Carbon

Air transport is essential to New Zealand's trade, exports, investment and tourism industries and plays a critical role connecting our people to the world, and the world to us.

These benefits are, however, counterweighed by the aviation industry's significant climate change impact, with the global sector contributing 2% to 4% of global emissions.

Carbon management

We recognise our operations have a significant carbon footprint and have many initiatives to reduce our impact.

We are a member of the International Air Transport Association (IATA) and have committed to its targets on fuel efficiency and carbon emissions, being:

• 1.5% average annual fuel efficiency improvement between 2010 and 2020
• Carbon neutral growth from 2020
• A reduction of 50% in net emissions by 2050 compared to 2005 levels

Find out more about our carbon management in our 2019 Sustainability Report.

Our fleet

One of the most significant ways to reduce emissions is by operating a modern and efficient fleet. In May 2019, we committed to purchasing eight Boeing 787-10 Dreamliners to replace our Boeing 777-200 fleet. The first of these will arrive in the 2023 financial year and are expected to be up to 25% more fuel-efficient than the aircraft they are replacing. By the end of June 2019, we had also taken delivery of five Airbus A321NEO and three A320NEO aircraft - these are expected to deliver fuel savings of at least 15% compared to the aircraft they are replacing.

As at 30 June 2019, our fleet has an average seat-weighted age of 7.1 years, down from 7.5 years at 30 June 2018.

Fuel efficiency and carbon reduction programme

Air New Zealand is one of New Zealand's largest carbon emitters. In 2019 our carbon footprint (greenhouse gas emissions) increased by 5.2%, primarily due to an increase in Air New Zealand's network capacity and temporary fleet substitutions as a result of the Rolls-Royce engine issues.

In 2016, we engaged an independent IATA Operational Efficiency team to conduct an on-site review of our operations, benchmarking our performance against carbon management international best practice.

The average airline carbon reduction measures identified by IATA are 5%. The savings identified for Air New Zealand were much less at 1.46% (approximately 37,000 tonnes of carbon emissions per annum), which indicates that we are well on the way towards world leading fuel efficiency improvements.

In 2016, we launched a Carbon Reduction Programme that will enable us to realise further carbon savings.

Recognising significant fuel savings can be made through route optimisation and tailored arrivals and departures, we now engage with external stakeholders including the Civil Aviation Authority and Airways New Zealand as part of our Carbon Reduction Programme to help drive industry wide initiatives. Senior members of Air New Zealand and Airways New Zealand oversee the programme to ensure initiatives are on track.

Offsetting with Air New Zealand's FlyNeutral carbon offset programme

In addition to the carbon reduction strategies and programmes outlined above, we also offer the ability for our customers to offset their Air New Zealand flights under our FlyNeutral carbon offset programme.

FlyNeutral makes offsetting easier to understand for all our customers. For our business customers, we have also made understanding, reporting and offsetting air travel-related carbon emissions more efficient, transparent and flexible.

To learn more about FlyNeutral and how you can offset your flight-related travel emissions with Air New Zealand, see FlyNeutral.

At Air New Zealand, we voluntarily offset the carbon emissions associated with our staff travelling for work on the Air New Zealand network. Join us and offset your Air New Zealand flights with FlyNeutral.

FlyNeutral operates separately to the New Zealand Emissions Trading Scheme. Funds received from customers for offsetting under the FlyNeutral programme do not go towards our compliance costs associated with the New Zealand Emissions Trading Scheme - all funds go towards the purchase of additional certified carbon credits. We comply with our obligations under that scheme and manage all compliance requirements at our cost.

Operational initiatives

Aviation fuel efficiency is the most significant way we can currently reduce our carbon footprint, far outweighing other factors such as ground fleet fuel use and stationary energy reductions. However, we are also committed to reducing our environmental impact at every level of our operations. This includes ground services emissions encompassing transport, buildings and waste management.

• Electricity: We continue to reduce electricity consumption across all areas of our New Zealand business operations. To 30 June 2019, we have reduced electricity consumption across our New Zealand ground operations by 46% since 2011. Our chosen New Zealand electricity provider's generation portfolio is based entirely on renewable sources.
• Inflight waste: Following collaboration with our major caterer LSG Skychefs and the Ministry for Primary Industries (MPI), some 40 types of untouched and unopened inflight product that were previously sent to landfill, are now being retrieved and put back into circulation. To date, more than 280 tonnes of product have been reinjected into our network.

• Electric vehicles: We aim to lead the way on the ground by operating one of New Zealand's most technologically advanced, renewably powered electric ground fleets. We've converted to 92% electric vehicles where options exist - of our 85 on-road light vehicles, 78 are electric. We are also progressively transitioning our ground service equipment (GSE) such as aircraft tugs and loaders to electric. At 30 June 2019, 62% of GSEs are electric.