircraft industry’s answer to this issue as
criteria established for commercial aviation jet fuel. Boeing electrical compressors supply cabin air, thus reducing the risk of contamination
Japan said that the company is hopeful of flying revenue from engine oil. Responsible airlines could also install fume detectors and use a
passenger flights within 3-5 years using biofuels.47 low fume engine lubricant, such as that produced by the French company NYCO.
This company does not use the organophosphate anti-wear additive, Tri-cresyl-
phosphate, (TCP) that is present at 2-3% in most other engine oils. Tests are
still being undertaken to see if their type of engine lubricant really does result in
reduced neurotoxicity.56
A few airlines in the region, including Cathay Pacific and Singapore Airlines have
started investing in quieter aircraft that meet the latest noise standards. Airlines
failing to make necessary investments in new generation aircraft face substantial
financial risks with airports such as in New York, London, Frankfurt, Amsterdam
and Brussels having stringent airport noise requirements in place and which
regularly fine airlines for noise standard infringements. There is a powerful
incentive to continue tackling this issue, as concerns over noise pollution can -
and do - affect the viability of airport expansion plans.
Source: http://www.mongabay.com/images/commodities/charts/aluminium.html
It is estimated that over 95% of a plane can be recycled, whether that be for ISSUES FOR
spare parts or, indeed, melted down for other uses. In fact, manufacturers of
aircraft such as Airbus and Boeing are now designing aircraft not just with a safe
and long life in mind, but how compatible they will be to recycling once they have
RESPONSIBLE
INVESTORS SOCIAL ISSUES
reached the end of their useful service life (normally 20-30 years).61
The Aircraft Fleet Recycling Association has developed a set of standards for the
dismantling and recycling of aircraft. The Association seeks to instigate good
practice and drive up environmental standards through its audit and accreditation
process.62 This has allowed more companies, such as aircraft manufacturer
Bombardier, to move into the aircraft recycling business, which was so far limited
to specialist companies.63
To date, two Asian airlines are reporting on aircraft recycling. The lack of
reporting on this issue indicates that aircraft scrapping has not become common
practice yet. This is surprising as it provides added revenue and contributes to
a company’s image as a responsible aircraft operator. Those that are reporting,
are doing so in a minimal way, without evidence of the progress of their efforts
or the benefits to the business and the environment. All Nippon Airways (ANA)
includes recycling of aircraft engine parts and aluminium scraps from repairs
into metal materials as part of their recycling initiatives. Asiana Airlines includes
a statement about promoting the recycling of resources including aircraft parts.
There has, however, been downward pressure on wages and other benefits in
the industry. We have also witnessed rapid growth of hourly paid workers rather
than salaried staff and recruitment by carriers located in high cost bases has
often been targeted towards hiring staff residing in lower cost countries. We see
a future where because of the growth of the industry and increasing alternative
employment opportunities, the hiring of well qualified, suitable staff is going
to be increasingly difficult. Good employment practices are going to be vital to
recruitment and retention of top talent. Those unable to hire and keep good staff
are likely to see a downturn in their profitability.
© Responsible Research 2010 | Issues for Responsible Investors | 26
Diversity, gender discrimination and the
perpetuation of stereotypes
Diversity, Discrimination
& Stereotypes Supply chains
Chinese Airline hostesses practice their deep curtsey72 We expect more airlines to establish codes of conduct for their suppliers and
carry out assessments to ensure that brands and reputation cannot be damaged
The industry is already a relatively diverse one with many airlines by accusations of supply chain labour abuses, complicity in human rights abuses,
wanting to recruit a wide range of nationalities in order to provide a health and safety violations and environmental degradation. Procurement
range of language skills to meet customer needs. Yet diversity often does departments should have in place policies and procedures for sourcing goods
not extend beyond national origin and crews are often also recruited and services in more ethical and sustainable ways. Airlines should demonstrate
on the basis of physical appearance and age. Yet recruitment from that they have responsible supply chain practices and that unfair exploitation of
a narrow segment of society runs the risk of companies not actually people or the environment is not a source of price competitiveness as we see in
recruiting the best staff and losing out on an important part of company other industries.
competitiveness.
Sustainable procurement and the use of products that have positive social and
Korean Airlines Discrimination on the basis of personal characteristics is not only a human rights environmental characteristics is an important part of supply chain related product
Advert 2008 – abuse but also extends to concerns over the smooth and efficient operations of any responsibility. Companies can do more to steer their purchasing decisions to
How low can company. Companies need to ensure that they are not engaging in any activity encourage more sustainable consumption by passengers. The use of recycled
you go? that might be seen as constituting a human rights abuse or being complicit in such materials, Fair Trade products and organic food are all important considerations
an abuse. for airlines wanting to differentiate themselves through their sustainable
development practices.
Air Asia puts out a fresh, modern image
Gender discrimination and the perpetuation of stereotypes is so high that it seems
common practice in the region’s aviation industry. Examples are various and
include:
The business case for having a diverse workforce is extremely strong and includes
the ability to recruit and retain the top talent. There is also significant evidence
to suggest that diversity leads to a more innovative and productive workforce as
well. We would expect responsible companies in this industry to end discriminatory
work practices and embrace diversity in all its forms in the future.
The airline industry is not associated with the ubiquitous ‘sweatshop’ issues in the
same way as we might find in outsourced manufacturing. Nevertheless, airlines
do buy enormous quantities of goods and services ranging from the aircraft, fuel,
uniforms for staff, food, toys and meal trays. Responsible companies will have in
place risk assessments to determine where supply chain issues might impact their
brands and reputation and should be guided by codes of conduct that stipulate
minimum standards for their suppliers.
The undoubted leader in this area of social responsibility is Cathay Pacific. The
airline has a sophisticated code of conduct to which all suppliers are bound. All
existing and potential suppliers must complete an innovative on-line assessment
tool. The company has carried out risk assessments to highlight particular concerns
and targets its assessments at those high-risk supply chains. It stresses the need
to work in partnership with its suppliers in addressing social responsibility issues.
Plans are in place to extend the coverage of supply chain issues to include more
environmental aspects in line with growing stakeholder concerns around this area.
© Responsible Research 2010 | Issues for Responsible Investors | 28
Trafficking & combating Engagement with the
child sex tourism social media
One issue that may often be linked to both supply chain and consumer issues Today Twitter, Facebook, Flickr, YouTube and blogs, offer largely unexplored
involves trafficking and sex tourism. The trafficking and exploitation of children new advertising and promotion platforms to promote products, target the online
for sexual purposes is heavily prevalent in Asia and in particular in: Sri Lanka, and younger community, and develop brand loyalty. Word of mouth advertising
the Philippines, Thailand, Taiwan, and Cambodia. Globally, it is a multibillion is the largest influencer in travel making decisions, and social media platforms
dollar industry that is said to affect as many as two million children. The extreme can greatly facilitate this.86
illegality and underground nature of the crime means statistics are less accurate.
Nevertheless, it has been estimated that children make up 40% of sex workers In Asia Pacific an increasing number of airlines are using social media to engage
in Thailand, and that in Cambodia about one third of all sex workers are under with different customer segments - Air New Zealand, Cathay Pacific, Jetstar,
the age of 18. The numbers are alarming, and probably understated, but indicate Philippine Airlines, Qantas, Thai Airways, Tiger Airways, and Virgin Blue all have
that a lack of coordinated regional efforts towards eradication have allowed the Twitter accounts. Taking the example of Tiger Airways, their twitter account
industry to continue and thrive.78 not only reminds followers of special deals and seasonal sales, but also asks
for opinions, on various topics, such as, “celebrity endorsements for LCCs” and
The airline industry is inextricably involved in the facilitation of this problem, “desirable destinations.” These are examples of how these airlines are using the
as a channel that offenders use to gain access to children from all over the accounts to simplify the customer feedback mechanism, modify their product
world. At the same time as part of the tourism industry it is also well placed and service offering and to retain customer loyalty.
to help protect children. The Human Trafficking Organization implicates the
airlines by suggesting that some are lax in scrutinising passengers, a situation YouTube is another social media phenomenon, which taps into the youth market
which can contribute to the problem as traffickers then select these airlines to much more effectively than TV advertising. Air New Zealand has benefited greatly
smuggle children. It is important for airlines to take a stance in acknowledging from their YouTube advertising campaign of July 2009, which cleverly highlighted
this problem, and they can help by raising awareness and potential deterrence.79 their commitment to transparency regarding the airline’s all-inclusive domestic
fares and received nearly 10 million hits.87
Despite the prevalence of this crime in Asia, most counter-trafficking efforts
have been first introduced in Europe. In February 2010, the Indian chapter of the Blogging is an avenue that some airlines are pursuing to capture target markets.
Pacific Asia Travel Association (PATA) has implemented guidelines for the Indian Malaysia Airlines stands out in this regard for its employee created blog. This
tourism industry which require airlines to include information about the illegality multi-lingual blog is accessible by the public. Titled “Living Malaysian Hospitality”
of child abuse in their promotional brochures and other publicity materials. Airline and powered by employees, posted categories include “so said the customer”
employees will be trained to monitor paedophiles and will block the accessing of and “giving back to the community.” The customer feedback section allows
Internet pornography on their premises.80 passengers to submit praise as well as complaints and to receive prompt response
from the airline’s employees. The community section describes the volunteer
“End Child Prostitution, Child Pornography and Trafficking of Children for activities of Malaysia Airlines staff - in a much more personalised and detailed
Sexual Purposes” (ECPAT) is an international organisation aimed to end child way than CSR Reports are able to.88
prostitution, child pornography and trafficking of children for sexual purposes and
has developed an initiative which aims to engage the private sector. The Code It is becoming increasingly important for airlines to keep track of the social
of Conduct for the Protection of Children from Sexual Exploitation in Travel and media and utilise these avenues to engage with their stakeholders. Social media
Tourism81 is funded by UNICEF and supported by the World Trade Organization. provides passengers with a more immediate and broad audience to express their
The only scored company to sign the code is Japan Airlines, with three of its frustrations and airlines need to be able to manage this negativity.
tourism specific subsidiaries as signatories.82
However, there are downsides to such social networking, considering the public
ECPAT, in conjunction with Air France, has developed an awareness building nature and significant online presence of these formats. Virgin Atlantic and British
in-flight video for airlines.83 None of the listed Asian airlines have shown this to Airways have both faced problems in the past with flight attendants posting
passengers to our knowledge. Air France allocates a portion of in-flight toy sales negative comments about passengers on Facebook. This highlights a need for
to fund its Child Sex Tourism awareness programs. KLM does not run the video internal awareness and communication on the management of social media.
but it made a statement concerning child sex tourism to travellers, encouraging Singapore Airlines has released guidelines on employee blogging and internet
usage. Employees are forbidden to write about work or provide any pictures in
them to report any suspicious behaviour.84
the public social media sphere.89
As an example of best practice within the region, Qantas has demonstrated
its support with the Australian Federal Police’s commitment to combating the There is little doubt that the power of the social media has the power to enhance
crime of child trafficking by displaying full page advertisements in their in-flight brands. But there is also a significant threat to the reputations of companies
embroiled in online attacks from customers, employees and others. There is a
magazines to raise awareness.85
need for an industry, which is very much the attention of many stakeholders,
to engage with the social media and monitor and manage online content. We
expect more engagement with a range of stakeholders through the social media
in the future.
All Nippon Airways reports comprehensively on its Safety Management System The European Union banned all
which covers the following key aspects: ANA Group safety principles, safety Indonesian-registered aircraft from
management regulations, risk management, reporting programme, education flying over its airspace in June 2007,
and training, internal safety auditing programme and external audits. The airline acting on a report from the International
seeks to continually make safety improvements via the four stages of the cycle— Civil Aviation Organisation (ICAO) which
Plan, Do, Check and Act.95 criticised the country’s safety standards.
The EU ban followed a number of air
Food safety is a particular area on which an increasing number of airlines are crashes, including an Adam Air jet fell
reporting, including Cathay Pacific, Korean Air and All Nippon Airways. This seems into the sea off Sulawesi on January 1,
to be driven by the motivation to increase customer service and to respond to 2007, killing all 102 on board. A Garuda
the increasing number of health-conscious passengers. jet crashed in Yogyakarta in March the
same year, with 21 dead. Garuda was
Safety issues remain one of the most material taken off the EU banned list in July
risks for airlines and, therefore, a major 2009.96
concern for investors. One major accident or
incident that can be linked to negligence on the
part of an airline can cause shareholder value
to be destroyed as possible litigation costs
rise. In the eyes of many customers there are
still some doubts around the safety of LCCs
where older aircraft, serviced less frequently
and flown by less experienced pilots are in use.
Premium airlines are increasingly using safety
records as a source of competitive advantage.
Following the attempted terrorist attack in the United States on December 25,
2009, the U.S. Transportation Security Administration issued a new directive,
developed in consultation with law enforcement officials and domestic and
international partners, which mandates that every individual flying into the U.S.
from anywhere in the world who holds a passport issued by or is travelling from
or through nations that are state sponsors of terrorism or other countries ‘of
interest’ undergo enhanced screening.100
According to IATA, airlines in the region pay almost US$6 billion a year towards
security. It calls for improved government-industry cooperation on security in the
region and stresses that security should be mainly a government responsibility.
In 2005 AirAsia led the field when it introduced FlightVu Cockpit Door Surveillance
Systems (CDSS) for seven Boeing B737-300 aircraft, which enables the flight
crew to view the area outside the flight deck door and to visually identify anyone
requesting entry and take appropriate action should an incident arise.101 Many
other airlines have now followed suit ensuring that flight decks are not easily
accessible.
With the collection, analysis and exchange of passenger information, the use of
biometrics and passenger vetting playing a crucial role in improving security,
information security and the protection of passenger data are becoming key issues
for the industry. Airlines need to get appropriate systems in place to ensure that
the collection of personal data is limited to information that is either essential or
provided with the consent of the individual passenger. All Nippon Airways has ISSUES FOR
developed a system for raising employee awareness, and controlling and using
information properly by revising rules concerning overall information security
in 2008. This initiative followed a review of rules and guidelines concerning the
RESPONSIBLE
INVESTORS GOVERNANCE ISSUES
handling of personal information of customers.102
Out of all the ASEAN members, only Singapore has adopted an open-sky policy
for international routes. Others in the region have adopted bilateral or multilateral
air service agreements. Previously, ASEAN members had been conservative in
their treatment of domestic and intra-regional aviation policy despite being very
liberal in allowing freedoms with international routes and carriers. LCCs have
recently taken advantage of the liberalisation in intra-regional routes that was
rooted in passenger complaints over high prices for domestic routes and rising
demand of regional tourism. Indonesia has rejected appeals for liberalisation
and made moves to protect its many small private airlines by disallowing non-
Indonesian LCCs to land in any of its cities.
The Chinese aviation industry has been consolidated geopolitically around three
major airlines (Air China, China Eastern Airlines and China Southern Airlines)
with hubs in Beijing, Shanghai and Guangzhou. In the aftermath of the recession
in late 2008, the Chinese government instituted several measures to relieve
the pressure from these airlines, including restrictions on start up carriers.
Such interventionist measures are said to sustain inefficiency in a struggle
to resolve short-term survival and will most certainly not promote long-term
competitiveness.112
After the economic crisis it seems that in some parts of the region political
intervention in the airline industry is about to diminish. In 2006, for example,
Malaysia Airlines, published a “Business Turnaround Plan”, which made the
airline’s weaknesses public, looking even at a possible bankruptcy situation. With
a subsequent promise by the government not to intervene, various measures
to lower costs have been introduced, ascribed to a new generation of more
independent executives. These have included the cutting of unprofitable routes,
reduction in fleet, and increases in employee productivity and aircraft daily usage.
Compensating for a further reduction in its long-haul network (the closure of
New York and Stockholm routes), the airline is planning to expand to Australia,
China, South Asia, the Middle East and ASEAN countries.113
Among the listed companies in the region only Qantas and Malaysia Airlines
report on their contribution to political parties. Malaysia Airlines discloses its
involvement with Project PINTAR as a joint project with Government linked
companies to promote education within the underprivileged youth. The Chairman
also publicly thanks the government as a key stakeholder for its unwavering
support, specifically stating it would benefit from the government’s stimulus plan
which provided a 50% rebate on landing charges.114
© Responsible Research 2010 | Issues for Responsible Investors | 38
Bribery &
corruption Conclusions
According to Transparency International’s Global Corruption Report 2009 the The outlook for the airline industry as a whole is largely positive with an inevitable growth in
level of corruption in the private sector worldwide remains disturbingly high. the number of passengers flying in Asia. We expect to see further liberalisation of the market
Prominent corruption scandals and lack of transparency and accountability were coupled with a degree of industry consolidation. The growth of LCCs will be significant in
at the root of the financial crisis.115 markets serving second tier cities within the region. Yet, the airline industry is not a hugely
profitable one and continued tough competition coupled with rising costs associated with fuel
With the liberalisation of the aviation market in Asia there is a risk of an explosion and environmental costs means it is likely that profits will remain modest despite growth.
of corrupt practices. Corruption in the private sector has traditionally been severe
and it remains one of the most commonly found forms of poor governance in Our analysis of the 24 listed airlines in the region shows a great disparity between companies
places such as China, Vietnam, and Indonesia, amongst others. While there is recognising their responsibility towards ESG issues and those who seem to be blissfully unaware.
evidence of new legislation tackling private sector corruption throughout the We have demonstrated in this report that there are a growing number of risks associated with
region, from the establishment of new anti-corruption agencies to the provision many of these issues and that companies that cannot engage with them or fail to do so will
of whistleblower protection, there is still a lack of political will to fight corruption face both reputational and financial penalties. On the other hand we have pointed to the real
and the effective implementation of laws is still underdeveloped. In South-Korea, advantages associated with differentiation on social and environmental issues that can lead to
for example, the current government has introduced ‘business-friendly’ policies, a competitive advantage and increased profitability for some companies.
sometimes at the expense of anti-corruption initiatives.116
The leaders in the airlines industry have demonstrated that they can and do take ESG seriously.
When it comes to fighting corruption, a typical challenge in the region’s aviation Impressive scores by Cathay Pacific, Korean Air and Asiana Airlines provide a benchmark for
sector is the complex interrelationship of politics and the private sector with others to follow. But a number of companies remain timid and have a long way to go to catch
significant government participation in the aviation sector and considerable up on the ESG performance of the best companies in Asia.
business participation in politics. This means that corruption may take place with
impunity in some countries. Disclosure on the economic impacts of aviation and on the governance of companies is relatively
strong in the region. Most companies provide significant information on their economic
Thai Airways is under scrutiny from its customers and has been accused of contributions and their governance structures. Labour issues and environmental indicators are
corruption charges associated with its government involvement. In 2009, for less well disclosed even though this report highlights that these areas are very much linked to
example, the director of Thai Airways International’s Crew General Administration some of the key risks for companies and their investors in this industry.
Department filed a complaint with the National Anti-Corruption Commission
against a selection committee chaired by Finance Ministry permanent secretary Perhaps most importantly amongst the issues we have identified are the environmental risks
Suparut Kawatkul. This was in response to the committee naming appointees associated with climate change and air pollution. Although only responsible for 3% of global
for the position of Executive Vice President for Operations and Business greenhouse gas emissions, the sector has been identified by many regulators as an area of
Administration, which were found to be connected to some of the committee concern. There are undoubtedly going to be increasing costs associated with environmental
members, as a brother-in-law and classmates.117 damage caused by airlines. But in an increasingly sophisticated market customers and other
stakeholders are increasingly going to judge airlines on their environmental performance.
In Indonesia various fatal accidents raised concern that regulatory neglect, Profitability is also likely to be hit by the inevitability of rising fuel prices over the medium term
coupled with bribery, might have undermined passenger safety and led to as resources become more depleted and harder to extract. The growth of the airline industry
Indonesian airlines being banned from European Union airspace in July 2007. will also increase demand for fuel and other resources and inevitable price rises.
According to reports by testimonies, the institutionalisation of bribery related to
certificates (which included operating permits, pilot license extensions, increasing Social issues remain important as well. The airline industry makes considerable contributions to
pilot ratings and even airplane flightworthiness) discouraged investment in the GDP of many countries and employs, directly and indirectly, many thousands of people in
the region. Yet, there are a number of questions raised in this report about the basis on which
maintenance and training costs.118
staff are hired and possible discrimination and human rights abuses associated with some
Against the background of weak government initiatives and law enforcement, employment practices. We have also highlighted the impact that airlines have on secondary
we see private sector initiatives and collective action by companies as crucial in sectors through their purchasing policies and point to the need for supply chain codes of
raising corporate integrity and fighting corruption. Stock exchanges in the region conduct and sustainable procurement practices.
such as Shanghai and Malaysia are increasingly engaging listed companies in
The industry has always put an emphasis on safety and this has become an important part of
strengthening corporate integrity by developing mandatory corporate governance
the profile of airlines. Yet there are major concerns in some parts of the industry concerning the
standards.
degree of regulatory oversight in place and the potential for bribery and corruption to impacts
Our analysis shows that business initiatives on corruption are still low in the on safety and security.
region’s aviation sector with only four companies reporting on this issue, namely
This last point relates to the governance of many of the companies analysed in this report and
the leaders, Asiana Airlines, Cathay Pacific, Korean Air, and Quantas.
their relationships to governments when they are perceived to be a national carrier. Government
ownership, subsidies and political involvement distort competition in the sector.
Investors will already acknowledge that the airline industry is challenged by relatively low
profitability and is highly susceptible to economic disturbances. Yet it is an industry that
continues to grow, particularly in the Asia-Pacific region.
There is now a growing recognition that the brands and reputations associated with many of the
players in the region is likely to be inextricably linked to many of the issues highlighted in this
report. Those that are transparent and can respond to the issues via their differing disclosure
vehicles are set to gain a competitive advantage through their non-financial performance and
that will build loyalty and trust amongst customers and other stakeholders. Those continuing
to lag behind on issues of transparency and accountability will face huge potential risks and are
best avoided by responsible investors.
EN2 Percentage of recycled input materials used XEN 6 Climate change impacts
EN6 Energy efficiency initiatives or renewable energy sources XEN 10 Taking up land (e.g. airports)
EN7 Energy use reduction initiatives XEN 11 Supply chain code of conduct
Operations identified in which the right to exercise freedom of association and collective bargaining
Number of IUCN Red List species and national conservation list species with habitats in areas affected by HR5
EN15 may be at significant risk, and actions taken to support these rights
operations, by level of extinction risk
EN16 Total direct and indirect greenhouse gas emissions by weight Operations identified as having significant risk for incidents of child labor, and measures taken to
HR6
contribute to the elimination of child labor
EN17 Other relevant indirect greenhouse gas emissions by weight
EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved Operations identified as having significant risk for incidents of forced or compulsory labour, and
HR7
measure to contribute to the elimination of forced or compulsory labour
EN19 Emissions of ozone-depleting substances by weight
EN20 NO, SO, and other significant air emissions by type and weight
Percentage of security personnel trained in the organization’s policies or procedures concerning
HR8
EN21 Total water discharge by quality and destination aspects of human rights that are relevant to operations
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the
EN24
Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally
Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly
EN25
affected by the reporting organization’s discharges of water and runoff
EN27 Percentage of products sold and their packaging materials that are reclaimed by category
Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with
EN28
environmental laws and regulations
Significant environmental impacts of transporting products and other goods and materials used for the
EN29
organization’s operations, and transporting members of the workforce
LA2 Total number and rate of employee turnover by age group, gender, and region XSO 1 Public health issues (SARS, swine flu, etc.)
XSO 2 Community investment strategies (particularly in developing countries)
Benefits provided to full-time employees that are not provided to temporary or part-time
LA3
employees, by major operations
Minimum notice period(s) regarding operational changes, including whether it is specified in Life cycle stages in which health and safety impacts of products and services are assessed for
LA5 PR1
collective agreements improvement, and percentage of significant products and services categories subject to such procedures
Percentage of total workforce represented in formal joint management–worker health and safety
LA6 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and
committees that help monitor and advise on occupational health and safety programs PR2
safety impacts of products and services during their life cycle, by type of outcomes
Rates of injury, occupational diseases, lost days, and absenteeism, and number of work related
LA7 Type of product and service information required by procedures, and percentage of significant products
fatalities by region PR3
and services subject to such information requirements
Education, training, counseling, prevention, and risk-control programs to assist associates, their
LA8 Total number of incidents of non-compliance with regulations and voluntary codes concerning product
families, or communities regarding serious diseases PR4
and service information and labeling, by type of outcomes
LA9 Health and safety topics covered in formal agreements with trade unions
PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction
LA10 Average hours of training per year per employee by employee category
Programs for adherence to laws, standards, and voluntary codes related to marketing communications,
LA11 Programs for skills management and lifelong learning PR6
including advertising, promotion, and sponsorship
LA12 Percentage of employees receiving regular performance and career development reviews
Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing
PR7
communications, including advertising, promotion, and sponsorship by type of outcomes
LA13 Diversity of governance bodies and workforce
Total number of substantiated complaints regarding breaches of customer privacy and losses of customer
LA14 Ratio of basic salary of men to women by employee category PR8
data
Additional sector specific labour indicators Monetary value of significant fines for noncompliance with laws and regulations concerning the provision
PR9
and use of products and services
XLA 2 Health and safety (specific issues relating to air travel, DVT, etc)
Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of
SO1
operations on communities, including entering, operating, and exiting
SO2 Percentage and total number of business units analyzed for risks related to corruption
SO5 Public policy positions and participation in public policy development and lobbying
Total value of financial and in-kind contributions to political parties, politicians, and related institutions by
SO6
country
Total number of legal actions for anticompetitive behavior, anti-trust, and monopoly practices and their
SO7
outcomes
Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with
SO8
laws and regulations
27
20
63
18
1
6
55
69
63
42
57
31
5
41
109
43
31
22
38
12
20
78
101
38
6
EC1 Direct economic value generated and distributed
Overall score
EC2 Climate change financial implications, risks and opportunities
Range of ratios of standard entry level wage compared to local minimum wage at significant locations of
EC5
7
4
7
5
1
0
7
6
6
7
1
1
4
13
7
11
8
3
7
6
7
6
6
5
9
operation
GOV (7)
EC6 Policy, practices, and proportion of spending on locally-based suppliers
Procedures for local hiring and proportion of senior management hired from the local community at
EC7
7
2
8
6
0
5
8
12
11
9
7
1
7
6
15
9
6
4
4
1
4
6
0
11
15
EC8 Infrastructure investments and services provided primarily for public benefit
EC (12)
EC9 Understanding and describing significant indirect economic impacts
1
3
4
0
0
0
0
0
5
4
2
2
2
2
2
10
5
4
2
0
0
1
0
4
6
XEC 2 Fair operating practices
PR (9)
XEC 3 Responsiveness to consumer concerns
2
0
4
2
0
1
3
0
3
5
3
6
3
3
2
10
0
6
0
2
2
3
0
5
6
Corporate Governance and Engagement
SO (10)
Governance structure of the organization, including committees under the highest governance
CG 1
body responsible for specific tasks, such as setting strategy or organizational oversight.
5
8
12
3
0
0
5
1
3
5
11
4
5
9
9
6
8
6
6
15
2
1
0
14
18
Indicate whether the Chair of the highest governance body is also an executive officer (and, if so,
CG 2
their function within the organization’s management and the reasons for this arrangement)
LA (16)
For organizations that have a unitary board structure, state the number of members of the highest
CG 3
governance body that are independent and/or non-executive members.
0
0
0
0
0
0
0
0
0
0
2
0
0
1
0
2
0
1
1
7
0
0
0
2
5
Linkage between compensation for members of the highest governance body, senior managers,
HR (9)
CG 4 and executives (including departure arrangements), and the organization’s performance (including
social and environmental performance).
5
3
28
2
0
0
32
2
19
17
29
13
8
26
11
25
10
14
39
1
4
15
0
37
42
Internally developed statements of mission or values, codes of conduct, and principles relevant to
CG 5
economic, environmental, and social performance and the status of their implementation.
ENV (41)
Additional sector specific governance indicators
Kingfisher Airlines
Philippine Airlines
Shanghai Airlines
Malaysia Airlines
Air New Zealand
Hainan Airlines
Asiana Airlines
Cathay Pacific
China Eastern
Japan Airlines
China Airlines
Tiger Airways
Eva Airways
Jet Airways
Virgin Blue
Korean Air
Air China
Air Asia
Qantas
Airline
Average score
New Zealand
Country
Hong Kong
Philippines
Singapore
Australia
Mainland
Malaysia
Thailand
Taiwan
Japan
Korea
China
India
© Responsible Research 2010 | Issues for Responsible Investors | 46
Annex 3: Airline scores
(percentages) References
1 http://www.aapairlines.org/resource_centre/AAPA_AR2009_Outlook2010.pdf
Japan
New Zealand
Hong Kong
Singapore
Mainland China
Thailand
Malaysia
Korea
India
Taiwan
Australia
Average score (percentage)
Philippines
2 http://www.aapairlines.org/AAPA_Annual_Report_2009.aspx
Country
3 http://www.iata.org/pressroom/pr/2010-02-01-01.htm
4 http://online.wsj.com/article/BT-CO-20100201-710697.html
5 http://www.iata.org/pressroom/pr/Pages/2010-02-01-01.aspx
6 Karlsson, T. 2007: Asian Aviation: Big Growth, Big Challenges. Heidrick & Struggles
International, Inc.
Kingfisher Airlines
Cathay Pacific
Japan Airlines
All Nippon Airways
Tiger Airways
Singapore Airlines
Shanghai Airlines
Shandong Airlines
Hainan Airlines
China Southern Airlines
China Eastern
Air China
Airline
Malaysia Airlines
Korean Air
Asiana Airlines
Jet Airways
Eva Airways
Virgin Blue
Qantas
Air New Zealand
China Airlines
Philippine Airlines
Thai Airways International
Air Asia
7 http://online.wsj.com/article/BT-CO-20100201-710697.html
8 http://www.aapairlines.org/resource_centre/AAPA_AR2009_ExcessiveRegulation.pdf
9 http://www.chinapost.com.tw/business/asia/asian-market/2010/02/08/244113/Open-
skies.htm and http://news.yahoo.com/s/afp/20100207/bs_wl_afp/asiaairlineaero-
spacetravel_201002070 45119
10 http://www.independent.co.uk/travel/news-and-advice/open-skies-deal-good-news-
for- asiapacific-passengers-1856368.html
11 http://www.eturbonews.com/14437/asias-budget-carriers-flying-high
12 http://www.eturbonews.com/14437/asias-budget-carriers-flying-high
13 http://www.springerlink.com/content/p764825454032270/
ENV (82)
14 http://www.atimes.com/atimes/Southeast_Asia/LB17Ae01.html
48%
17%
23%
39%
34%
32%
51%
45%
10%
16%
35%
21%
18%
12%
30%
13%
2% 15 http://www.atimes.com/atimes/Southeast_Asia/LB17Ae01.html
0%
0%
0%
2%
4%
5%
1%
6%
16 http://www.atimes.com/atimes/Southeast_Asia/LB17Ae01.html
17 http://www.docstoc.com/docs/27710420/Asian-Aviation-Big-Growth_-Big-Challenges
18 flight costs as per company websites, sourced April 27th 2010 for one month out,
HR (18)
one way
39%
28%
11%
11%
11%
Indicators (104 in total) – Percentage score out of maximum 208 points available
19 Button, 2009
6%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
6%
0%
0%
0%
0%
4%
0%
20 http://www.atimes.com/atimes/Southeast_Asia/LB17Ae01.html
21 http://news.bbc.co.uk/2/hi/uk_news/2327487.stm
LA (32) 22 http://www.breakingtravelnews.com/news/article/budget-airlines-have-lower-car-
bon- footprint/
47%
19%
16%
38%
25%
16%
28%
56%
16%
13%
34%
16%
19%
25%
19%
28%
44%
9%
3%
0%
0%
0%
9%
3%
6%
23 http://www.dailymail.co.uk/news/worldnews/article-1218473/Airline-goes-green-
asking- passengers-use-toilet-boarding.html#ixzz0mO5ziObr
24 http://www.iata.org/whatwedo/environment/climate_change.htm
25 http://www.iata.org/whatwedo/environment/climate_change.htm
SO (20)
26 http://www.iata.org/NR/rdonlyres/DADB7B9A-E363-4CD2-B8B9- E6DEDA2A6964/0/
30%
50%
10%
15%
10%
20%
30%
25%
15%
10%
10%
10%
30%
14%
15%
30%
15%
25%
0%
5%
0%
0%
0%
0%
0%
Global_Approach_Reducing_Emissions_251109web.pdf
27 http://www.iata.org/whatwedo/environment/emissions_policy.htm
28 http://www.iata.org/whatwedo/environment/emissions-europe.htm
PR (18)
29 http://ec.europa.eu/environment/climat/aviation/index_en.htm
11%
28%
22%
17%
22%
33%
22%
11%
22%
28%
56%
13%
11%
11%
11%
0%
0%
0%
0%
0%
0%
6%
0%
6%
0%
30 http://www.aapairlines.org/resource_centre/AAPA_AR2009_Environment.pdf
31 http://www.asiatraveltips.com/news10/192-ThaiAirways.shtml and http://www.
foodweek.com.au/main-features-page.aspx?ID=6587
32 http://www.aapairlines.org/resource_centre/AAPA_AR2009_Environment.pdf
EC (24)
33 https://www.cdproject.net/en-US/Programmes/Pages/cdp-water-disclosure.aspx
63%
25%
29%
33%
21%
25%
17%
33%
29%
50%
63%
46%
17%
17%
25%
38%
26%
29%
38%
46%
4%
0%
0%
4%
8%
34 http://economictimes.indiatimes.com/Airlines-/-Aviation//articleshow/5842620.cms
35 http://www.iata.org/NR/rdonlyres/DADB7B9A-E363-4CD2-B8B9- E6DEDA2A6964/0/
Global_Approach_Reducing_Emissions_251109web.pdf
GOV (14)
36 http://www.enviro.aero/Content/Upload/File/BeginnersGuide_Biofuels_WebRes.pdf
93%
50%
29%
50%
36%
50%
43%
50%
29%
50%
43%
64%
36%
43%
21%
57%
79%
50%
39%
50%
43%
7%
0%
7%
7%
37 http://www.iata.org/pressroom/pr/2010-02-01-01.htm
38 E6DEDA2A6964/0/Global_Approach_Reducing_Emissions_251109web.pdf
39 http://www.iata.org/NR/rdonlyres/DADB7B9A-E363-4CD2-B8B9- E6DEDA2A6964/0/
Global_Approach_Reducing_Emissions_251109web.pdf
Overall score
40 http://www.iata.org/NR/rdonlyres/DADB7B9A-E363-4CD2-B8B9- E6DEDA2A6964/0/
Global_Approach_Reducing_Emissions_251109web.pdf
20%
26%
30%
10%
13%
30%
49%
38%
10%
11%
15%
33%
21%
52%
18%
18%
15%
27%
20%
2%
3%
0%
9%
3%
6%
41 http://www.iata.org/pressroom/pr/2010-02-01-01.htm
42 http://www.enviro.aero/Biofuels.aspx
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