Next-generation bundling: Emissions offsets included

In the face of mounting social pressure, European airlines are upping their environmental game. Are emission offsets about to follow the path of WiFi and online-purchase delivery fees, where they become bundled into the basic price?

Passengers want simplicity. They also want it all. Their needs are often contradictory. They want to pay a rock bottom price and receive a luxury product. They want environmental sustainability and easy access to non-essential weekend leisure breaks.

Airlines are receiving a clear message from the public that sustainability is important. Yet Austrian Airlines says fewer than 1% of all passengers choose to voluntarily offset their emissions.

The problem may ultimately boil down to choice. By offering passengers the option to offset, airlines are asking their customers to do two things. Firstly, to make a choice. And secondly, to pay more.

This makes life more complicated and more expensive for the passenger. It goes against their desire for a simple, cheap experience. Passenger uptake then remains at 1%, leaving customers with unmet needs. Moreover, airlines remain cast as the ‘bad guy’ when it comes to the environment.

However, Air France, British Airways and easyJet are breaking this cycle. In response to mounting social pressure, Air France and BA committed to cover the cost of offsetting their domestic flight emissions offsets themselves, on behalf of the passengers. EasyJet then followed in quick succession, upping the ante to network-wide offsets, at no direct cost to the passenger.

In my opinion, this is an incredibly smart move. These three airlines are getting ahead in a game, where they can either choose to be proactive winners, or victims of social pressure and regulatory intervention.

Airlines cannot avoid their environmental responsibility. The EU emissions trading system (EU ETS) and ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) are already realities. There is no question that airlines will have to offset their emissions, so there is a unique opportunity to use this reality as a customer-engagement tool, because taking on this cost is ultimately inevitable. Being a first mover takes ownership.

Conversely, Scandinavian LCC Norwegian announced the launch of a customer-funded offset program on Dec. 5. In the face of the bold actions of Air France, British Airways and easyJet, this feels archaic. BA has been offering voluntary offsets since 2006.

Then there’s the impact on customer decisions. I remember a psychology experiment, involving jam. People who had just three jams to pick from reported greater satisfaction with their choice than people who were offered a wider selection. Sometimes too much choice is counter-productive to customer satisfaction.

Passengers want a simple, guilt-free experience. Air France, British Airways and easyJet are taking away the ‘do I offset or not’ choice and turning it into a brand decision. They are inviting the passenger to proactively choose their airline, based on its overall cost and values, rather than feeling guilted into paying more.

Paying separate fees for WiFi in a hotel, or online-order postage already grates on customers. They expect these things to be part of the product. Airlines have been through the bundling-unbundling cycle many times. They know how it works.

When it comes to airline emissions, I believe customers are saying: “You handle it. Don’t make me decide.” They want the airline to take responsibility and do ‘the right thing’ on their behalf.

Victoria Moores [email protected]