{"id":24321,"date":"2017-11-15T17:36:41","date_gmt":"2017-11-15T22:36:41","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/stuck-in-autopilot-southwest-airlines-pedestrian-approach-to-climate-change\/"},"modified":"2017-11-15T17:36:41","modified_gmt":"2017-11-15T22:36:41","slug":"stuck-in-autopilot-southwest-airlines-pedestrian-approach-to-climate-change","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/stuck-in-autopilot-southwest-airlines-pedestrian-approach-to-climate-change\/","title":{"rendered":"STUCK IN AUTOPILOT: SOUTHWEST AIRLINE\u2019S PEDESTRIAN APPROACH TO CLIMATE CHANGE"},"content":{"rendered":"

Airlines are a major contributor to increasing environmental climate change due to their large contribution to global fuel consumption and the associated release of greenhouse gases [1]. As a result, companies have actively attempted to decrease their contribution to climate change through initiatives focused on fuel-efficiency and alternative fuels. Southwest Airlines is an industry leader that consistently aims to surpass greenhouse gas emissions targets by investing in partnerships and innovation that push continuous supply chain and operational improvement. [2]<\/p>\n

Despite Southwest\u2019s efforts to mitigate its impact on global climate change, has its focus on mitigation distracted the company from focusing on the operational business challenges it will face in current and future climate change? <\/strong><\/p>\n

Global climate change: Impact on Southwest\u2019s business <\/em><\/p>\n

At least two documented consequences of climate change have significantly impacted Southwest Airlines: the increase in hurricane<\/u><\/strong> frequency and intensity and the rise in air temperatures<\/u><\/strong>. This year, the world witnessed the historically severe hurricanes make landfall in Texas, Florida, the Caribbean, and Puerto Rico, which left many airports temporarily closed due to massive wind and water damage. Southwest attributed its third quarter losses of ~$100M directly to these natural disasters. [3]<\/p>\n

Besides financial metrics, Southwest is also qualitatively impacted by the rising global air temperatures. As temperatures increase, the hotter air causes difficulties in planes\u2019 ability to takeoff. Ultimately, airlines must delay flights until conditions improve or reduce the weight aboard (i.e., remove either passengers or cargo) until conditions are suitable. Since 1980s, the number of weight restricted summer days has increased validating the persistence of this problem. [1]<\/p>\n

Reactive measures taken by Southwest\u2019s leadership team <\/em><\/p>\n

In response to increased hurricane disasters and air temperature, Southwest\u2019s management team has lead with safety and people first approaches, but has yet to truly demonstrate a comprehensive strategic response to the looming environmental threats facing the business.<\/p>\n

For example, in the wake of Hurricane Harvey, Southwest\u2019s biggest challenge was its limited fuel supply after the hurricane surge subsided. As a short-term proactive measure—in fear that operations of refineries would not resume immediately—Southwest organized tanker trucks to deliver fuel from Dallas to Houston. Southwest was fortunate to have a small buffer of fuel on-hand to resume routes until additional fuel could arrive. In addition, Southwest communicated to its workforce the importance of limiting its use of unnecessary fuel (e.g., air-conditioning when parked). Southwest\u2019s point-to-point flight pattern model also contains some of the challenges within specific geographic regions. [4]<\/p>\n

Increasing air temperatures have seen even less action from the management team. The general solution has been to reduce plane weight during extreme temperatures, \u201cTypically in the hotter days of the summer, you may have to bump payload, which includes cargo and\/or passengers\u201d[1]. Again, Southwest\u2019s emphasizes safety over profit by using a reduction in passengers to mitigate takeoff issues rather than implementing an alternative strategy (e.g., rescheduling) to keep planes full. [1]<\/p>\n

Taking the climate response off autopilot<\/em><\/p>\n

Southwest\u2019s previous focus on limiting their contribution to global climate change will not be enough to prepare the business for the operational impacts of today\u2019s new climate conditions. To reduce the impact of their topline, Southwest needs to build in new measures that prepare its operations to better manage the risks associated with severe weather events<\/strong>.<\/p>\n

Mitigating the effects of severe natural disasters on operations:<\/strong><\/p>\n