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Planet

Fuel Efficiency and Greenhouse Gas Emissions

Jet fuel is our largest energy source. As a result, it is one of our largest expenses and our single greatest source of emissions. We are always looking for opportunities to increase fuel efficiency and lower our greenhouse gas emissions.

Fuel Efficiency

Because of the direct relationship between our fuel consumption and the cost associated with that consumption, we are self-motivated in the pursuit of multiple fuel efficiency initiatives. These initiatives help us to minimize fuel consumption and emissions, as well as maintain a low-cost advantage in the airline industry. Since 2002, Southwest has invested more than $630 million in fuel efficiency improvements, excluding new aircraft purchases. These initiatives include routinely performing engine washes, utilizing ground electric power while aircraft are parked at airport gates, and reducing ground idle speeds for aircraft in our fleet.

While we continued to invest in fuel efficiency improvements, in March 2019, we were required to remove the Boeing 737 MAX, our most fuel-efficient aircraft, from service. On Nov. 18, 2020, the Federal Aviation Administration (FAA) issued official requirements to enable airlines to return the MAX to service. We satisfied applicable FAA requirements by modifying certain operating procedures, implementing enhanced Pilot training requirements, installing FAA-approved flight control software updates, and completing other required maintenance tasks specific to the MAX aircraft. Following more than 200 readiness flights completed over several months, the MAX was returned to revenue service on March 11, 2021. The MAX 8 aircraft are 14% more fuel-efficient than our 737-800 aircraft, and their return to service is a welcome addition to our efforts to operate efficiently. Southwest is investing over $12 billion in firm aircraft orders for the Boeing 737 MAX to improve fuel efficiency and reduce carbon emissions.

In 2020, we experienced a year-over-year fuel efficiency improvement of 7.4% when measured in available seat miles (ASMs)6868) An available seat mile (ASM) is one seat (empty or full) flown one mile. Also referred to as “capacity,” which is a measure of the space available to carry Passengers in a given period. per gallon of jet fuel consumed. This improvement was in part the result of operating fewer of our oldest least fuel-efficient aircraft as a result of capacity reductions due to the COVID-19 pandemic. In our One Report we have historically reported our fuel efficiency on a revenue ton mile (RTM)6969) A revenue ton mile (RTM) is one ton of revenue traffic (Passenger and cargo) transported one mile. RTM calculation methodology has been updated to align with the methodology suggested by the International Civil Aviation Organization (ICAO). RTMs for 2016 through 2019 have been restated to reflect the updated methodology. per gallon of jet fuel consumed basis. The RTMs/gallon efficiency metric relies on both the efficiency of our fleet and the revenue traffic carried. The COVID-19 pandemic depressed the demand for air travel, and we experienced load factors7070) Passenger load factor is RPMs 34 divided by ASMs 26 . that were considerably lower than historical levels. As travel demand returns to pre-pandemic levels, our fuel efficiency measured on a RTMs/gallon basis will improve.7171) The 2020 Southwest Airlines One Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company’s environmental sustainability beliefs, plans, and expectations; (ii) the Company’s plans, goals, objectives, and initiatives related to diversity, equity, and inclusion; (iii) the Company’s plans and expectations with respect to Employee training, development, benefits, (including post-retirement benefits) pay, and staffing (including with respect to avoiding furloughs or pay cuts); (iv) the Company’s Vision; (v) the Company’s network plans, expectations, and opportunities, including factors and assumptions underlying the Company’s plans and expectations; (vi) the Company’s initiatives and related goals with respect to global distribution system access and related alliances and capabilities; (vii) the Company’s financial position, outlook, plans, strategies, goals, targets, and projected results of operations; (viii) the Company’s fleet plans and expectations; and (ix) the Company’s initiatives and expectations with respect to fuel efficiency and emissions. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the extent of the COVID-19 pandemic, including the duration, spread, severity, and any recurrence of the COVID-19 pandemic, including through any new variant strains of the underlying virus; the effectiveness and availability of vaccines; the duration and scope of related government orders and restrictions; the duration and scope of the Company’s actions to address Customer and Employee health concerns; the extent of the impact of the COVID-19 pandemic on overall demand for air travel and the Company’s related business plans and decisions; and any negative impact of the COVID-19 pandemic on the Company’s access to capital; (ii) the impact of fears or actual outbreaks of other diseases, economic conditions, fuel prices, extreme or severe weather and natural disasters, fears of terrorism or war, actions of competitors, consumer perception, and other factors beyond the Company's control, on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results; (iii) the impact of governmental actions and governmental regulations on the Company’s plans, strategies, and operations; (iv) the Company's dependence on Boeing with respect to the Company's fleet order book and delivery schedule; (v) the Company’s dependence on other third parties for products and services, in particular with respect to global distributions systems and related alliances and capabilities, and the impact on the Company’s operations and results of operations of any third party delays or non-performance; (vi) the Company’s ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (vii) the impact of labor matters on the Company’s result of operations, business decisions, plans, and strategies; and (viii) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2020.

 

Greenhouse Gas Emissions

To better understand our environmental impact and increase the transparency of our operations, we have voluntarily tracked and reported our greenhouse gas (GHG) emissions since 2009.

Our primary source of GHG emissions is the consumption of jet fuel. Total GHG emissions from our aircraft declined in 2020 compared with 2019, primarily due to reduced capacity in response to the effects of the COVID-19 pandemic. Additionally, emissions intensity per ASM7272) An available seat mile (ASM) is one seat (empty or full) flown one mile. Also referred to as “capacity,” which is a measure of the space available to carry Passengers in a given period. improved in 2020, primarily as a result of operating fewer of our oldest less fuel-efficient aircraft due to capacity reductions along with lower load factors7373) Passenger load factor is RPMs 34 divided by ASMs 26 . resulting from the COVID-19 pandemic. Significantly lower load factors due to COVID-19 led to a substantial increase in our emissions per revenue passenger mile (RPM)7474) A revenue passenger mile (RPM) is one paying Passenger flown one mile. Also referred to as “traffic,” which is a measure of demand for a given period. and revenue ton mile (RTM)7575) A revenue ton mile (RTM) is one ton of revenue traffic (Passenger and cargo) transported one mile. RTM calculation methodology has been updated to align with the methodology suggested by the International Civil Aviation Organization (ICAO). RTMs for 2016 through 2019 have been restated to reflect the updated methodology. . As travel demand returns toward pre-pandemic levels, our emissions intensity metrics are expected to improve.7676) The 2020 Southwest Airlines One Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company’s environmental sustainability beliefs, plans, and expectations; (ii) the Company’s plans, goals, objectives, and initiatives related to diversity, equity, and inclusion; (iii) the Company’s plans and expectations with respect to Employee training, development, benefits, (including post-retirement benefits) pay, and staffing (including with respect to avoiding furloughs or pay cuts); (iv) the Company’s Vision; (v) the Company’s network plans, expectations, and opportunities, including factors and assumptions underlying the Company’s plans and expectations; (vi) the Company’s initiatives and related goals with respect to global distribution system access and related alliances and capabilities; (vii) the Company’s financial position, outlook, plans, strategies, goals, targets, and projected results of operations; (viii) the Company’s fleet plans and expectations; and (ix) the Company’s initiatives and expectations with respect to fuel efficiency and emissions. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the extent of the COVID-19 pandemic, including the duration, spread, severity, and any recurrence of the COVID-19 pandemic, including through any new variant strains of the underlying virus; the effectiveness and availability of vaccines; the duration and scope of related government orders and restrictions; the duration and scope of the Company’s actions to address Customer and Employee health concerns; the extent of the impact of the COVID-19 pandemic on overall demand for air travel and the Company’s related business plans and decisions; and any negative impact of the COVID-19 pandemic on the Company’s access to capital; (ii) the impact of fears or actual outbreaks of other diseases, economic conditions, fuel prices, extreme or severe weather and natural disasters, fears of terrorism or war, actions of competitors, consumer perception, and other factors beyond the Company's control, on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results; (iii) the impact of governmental actions and governmental regulations on the Company’s plans, strategies, and operations; (iv) the Company's dependence on Boeing with respect to the Company's fleet order book and delivery schedule; (v) the Company’s dependence on other third parties for products and services, in particular with respect to global distributions systems and related alliances and capabilities, and the impact on the Company’s operations and results of operations of any third party delays or non-performance; (vi) the Company’s ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (vii) the impact of labor matters on the Company’s result of operations, business decisions, plans, and strategies; and (viii) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2020.

With many of our Corporate Campus-based Employees working remotely due to COVID-19, energy consumption at our campus was lower in 2020. This change in work location resulted in lower emissions from our electricity and natural gas consumption.

See Footnotes: 7777) Scope 2 emissions are reported as locationbased emissions per GHG Protocol Corporate Standard., 7878) A revenue passenger mile (RPM) is one paying Passenger flown one mile. Also referred to as “traffic,” which is a measure of demand for a given period., 7979) A revenue ton mile (RTM) is one ton of revenue traffic (Passenger and cargo) transported one mile. RTM calculation methodology has been updated to align with the methodology suggested by the International Civil Aviation Organization (ICAO). RTMs for 2016 through 2019 have been restated to reflect the updated methodology. , 8080) An available seat mile (ASM) is one seat (empty or full) flown one mile. Also referred to as “capacity,” which is a measure of the space available to carry Passengers in a given period.


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