Corporate Social Responsibility in the Airline Industry

Corporate Social Responsibility (CSR) has become a top priority for businesses over the last 30 years, as there is now more awareness around the impact that operating a business has on the environment and other important social issues.

As some consumers also now make decisions based on their values and the reputation of a business, organisations that are well known for being socially responsible and ethical can use that reputation as a competitive advantage. The theory is that if two similar companies are offering the same service at a similar cost, the consumer will usually choose the one that shows they are more committed to social responsibility.

The aviation industry is one of the largest contributors to carbon emissions (contributing 3% of global emissions), so these companies are under even further scrutiny regarding how they operate. Fuel emissions and noise pollution from aircraft both have a considerable impact on the environment and companies who can demonstrate actions to improve fuel efficiency and reduce air pollution can boost their corporate image.

The European Commission defines CSR as the voluntary combination of corporate, social and environmental concerns in the business processes and the interaction of these with stakeholders.

As well as potentially giving organisations a competitive advantage in their industry, social responsibility plays a huge part in reducing carbon emissions and meeting government carbon net-zero targets.

Carbon emissions

The area that most airlines concentrate on in regard to CSR is reducing carbon emissions, given that the airline industry’s fuel consumption is so large. 23% of carbon dioxide emitted into the environment is from the transportation industry and apart from the travel restrictions imposed during the COVID-19 pandemic, the levels of carbon emissions have been increasing.

Airlines have invested in improving fuel efficiency but not just because it is socially responsible, fuel is a significant cost for airlines, so improving fuel efficiency can help airlines to make more profits. The bonus is that they can use their environmental reports and statistics to provide evidence that they are contributing less to the industry’s emissions compared to other companies.

Fuel efficiency can be improved by reducing the weight being carried and ensuring the least amount of fuel is used by improved flight route planning.

In addition to improving fuel efficiency, other environmental impacts such as good waste management processes form part of the CSR activities that airline industries can implement. Ensuring that there is minimal food waste, reducing packaging and only using recyclable packaging are some methods used to reduce carbon emissions

 

Health and well-being of employees

The approach that airline companies take towards looking after their employees is another element of CSR. If an example of poor treatment of employees is publicised, this can have a detrimental impact on the company’s image. Having employee well-being policies, supporting employees’ mental health and other well-being factors contribute to the perception of how airlines look after their employees. Fair pay and employment benefits are also considered important for CSR value.

 

Welfare of society

The aviation industry is predominantly used for tourism but it is also essential for humanitarian aid and providing access to remote areas of the world. Many airlines raise considerable money for charities to benefit society.

Taking a holiday abroad is considered important to many people’s well-being, giving them the chance to recharge their batteries and see a different part of the world. There are many other examples of the positive impact that airlines have on the welfare of society and raising awareness of these activities can help to improve the company’s image and show a commitment to CSR.

 

 

 

How Effectively Do Airlines Cater Meals?

Like any type of profitable business, airlines must develop the most effective ways to deliver services to generate adequate profits to be able to continue to operate. Many financial decisions must be taken to balance the ability to provide a great passenger experience with keeping costs to a minimum.

To effectively determine the flight ticket prices set, every single cost must be accurately monitored and real-time data should be available to help airlines to set the ticket prices. Airlines who are not using the latest technology will not have the relevant data to enable them to set the pricing correctly or to adapt to spikes in costs quickly enough.

Catering is one of the aspects of airline operation that can lose a lot of money if not managed most efficiently. Every single item of the catering services, even small items such as salt, pepper or napkin are individually priced and taxed. Our Flight Plan module allows for this to be possible. It accounts for each item on a tray as well as the individual tax price depending on the country that it is in and flying to.

Last-minute changes such as cancelled or delayed flights or last-minute passenger bookings make airline catering management more difficult. This is another reason that having a software solution with real-time data is so important. Our Flight bill allows last-minute changes to be made between airline and caterer and keep both up to date.

Along with this our Dynamic invoicing module allows for all anomalies to be detected and then disputed between caterer and airline to ensure that the invoice is accurate.

 

Using software to monitor item costs

Software solutions provide information about how much is being spent on each item and catering service managers can make decisions to switch suppliers to find more cost-effective solutions.

Some in-flight catering software will also enable airline staff to enter complaint data regarding the quality of the catering service, so that necessary improvements can be identified, such as quality issues. Running out of certain items can also be recorded along with the number of requests for the items once they have been sold. This helps to manage meal and stock planning to suit customer demand, rather than simply relying on the amounts that have been historically ordered on previous flights.

Accurately forecasting the right number of meals is an integral part of catering planning, as wasted food will cost money. In the meantime, there will be unhappy, hungry customers who don’t get the meal they wanted may choose a different airline in future. As well as the costs of not getting the meal numbers right, storage on an aircraft is minimal, so only a certain number of meals can usually be stored on some smaller aircraft.

Intelligent in-flight catering management is key to providing an airline catering system that enables effective ticket pricing decisions that will drive the required profit. Our dynamic invoicing allows any anomalies to be detected and disputed with the caterer and our flight bill module allows last-minute changes to be made for a decrease or an increase. Find out more about how Promeus can help your airline to cater meals more efficiently.

A Breakdown of Flight Economics

With passengers facing increased prices for flights, many people are questioning why flights cost as much as they do. Airlines are striving to get the balance right between making adequate profits and not outpricing customers out of flying. There are so many costs involved in operating as an airline and the actual flights are just one aspect of that.

Here’s a breakdown of the main costs that are contributing towards the cost of flight tickets:

Fuel

Fuel is one of the largest costs for airlines and with fuel prices increasing by around 150% in the last year, this is the biggest concern for airline companies. Fuel prices are fluctuating all of the time and the fuel costs per flight will depend on distance, the type of jet, load, weather conditions and many more factors. As an example, a B747 Jumbo Jet flight from London to New York would cost over £50,000 in fuel based on the current fuel prices.

Employee salaries

Airlines have to employ a large number of staff in order to operate, including pilots, flight attendants, ticket agents and ground support. As well as paying salaries and additional benefits to staff on payroll, most airlines will pay contracts for cleaners, caterers and baggage handlers. Studies show that around 35% of an airline’s operating expenses are spent on staffing.

Fleet ownership and maintenance

Plane re-fueling

Purchasing or leasing, storing and maintaining aircrafts accounts for a large proportion of the operational costs for airlines. Many airlines lease their aircrafts to keep costs lower, as buying a basic Boeing 737-700 plane costs upwards of £70 million, while other aircrafts will cost considerably more. Leasing an aircraft will usually cost from £350,000 per month, depending on the aircraft model. Replacing parts cand regular maintenance an also be very expensive but essential costs to ensure that aircrafts meet safety regulations.

Taxes and duties

Like any other businesses, airlines must also pay their required taxes and duties, which will be calculated based on their profits and other tax details.

Miscellaneous expenses

Airlines will also have lots of other relatively smaller costs such as insurance for lost luggage add leasing desks from the airport.

Airlines have been facing severe disruption in recent years with pandemic travel restrictions and are still recovering from the financial losses from that period. Now with fuel price increases to deal with as well, airlines must identify as many cost saving opportunities as possible.

Many airlines are utilising technology to help reduce costs by using a wide range of tools and digital solutions that can drive operational efficiencies. Lomature and Promeus software can help airlines to operate more efficiently by identifying smarter ways to manage catering plans and other in-flight services.

Through intelligent systems that monitor and report on catering management, the software enables airlines to save money while also helping to deliver a better quality of service to customers. Using a sophisticated Galley Planning tool, Lomature can streamline each galley load and keep waste to a minimum.

Find out more about Lomature and the other solutions that are available from Promeus.

 

The Financial Times created an in-depth article about fuel prices – read it here.