Climate Change Data

Southwest Airlines Co.

Climate Impact & Sustainability Data (2015, 2023)

Reporting Period: 2015

Environmental Metrics

Environmental Achievements

  • Installation of blended winglets on all Boeing 737-700 and 737-800 aircraft and a majority of 737-300 aircraft, reducing drag and increasing fuel efficiency.
  • Upgrading of the Company’s 737-800 fleet with newly designed, split scimitar winglets.
  • Conducted over 23,000 RNP approaches, including approximately 5,000 in 2015, improving flight efficiency and reducing fuel consumption.

Social Achievements

  • Record Employee ProfitSharing expense of $620 million.
  • Named to FORTUNE’s list of World’s Most Admired Companies for the 22nd consecutive year.

Governance Achievements

  • Upgrade to Baa1 with Moody’s Investor Service and an upgrade to BBB+ with Fitch Ratings.

Climate Goals & Targets

Long-term Goals:
  • Become the world’s most loved, most flown, and most profitable airline.
Short-term Goals:
  • Grow earnings; meet or beat 2015’s record ROIC; and continue to improve Reliability and Hospitality.

Environmental Challenges

  • High and/or volatile fuel prices.
  • Limited control over fuel and labor costs.
  • Increased labor costs negatively impacting low-cost competitive position.
  • Heavy regulation increasing regulatory compliance costs.
  • Intense competition within the airline industry.
  • Dependence on single aircraft and engine suppliers.
  • Security concerns and related cost burdens.
  • Airport capacity constraints and air traffic control inefficiencies.
  • Potential for significant future impairment charges related to goodwill.
Mitigation Strategies
  • Utilizing over-the-counter fuel derivative instruments to hedge a portion of future jet fuel purchases.
  • Fleet modernization to reduce fuel consumption and improve efficiency.
  • Participation in Required Navigation Performance (RNP) operations to conserve fuel.
  • Aggressive marketing of Southwest’s points of differentiation from competitors (e.g., bags fly free, no change fees).
  • Investments in technology improvements to support ongoing operations and initiatives.
  • Maintaining positive relationships with employees and employee representatives.
  • Proactive cancellation of government-provided war-risk insurance coverage and purchase of comparable commercial coverage.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

  • FORTUNE’s list of World’s Most Admired Companies

Reporting Period: 2023

Environmental Metrics

ESG Focus Areas

  • Climate Change

Environmental Achievements

  • Successful SAF tax credit/incentive legislation in Colorado, Illinois, and Minnesota in 2023.
  • Actively engaged with policymakers to support the federal government’s ambition for three billion gallons of SAF by 2030.
  • Developed a robust SAF policy to guide our procurement of high-quality SAF.
  • Considering indirect emissions in the life cycle assessment (LCA) of SAF.
  • Supporting federal agencies working to develop a modified GREET model.
  • Lobbying for funding for the FAA's CLEEN Program and ASCENT.
  • Working with the FAA to expedite the implementation of Next Generation Air Traffic Control procedures.

Climate Goals & Targets

Long-term Goals:
  • Achieve net zero carbon emissions by 2050
  • Reduce our carbon emissions intensity 50% by 2035 (compared with 2019)
  • Save 1.1 billion cumulative gallons of jet fuel by 2035
  • Reduce energy utilization index at our Dallas headquarters by 50% by 2035 (relative to a 2022 baseline)
Medium-term Goals:
  • Reduce our carbon emissions intensity 25% by 2030 (compared with 2019)
  • Replace 10% of our total jet fuel consumption with SAF by 2030
  • Electrify 50% of eligible ground support equipment (GSE) system-wide by 2030
  • Reduce single-use plastics from in-flight service where feasible by 2030
Short-term Goals:
  • Save 50 million incremental gallons of jet fuel by 2025
  • Reduce single-use plastics from in-flight service by 50% by weight by 2025

Environmental Challenges

  • High cost of SAF making it cost-prohibitive for airlines.
  • Need for government assistance to enable greater advances related to air traffic control modernization; new, more fuel-efficient aircraft and electric ground support equipment; and the scaling-up and deployment of SAF.
Mitigation Strategies
  • Advocating for governmental policies and programs that support more fuel-efficient flying and the use of SAF.
  • Actively supporting government programs and opportunities to create additional tax incentives for SAF production.
  • Working with various coalitions and organizations to advocate for policies that promote SAF production and utilization.

Supply Chain Management

Responsible Procurement
  • Developing a robust SAF policy to guide our procurement of high-quality SAF

Climate-Related Risks & Opportunities

Opportunities
  • Development and utilization of SAF

Reporting Standards

Frameworks Used: Paris Agreement, CORSIA

UN Sustainable Development Goals

  • Goal 13 (Climate Action)

Initiatives contribute to reducing GHG emissions and transitioning to a net-zero future.