Podcast: Will Blended Wing Aircraft Be Part Of EasyJet's Future Fleet?

After partnering with JetZero, easyJet CEO Johan Lundgren shares his thoughts on future technologies and eco-initiatives.

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Rush Transcript

Victoria Moores:

Hello everyone and welcome to Window Seat, our Aviation Week Network air transport podcast. I'm Air Transport World Europe and Africa Bureau Chief Victoria Moores. Welcome on board. This week I'm joined by easyJet CEO Johan Lundgren. Welcome, Johan.

Johan Lundgren:

Thank you very much, Victoria.

Victoria Moores:

So we're here at Cranfield University just north of London basically to get an update on easyJet's sustainability strategy and what you are doing together with your partners. A couple of years back, in 2022, you presented your sustainability strategy—an update to that. That's where you signed up and complied with the Science Based Targets Initiative. And I'm wondering, in the last two years, what progress have you seen, Johan?

Johan Lundgren:

Well, it is early on, as you said. This is a roadmap that takes us out to 2050, and I think we've been also very clear when we introduced this two years ago that whilst we have identified the areas that will get us to where we want to do, we can't—nobody can actually say what is going to be delivered. So what we then want to do is to come back to our stakeholders to give an update on where we stand, both on the things that [are] working well for us and also what we see [as] the challenges are in there. So we're very pleased to say that two years into this, we can say that in 2023 we have already reduced 5% of our carbon intensity that we're measuring on per-passenger kilometers flow versus the 2019 baseline. So we actually are ahead of the plan we had. But, Victoria, we're only two years into this. So we got to be mindful that there's a long roadmap to go.

But I think more interestingly and what we discuss today and talk about today, we've gathered a number of stakeholders because we said all along that the roadmap to net zero is not something that easyJet can do on its own. We need partners, we need everything from OEMs. We had a presentation from Airbus and Rolls-Royce as an example. Airports—we've heard from Gatwick today; we're working with Bristol Airport. Regulators—we had the aviation minister here in the UK, Mike Kane was here today. We talked about the airspace monetization—that means a lot for ourselves as well. And then also zero-emission technology. So we had the CEO and co-founder of JetZero [Tom O’Leary], an American company, who's working on what is called a blended wing concept that could look with conventional fuel methods to reduce the carbon intensity by some 50%.

So we see ourselves at easyJet as somebody who can gather this as a hub for what is the latest, who is the most/foremost in the industry because we believe that that is the license we have to grow in this industry. So I think that 5% is being achieved already in terms of carbon intensity reductions and we gave them an update also then on some of the levers—that is critical for us going forward.

Victoria Moores:

Just going to pick up on two threads there. The first one is the 5% and then the second part is going to be about that JetZero partnership. You mentioned that you've reduced your carbon emissions intensity by 5% since we last spoke two years ago. There is the argument from environmentalists that it's not good enough simply to improve your efficiency, although obviously efficiency improvements are really important. I imagine that perhaps your total emissions have grown over that period. How do you respond to that fact that it's not about the efficiency, it's about your total environmental impact?

Johan Lundgren:

Well, actually in this case it is not because you remember we came out of COVID in 2022. So it's a very different thing. So it's not only depending on that, but I think you're right. I think that the view is to say here, to say we want to continue to grow. And I think that there is a realization now across all markets that see clearly that consumers and customers will continue to fly more and even fly more than they did before. There wasn't a long time ago, you and I had the discussion about, because of sustainability issues and concern about the environment, will people do the lifestyle change, will they fly less? That's not what we're seeing, and that's actually not what we've been told also when we do the service. They expect us to decarbonize. They expect us as an industry to reduce the carbon emissions and the impact we have on the environment. So I think that the realization that people will continue to fly and fly more, it's definitely there because that has already happened. So that's the number one thing.

The second part of that, however, is that not all airlines are equal. We've talked about this today where I said that, look, we have achieved our lowest carbon intensity number that is lower than ever: 67 grams per passenger flown, per kilometer flown. And we are competing against airlines who [have] intensity numbers that are 20%, 25%, sometimes 30% higher than us. So not all airlines are as fast and as ahead of the journey in the same [way] we are. So we believe also consumers will make a choice. And we're doing a lot in terms of fleet renewal, operational measures and things. And we also acknowledge that to the market. And I think more and more consumers will choose companies who are ahead of this game, who are leading, who are serious on this whole thing. But then we also see in the midterm, in the long term, which we heard today, there are true groundbreaking innovations that could get us in a place through hydrogen or through JetZero that we talked about today that has a significant different impact on the environment.

Victoria Moores:

You talked there about your competitors and that comparison between the environmental impact of two airlines isn't necessarily equal. I'm wondering where you stand on that visibility, the transparency of environmental information about flights because we've got the EASA environmental label coming in. We've got a lot more transparency from things like the travel impact model, things like that coming through. Where does easyJet stand on those metrics?

Johan Lundgren:

We're positive about that, but it's got to be also done in a transparent and a fair way. And the difficulty is actually how do you measure it? Because we would like to see that the business model is taken into consideration. So if you fly, for instance, between, take London to Milan as an example, you need to look at what is the efficiency per person who's on board that plane? What is the load factor you're having? What is exact fuel consumption that you have? And you need to break it down at the root level to make that real comparison, say, exact. And that's very challenging to do. So I can see that there will be difficulty in doing that. But what we do know is the fact that airlines are disclosing their carbon measured in grams per passenger flown on kilometer. And that is one way of looking at that.

But generally I am a firm believer that we have to take and pay for our share of the impact that we have on the environment. And I'll like to see, and at easyJet we've been very keen to support, the polluter pay principle where actually whatever incentives you have that's going to give less impact on the CO2 emissions or reduction [of] CO2 emission, you should also benefit from that through various ways, whether you have a different taxation or you're getting different airport charges as an example.

Victoria Moores:

So how that translates into passengers is that if they choose easyJet as a sustainable airline, then they would not have to pay the kind of penalties that it might cost if the airline was less sustainable.

Johan Lundgren:

Yes. So as an example then, I think it would be fair that easyJet would find itself having incentives in terms of how we deploy our most modern aircraft and we can drive the stimulation of the new aircraft versus flying with a legacy carrier who flies with a 25-year-old aircraft [and] who burns 15% more fuel than we do, who actually have business class seats in there, who has less people on the plane. So actually your emission per passenger is much, much higher. That should be penalized and the opposite should be incentivized, I think. And that's a conversation we're having with airports and decision makers across Europe.

Victoria Moores:

Coming back to the announcement that's been made at this event about your partnership with JetZero—like you said, JetZero is developing a blended-wing body aircraft with the ultimate aim of being zero emissions. What made you choose this project in particular because there are lots of different initiatives out there, lots of different concepts, projects?

Johan Lundgren:

Yeah. No, you're right. And, first of all, just the fact that there is so many of them out there is fantastic, because it just demonstrates also that individuals and companies and these are supported by ... JetZero is backed up by the US Air Force, by NASA, by FAA, as an example, as well. So there are similar initiatives taking place because that is that people are seeing that these technologies will some day work.

What we are doing is to make sure that we are staying very close to people who are at the foremost line of their technologies, whether that is hydrogen—and I argued that Airbus and Rolls-Royce would be among them—JetZero on the blended-wing concept. We had Wright Electric before that was working on the battery solutions. So we will continue to work for partners who are looking to produce a safe aircraft at scale, an aircraft that can be flown in an affordable way and that would work with an easyJet business model. That's the way we scout them. But we do, you're right. I mean, we do get a lot of proposals to work with many companies, but this [JetZero] is a serious company and being the first European airline to join them in the airlines working group is something we feel very privileged about.

Victoria Moores:

And we heard from JetZero that they're looking for about 12 airlines. They've already had a partnership with Alaska [Airlines] on the commercial airline front. So to be one of the first two on board that project, will you be looking to perhaps recruit some of your airlines for Europe partners to come on board with this … or?

Johan Lundgren:

Yeah, why not? I mean, ultimately it's going to be up to JetZero to determine that. But this is not a way where you are competing and thinking that, oh, I only want to take this space and nobody else should be in there. It's actually worse the other way around. We will progress faster, we will accelerate faster on this journey, the more [airlines] who come along on this journey, whether that is hydrogen, whether that is the blended-wing concept, whether that is SAF [sustainable aviation fuel], whatever that is. The push for airspace modernization, the more who comes on at the forefront on this journey, the quicker the development will go. So we will benefit from that. I'm always encouraging, in this case, competitors to join us to lead in front on this.

Victoria Moores:

Which is part and parcel of today's event is—

Johan Lundgren:

Yes, it is.

Victoria Moores:

—bringing those technology providers together and then putting them in front of the media and really pushing forward, I think.

Johan Lundgren:

Absolutely.

Victoria Moores:

I'm wondering, are there any tough questions about sustainability which aren't being asked? We often hear about the same pillars where progress needs to be made. So like air traffic management, aircraft technology, sustainable fuels, efficiency of operations. Do you think there's anything that's being missed in everything that's being looked at, at the moment?

Johan Lundgren:

First of all, I think that we ourselves at easyJet, the toughest question we have asked ourselves—there's nobody who's raising things that we don't challenge each other on as well. We have this belief, and I feel very strongly about [it], you have to have the imagination. If you're a leader like easyJet is in this space, you have to have the imagination of what can be there, what can happen, what is the thing you can foresee, but you also need to counter that with a healthy dose of realization. What is actually the physical boundaries of what it is that's actually not going to change by exponential development of some of this technology. It just won't happen. So you need to have a healthy skepticism towards some of the technologies that is out there, but you need to have determination that actually this will work, this can happen. You have to invest time in this. We have to invest money and energy and resources in that, and you have to find a like-minded partner to do that.

So in that process, we are challenging ourselves, I think, more than any and asking the most difficult questions ourselves internally and with our partners, rather than what they have met. But I think that one of the things that will be a challenge is, of course, that you take a roadmap, as an example—if you're starting to see that [a] substantial part of the things that sits outside our control, that will have a significant impact on the roadmap, if they [don’t] come into place and they don't happen, then of course we need to think very carefully and hard about how we can scale up other things. There will be carbon removal technologies out there; the problems with some of those are that they will be very expensive. That means that it won't be affordable for customers because somehow this expense has to come from somewhere, and we want to make sure that this is affordable apart from safe and also works in our business model.

But, like I said, this is an update today. We're ahead of the plan. Airspace monetization is really important for us to get through. And I think that would be one of the things that is probably one of the more challenging ones.

Victoria Moores:

Yeah, I'm going to pick up on that thread because that was one of the things that has been discussed today is obviously you don't talk about sustainability without speaking about airspace modernization. It's not a new topic. It is something which needs to urgently be tackled. And the UK aviation minister acknowledged that today. One thing that I heard that's new is you're looking to get a new angle on this through Eurocontrol potentially.

Johan Lundgren:

Well, so basically we have said we believe there should be a bigger mandate for Eurocontrol because they are the central body. They could be the one who are in more control of the corridors and the design of this. This has to start up with a cooperation and it has to have the acceptance and the approval and the push from the member states. This is the key thing. Right now, we have an unacceptable situation where a few member states can say no to these things. They don't want to give away what they call the sovereignty. They want to be in charge, in complete control of the airspace, which I think is such a hollow argument these days because it has been related to the public and to ourselves. So we need that for security reasons, national security, military reasons.

But I think one thing is that the war between Russia and Ukraine has shown us that when NATO wants airspace, they will take it within minutes. We can get a heads-up and notifications within five minutes that you can't fly in these places. So there is zero, zero excuse to say that we can't do this. So this has been a political thing where people are mindful, I think, about job opportunities in certain jurisdictions and they don't want to see that to go into central body as well. And that argument isn't good enough. It is so small in the scheme of things of what is at stake here.

So one of the things that we announced today was this study we've done, which is one of the more detailed studies that showed that if European aviation were able to implement SES2+ to the Single European Sky as it is there—and it's there ready to go—there would be an 18 million [ton] savings in terms of CO2 emissions, 18 million tons. In our case, it's 10% of whatever we do, and we are fighting for grams here. And that is up to decision makers across Europe to actually get together to work on.

And what I was very pleased with was the aviation minister here in the UK who's very determined to say that, and, in all fairness, the new government here and the Labour Party was the only party in the UK who actually had this in their manifesto that they wanted to reform the airspace. And they have. This work has already started, but the key thing is to get the London area sorted out. But I think that the minister was very determined that that's going to happen. And that's the thing that I'm getting from the government. But that needs to happen in Europe, in France, in Germany, in Italy, in Spain and across Northern Europe as well.

Victoria Moores:

Because I imagine the vast majority of easyJet's operation isn't in UK airspace. It's in European airspace.

Johan Lundgren:

Well, touching, if you think about touching, it's actually over 50% that is UK. But of course, it's not just the fact that you fly out there, it's also coming in when you get affected by the airspace. And UK and the other airspace certainly has many, many things to do as well. So you need the ANSPs to come together, together with also then designing this with the local airports because local airports would take care of certain parts of the airspace and ANSPs of the other parts of the airspace. But we would argue that Eurocontrol would be in the best position to get a stronger mandate for this.

Victoria Moores:

How likely are we to see action and that mandate from Eurocontrol?

Johan Lundgren:

You know what, I think so. I think the argument is now so overwhelming, and in the end, politicians can't stand up through their constituencies and to the voters to ignore this anymore. And that's why we want to bring it to the table and get it out there to consumers and to the audience that, look, we're talking about big, big things here that actually can make a significant difference on a plan that can be launched tomorrow.

Victoria Moores:

It is a huge saving. And the UK aviation minister, he gave a really lovely tribute to the work that you've done at easyJet. He described you as a "tour de force" for aviation sustainability. Of course, he was making those comments because you're stepping down from your role early next year. The CEO of easyJet will be the current chief financial officer who's Kenton Jarvis. And I'm wondering, reflecting on that transition, is there any guidance or advice that you wish that you've known when you became CEO of easyJet that you can pass on to Kenton?

Johan Lundgren:

Oh, that I wish that I would've known when I become CEO. First of all, I don't think Kenton needs my advice. I mean, he's well-versed. He's a brilliant leader and he knows the company in depth, and he'll be fantastic for the company. But the question that I wish I would've know when I started? I don't know. I don't think there is. Being CEO of easyJet, I was saying that to somebody else that even on a really bad day, it's an amazing privilege. The purpose of the company to democratize travel, and you can feel that you are a force for good. Millions of people rely on easyJet on the day-to-day commute. Millions of people save up years to fly with us to go on their long-awaited holidays. The single parent who will see their child somewhere, you can connect them with affordable fare. It's a sensational great feeling to be able to partner that experience. And consumers will give you a lot of credit when you get it right. And also on occasion when this gets wrong, even if it doesn't sit within your control.

So it's a company and it's a business where a lot of people have a lot of opinions about, and thank God the majority is really grateful for what we're doing. And to be part of that journey and to be part of that company is amazing. But I don't think there was anything that I thought that, oh God, I wish I would've known that before. No, no. But it's been seven intensive years with COVID and everything as well.

Victoria Moores:

I imagine knowing that a pandemic was coming would've been helpful, but maybe not.

Johan Lundgren:

Yeah, no, I know. Look, it's something you never want to see again. I mean mostly from a humanitarian point of view as well. But obviously having an airline that is grounded for weeks and weeks and weeks and seeing millions of money pouring out of the company isn't that great. But the company came out stronger than most. We have net cash position, which some competitors would only dream of to be in that place. And we transformed the revenue capabilities, the network setup. We launched a holiday business that's extraordinarily successful. The work we're doing here on the roadmap, it's just a fantastic thing to be part of. I would've taken this job at any point in time, even if I knew that the pandemic was coming.

Victoria Moores:

There's a testimony for Kenton for his tough days to know that it's definitely worthwhile.

Johan Lundgren:

Exactly.

Victoria Moores:

That's all we've got time for today. But thank you very much for joining us for today's podcast and also thinking that this may be the last one that we do with you. Who knows? But if we don't sit you on the podcast again, good luck in whatever comes next for you.

Johan Lundgren:

Thank you, Victoria.

Victoria Moores:

So thank you to Johan and also thank you to our producers, Cory Hitt and Guy Ferneyhough, and of course, a very big thank you to you, our listeners. As always, please make sure that you don't miss our weekly recordings by signing up wherever you listen. So until next time, this is Victoria Moores disembarking from Window Seat.