Sustainable development analysis of iberia

Iberia
Sustainable Development Term Paper

Introduction

In this term paper I am going to analyse the sustainability of Iberia airline company. I will use Iberia as example, not only for the fact that Iberia is the flag carrier and main airline in Spain, but because of Iberia's commitment with sustainability, recognised by the “SAM Gold Class” title in the SAM 2011 Sustainability Yearbook.Sustainable Asset Management (SAM), is an international investment firm focused on sustainable investments that annually assesses more than 2000 of the world's largest companies in order to determine their sustainability level for the Dow Jones Index. Nevertheless, airlines have further problems of sustainability compared to other sectors, especially bearing in mind economic and environmentalsustainability.

It goes without saying that during past decades airline companies are struggling to produce enough and sustainable economic profits for their shareholders (or at least some profit). Furthermore taking into account environmental sustainability it is important to mention that aircraft travel is usually much more carbon pollutant per passenger than any other type of transport. Thesefacts make airline sector a much more interesting case to study to analyse the sustainable conscience of such a leader as Iberia is in the sector.

First approach into the company

Iberia was founded in 1927, and actually owns 169 aircrafts covering 108 destinations worldwide (181 taking into account shared code flights) with over 1000 daily flights. During 2010 Iberia airline services were usedby 24 million passengers, aiming to be the fourth biggest European airline in number of passengers. During this year Iberia transported 262000 tons of load around the globe. The recent merger in 2010 with British Airways, creating International Airlines Group (IAG), will result in the third biggest airline worldwide in terms of profit.

To get a better insight into Iberia in Table 1, there isa summary of all the fleet that Iberia owns, and the future orders they have already signed. An important feature that Iberia has is that the average age of their aircrafts is around 8,1 years, much younger than other rivals in the sector.

Aircraft | Units | Orders | Routes | Capacity (Business / Economy) | Used since |
Airbus 319-100 | 23 | 3 |Short-med range | 132 (0/132), 122 (14/108) | 2000 |
Airbus 320-200 | 35 | 12 | Short-med range | 153 (0/153) | 1993 |
Airbus 321-200 | 19 | 0 | Short-med range | 200 (46/154) | 1998 |
Airbus 330-300 | 0 | 16 | Long range | 277 (36/241) | 2012 |
Airbus 340-300 | 18 | 0 | Very long range | 254(36/218) | 1996 |
Airbus 340-600 | 18 | 0 | Very long range | 342 (42/300) | 2003 |
Total | 120 | 31 | | | |
Table 1: Iberia Airlines Fleet (Iberia Annual Report, 2010)

Iberia is also well known as one of the biggest aeronautic maintenance firms, not only doing the maintenance of its fleet but for other 200 companies that outsource thisvital service to Iberia. It maintenance work is approved by all major regulators and manufacturers, working from its headquarters in La Muñoza, near Madrid Barajas airport.

Social sustainability

Because of its early stage of government owned company (until 1999), Iberia has always been involved in activities benefitting society and its stakeholders. Because of its aircrafts travelling aroundthe globe especially between Europe and Latin America, Iberia is able to get a first person approach to social problems, especially in LatAm where most societies aren't enough developed, but also helping minor groups of societies in Europe.

The main activities in this purpose are:

Presence in Organisations and institutions, working hand to hand with recognised NGOS as the Red Cross,...