Carbon offsets

The offset option

EXTRA leg room, travel insurance, space in the hold for a suitcase: all of these are available to the airline passenger seeking to mitigate the anxieties of travel, for an extra fee in most cases.

What about carbon offsets? Some carriers offer them, including Virgin and Continental, which ranked first and second respectively in Greenopia’s recent rankings of “greenest airlines”. But it’s not common practice; with Continental you have to dig around the website for the option, and even for Virgin, that four-leaf ranking has much to do with the relative newness of the fleet, and its corresponding efficiency.

Carbon offsets would not be huge moneymakers for the airlines, and it’s not clear that they would be much of a draw for travellers either. “Commercial flight, to my mind, is such an enviro-no-no that it's tough to get my head around the fact that choosing one airline over the next makes a difference,” writes Jeff Nield at Treehugger. That’s a popular view among environmentally minded travellers. Two years ago, for example, Responsible Travel, an adventure tourism company, announced that it was cutting its offsetting option on the grounds that offsets give people an incentive to be cavalier about their consumption.

Still, it would seem that if consumers want carbon offsets at all, they will want them at the same time as their tickets. If you want to buy offsets via TerraPass, for example, you have to make a separate task of it, and estimate your consumption. The transaction costs would be lower if you could add the offset with the click of a button and eliminate the guesswork. And if part of the point of offsetting is to send a message—that as a consumer, you’re willing to pay to mitigate your environmental impacts—offsets from airlines are a direct way to do that.

I recently raised the question with Bob Jordan, the vice-president for strategy and planning at Southwest Airlines, and now the president of AirTran Airways following its acquisition by Southwest. The offset option would seem to be a natural fit for Southwest, which has heavily promoted its decision not to charge for bag fees, but does offer a variety of add-ons, like early check-in and pet transportation. Mr Jordan said the carrier had considered offering carbon offsets, but concluded that they were kind of gimmicky; at the European carriers, for example, offset options simply don’t get that many takers. Southwest had decided to adopt other environmental measures instead. For example, it outfitted its whole fleet with rounded winglets. These are expensive, but improve aerodynamics so as to reduce fuel consumption by 3-4%—no bad thing when airlines have been hammered lately by high fuel costs. (Southwest was one of the few to post a profit in the first quarter, albeit a wafer-thin $5m on $3.1 billion in revenue.) Another example of one of the truths about environmentalism: motives may be worthy, but you see the biggest efforts to reduce emissions when the markets make the case for it.

Incidentally, the question of ancillary revenues is an interesting one. A new study from the Amadeus IT Group finds that airlines brought in $22 billion from add-on fees last year, up nearly 40% from 2009. Southwest has done well on ancillary revenue too, even though it doesn’t charge bag fees or change fees, two of the biggest moneymakers. That may seem to be at odds with the airline’s expressed philosophy. (“We’re not about getting you a poor experience on the airplane, or nickel and diming you for everything,” said Mr Jordan.) But perhaps Southwest’s options strike passengers as genuinely optional—early check-in, for example, or WiFi on some flights. Those fees don’t annoy passengers in the way that charging them for a soda does.