Interview with:Robin Hayes, CEO, JetBlue
28 Aug 2018
Consumer priorities are shifting across a number of industries, and the aviation sector is no exception. In the past, businesses could get away with offering a simple, good-value service, but today’s customers expect airlines to take sustainability as seriously as they do profitability.
One airline looking to integrate long-term environmental planning and corporate social responsibility into its core business strategy is JetBlue. The airline sets goals to meet both short and long-term financial needs, while also fulfilling its commitment to reducing emissions.
Now, as the market evolves beyond sustainability to incorporate more environmental, social and governance (ESG) issues, JetBlue is well positioned to lead the aviation sector into a new, more environmentally conscious future. European CEO spoke to Robin Hayes, CEO of JetBlue, to learn how the company is adapting to new environmental and social pressures, while continuing to meet the financial demands of its shareholders.
In terms of ESG, why is transparency so important?
At JetBlue, we believe in communicating transparently about our plans and achievements. Since 2006, we’ve shared our social and environmental efforts and impacts publicly. Companies report on these topics because customers demand this information – and rightfully so.
ESG itself is focused on the risks that stem from factors relating to larger environmental and social pressures – in this respect, transparency is key. Investors want to see that we have a viable plan to stay profitable long into the future, even when faced with looming environmental and social challenges.
ESG relates to corporate financial reporting, investor relations, enterprise risk management and shareholder engagement. While sustainability is inherently inward-looking and operational, ESG focuses on external forces, planning for scenarios that are likely to arise in the near future.
What kind of climate risk mitigation strategies does JetBlue have in place?
JetBlue is part of an international agreement led by the International Air Transport Association (IATA), which aims to reduce global CO2 emissions through the purchase of carbon offsets. As such, we follow IATA’s fuel efficiency and CO2 reduction targets. Since 2008, JetBlue has purchased more than two billion pounds of CO2 offsets and has invested $87m (€74m) in new in-flight technology to improve fuel efficiency and reduce emissions.
Today’s customers expect airlines to take sustainability as seriously as they do profitability
We are investing in technology today to make travel better tomorrow. For example, JetBlue has a venture capital subsidiary, JetBlue Technology Ventures, based in Silicon Valley. Its mission is to incubate, invest in and partner with early-stage start-ups at the intersection of technology and travel.
One of its portfolio companies is Zunum Aero, a start-up that is developing hybrid-to-electric planes to service regional flights via local airports. Short-haul air travel currently generates 50 percent of all commercial aviation emissions, and these aircraft will help address the industry’s global emissions by providing a zero-emissions option for short-haul flights.
Can you tell us about your long-term environmental strategy?
JetBlue continues to work closely with the US Federal Aviation Administration to implement the newest technological innovations, including the Next Generation Air Transportation System, into our growing fleet. This encompasses dozens of innovative new technologies designed to help customers arrive at their destination more quickly, while consuming less jet fuel and producing fewer emissions.
In 2016, we signed the industry’s largest biofuel contract, committing to the purchase of 33 million gallons of blended renewable jet fuel (RJF) annually for at least 10 years, starting in 2020. By signing a purchase agreement for RJF at competitive prices before mass-market adoption, JetBlue was able to secure a preferential price per gallon while simultaneously helping the emerging RJF industry gain traction.
We are one of the few US carrier airlines with offtake agreements for RJF. This biofuel significantly reduces emissions, allowing us to meet our goal for long-term fuel usage.
What is the 100x35JetBlue initiative?
As the number one airline in Puerto Rico – JetBlue has more services to the island than any other airline and nearly 500 local crewmembers that call the island home – we take our commitment to the local community very seriously. Just days after Hurricane Maria made landfall in 2017, we launched our 100x35JetBlue initiative – our commitment to supporting both short-term relief and long-term recovery efforts.
A nod to Puerto Rico’s 100×35 mile dimensions, we put our heads together and came up with at least 35 ways in which we could help the community, and committed to implementing our efforts within the first 100 days of the hurricane hitting and beyond. This included everything from providing seats for emergency personnel, relief workers and non-profits at no cost, to supporting the replenishment of vegetation.
Now that we are well beyond the 100-day mark, we are proud of our recovery efforts and are committed to carrying out our promise to our crewmembers and the broader island community to help Puerto Rico rebound and rebuild stronger than before.
How do electronic charging stations fit into your environmental strategy?
At New York’s JFK International Airport, we’re doing our part for the environment by swapping out our gas-powered ground service equipment (GSE) and moving to electric-powered versions, known as eGSE. We will be installing 38 charging stations that will power 116 baggage tugs and belt loaders. It’s a move that not only reduces fuel consumption and noise pollution, but also makes the equipment safer and easier for crewmembers to use.
There’s also a convenience factor for crewmembers to be able to plug in a piece of equipment on their way to the break room and have it ready to use when it’s needed – no more having to drive to a fuelling station, wait in line and spend time filling up the tank. In fact, more than 80 percent of crewmembers said they preferred the new equipment to the old, with one even commenting: “It felt like the equipment was made with crewmembers in mind.”
The equipment was also made with the environment in mind. We estimate that, over the 13-year lifespan of one charging station, 25,000 fewer tons of carbon monoxide will be produced. Altogether, the JFK fleet conversion will reduce greenhouse gas emissions to a degree equivalent to taking approximately 9,000 cars off the road or planting 50,000 acres of trees.
Can you tell us about any other innovations that JetBlue is incorporating?
For our existing order of 85 Airbus A320neo family aircraft, which will begin to enter our fleet in 2019, we selected Pratt & Whitney geared turbofan engines. These engines ensure our growing fleet has the most technologically advanced engines that use less jet fuel, release fewer emissions and produce less noise.
Also, at our home terminal in JFK Airport, we built our T5 Farm to promote urban agriculture and provide more green space for our customers. The 24,000sq ft farm features 3,000 crates of blue potato plants, herbs and other produce.
Each farm season, we grow more than 1,000lb of potatoes and over 2,000 herbs, most of which are donated to local food banks. This has become a popular volunteer opportunity for JetBlue crewmembers, where they can help plant, maintain and harvest our crops. In this way, our ESG initiatives benefit our crewmembers, our customers and the wider world.