Late last week on our ESG Safeguard platform, several Aerospace and Airline companies surfaced in the Top Movers feature, prompting us to take a closer look at the industry. Through our analysis we found Airbus exploring hydrogen planes and some antitrust sentiment for American Airlines and JetBlue.

By
Sam Leavitt
|
September 24, 2021

ESG Spotlight: Airbus—Flying High on Hydrogen or is it Hot Air?

Article
ESG Spotlight: Airbus—Flying High on Hydrogen or is it Hot Air?

The end of last week had Several Aerospace and Airline companies surface as Top Movers, the latest feature in our ESG Safeguard platform. Air New Zealand (AIR:NZ) and Airbus (AIR:NL) signed a memorandum of understanding to explore the impact of hydrogen planes in the Air New Zealand fleet last week. Airbus hopes to bring a hydrogen plane to market by 2035, which many in the industry view as a major challenge. This would require significant research and development as well as partnerships with airlines who would be willing to pilot this kind of vessel.

ESG Safeguard Platform: Airlines and Aerospace, Past 7 Days

Hydrogen is a technology still in its infancy and companies are showing, once again, that they can dream big when it comes to this concept. Hydrogen started to develop as fuel cell technology for large vehicles like trucks, trains and boats; but use for aircraft is still largely unexplored. While other efforts in the space are largely centered around electric battery engine technology and lower carbon fuels such as biofuel, hydrogen hasn’t had much use in the industry. New Zealand Air is not the only airline interested in this technology. If Airbus can make good on a prototype, it could be potentially groundbreaking. Currently airlines account for 2.5 percent of emissions globally, and companies are scouring the globe for solutions to drive that number down. A hydrogen powered plane charged by renewable energy seems like a sure-fire way to do that, if Airbus can make good on its lofty goals.

ESG Safeguard Platform: Greenwashing in Airlines and Aerospace, Past 365 Days

This should be taken with a grain of salt. From looking at Airbus’s Greenwashing Differential, they score more negatively than their industry peers. Time will tell if this initiative is for real or just hot air. It would be great to see Airbus implement additional action items and transparent goals around this hydrogen development initiative.

Antitrust Sentiment Hits Airlines

However, not all is rosy in the sector as American Airlines (AAL) and JetBlue (JBLU) landed in hot water. The two airlines are being sued on antitrust issues and the states involved are citing an alliance between the two airlines to coordinate flights in the northeastern United States. This has implications for other airlines to stay away from cooperating with one another as antitrust sentiment hits the business. Typically we have seen these types of lawsuits target large tech companies, but it seems that no one is immune to regulators and local politicians when it comes to anti-competitive behavior.

External Catalyst of Change

Last time we covered the industry in February, change was driven by the airlines themselves, in this case it is a major manufacturer that is the catalyst for change. 

The main focus this week is the exciting goal Airbus has arrived at to bring a hydrogen plane to market by 2035. They already have a few airlines cooperating with them on feasibility for fleet operations, and it will be exciting to see what comes next as they work toward that deadline.

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Watch Our Latest ESG Webinar: Climate Week 2021 Recap

Watch our follow-up to Climate Week webinar where we put theory into practice leveraging our new Materiality analysis to debrief Climate Week 2021. We addressed who might be greenwashing, reviewed the positive narratives from the last 12 months, and discussed who spoke to noteworthy commitments, investments, or milestones in this year’s event. We were joined again with special guest Jean Rogers, Founder of the Sustainability Accounting Standards Board (SASB) and one of the world’s leading ESG experts.

About Amenity

Amenity Analytics is the industry leader in providing insights from unstructured text by using Natural Language Processing (NLP) assisted by Artificial Intelligence (AI) and Machine Learning (ML). Amenity’s NLP system is a sector-agnostic, language-dependent tool for quantitative text analysis that is deployed across the financial services industry and beyond.

This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.

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