The cost of raw materials, such as fossil fuels, has significantly increased in the last decade, contributing to transitional risks for airlines.
Changing customer behavior, including less frequent flying and using alternative modes of transportation, poses a risk to airlines as customers prioritize sustainability and carbon footprint.
Airlines face enhanced emissions and climate reporting obligations, including caps on carbon emissions and the need to report emissions data, aligning with global efforts to reduce greenhouse gas emissions.
Two decades ago, there was hardly any talk about carbon emissions, particularly those related to commercial aviation. However, the growing need to minimize carbon footprints has changed a lot for commercial operators. From market variability and regulatory actions to customer behavior and operators’ reputations, airlines face climate-related transitional risks.

Simple Flying highlights a few transitional risks affecting airlines, as discussed in Southwest Airlines’ One Report.