CSR reporting of the European low-cost and full-service carriers: a qualitative content analysis

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CSR reporting of the European low-cost and

full-service carriers: a qualitative content

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Abstract

The focus of this study was to qualitatively analyse the disclosures of corporate social responsibility (CSR) practices by the growing low-costs carriers (LCCs) and the established full-service carriers (FSCs) within the commercial European passenger aviation industry, in order to ascertain the levels of implementation of socially responsible behaviour as reported by the carriers with varying business models. To achieve this, the study used a comparative research design and a qualitative content analysis of airlines’ multiple CSR disclosures. Mostly in line with expectations, the study revealed generally low levels of CSR adoption among carriers, with LCCs reporting less extensively on their CSR practices than FSCs in terms of both the amount of reporting as well as content-wise. The study also found that all carriers address individual dimensions of CSR to an unequal extent in their disclosures, with the most attention paid to the social dimension of CSR.

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Acknowledgment

I would like to express my deep gratitude to my supervisor Dr. Gjalt de Jong for his support and guidance through the process of writing this thesis. His professional approach and provided feedback throughout the research project were both very helpful and greatly enhanced my learning experience.

Groningen, 11th of May 2016

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1. Introduction

In the current era of globalization, civil aviation plays an important role in people’s everyday lives. As businesses are being established globally across borders, the need for air travel is evident. Thanks to its ability to reach faraway destinations in only matters of hours, travelling by plane became popular for both business and leisure travellers. Recent growth in civil aviation industry reported by International Air Transport Association shows that the industry has more than doubled in the past decade, from US$369 billion to US$746 billion. This growth has been mainly driven by low-cost carriers (LCCs), which are now estimated to control about 25% of the worldwide market (Clayton & Hilz, 2015). After the deregulation of the aviation industry, the entrance of LCCs significantly increased the competition in the industry, previously mostly dominated by full-service carriers (FSCs). This is observed mainly on regional routes, such as within Europe, as the low-cost model is currently being primarily applied on short-haul regional or what are being termed point-to-point routes. However, recently, attempts to enter even long-haul flights market by LCCs are increasingly being observed. Overall, LCCs appear to influence the industry greatly, often forcing FSCs to adjust their operations in many aspects.

In the past, companies did not pay too much attention to sustainability or society at large and businesses operated basically as long as they covered the first two stages in Carroll’s (1991) pyramid of Corporate Social Responsibility (CSR) – being profitable and respecting the law. This meant that firms were not held accountable for using public goods such as polluting the air or water as a result of their operations. Despite there still not being uniformly enforced legal obligations for companies to internalise these externalities, things are gradually changing now and some companies are increasingly becoming aware of them, progressing towards the top of the Carroll’s pyramid while engaging in sustainability and CSR efforts or at least claiming to do so.

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regulation exceed those imposed by policymakers, and thus call for greater firms’ self-regulation (Muller, 2006; Kolk, 2007). This is giving rise to and stresses the importance of sustainability and/or CSR efforts and policies, which go beyond what is formally required by law. Such accounts of CSR are reported in and made know to public through various ways and often only voluntary communications such as sections in corporate annual reports, separate CSR reports, or dedicated CSR websites.

Notwithstanding, as the airline industry is growing, so are its impacts on the stakeholders, economy, environment, and society in general. With the ever increasing competition among LCCs and FSCs, airline industry is often characterized by slim profit margins, forcing carriers to focus on cost-reduction activities and developing alternative revenue generating strategies. LCCs, with their aggressive cost reducing no-frills strategies are especially efficient in this. Moreover, as shown in a study conducted by Mintel (2011), there is evidence that consumers are becoming increasingly conscious of ethical issues when making purchases and that they are interested in patronizing more sustainable products and services. This is also implied in the literature, which signifies that increasingly consumers expect companies to act in socially responsible ways and adjust their behaviours accordingly (Kolk, 2007; McIntosh, 2003; Juholin, 2004). These expectations are sometimes being stressed especially in relation to the tourism industry due to its rapid growth in the past years with further growth expected. Because of its notable impact on tourism in general, environment and society, the airline sector, within the tourism industry, is under considerable pressure to implement socially responsible initiatives (Cowper-Smith & de Grosbois, 2011). This is despite statistics reporting that the aviation industry is responsible for only 2% of all CO2 emissions world-wide (ATAG, 2016). Nevertheless, consequently, Porter and Kramer’s (2006) claim that CSR has become a source of competitive advantage may prove especially relevant in the current competitive environment of the airline industry. Many studies have identified positive impacts that CSR could have on the firm’s performance (Wang et al., 2015). Among others these for example include, improvements in consumer satisfaction levels (Luo & Bhattacharya, 2006), fostering firm’s reputation (Brammer & Millington, 2005), and increased employee motivation (Stodder, 1998).

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bare minimum, and perhaps even with other airlines given the increasing competition and industry-wide cost-cutting strategies brought about by the slim profit margins and the introduction of the low-cost business model in aviation in general. Nevertheless, consumers’ demands must still be accounted for, and thus both LCCs and FSCs may not necessarily regard CSR as an optional extra but a prerequisite for competing successfully.

Given these facts, questions arise about how are CSR related practices and initiatives being addressed by individual airlines and what roles do different business models in the aviation industry play in relation to CSR. However, in the extant literature, there seems to be a dearth of research studies concerned with CSR and its reporting in the airline industry in general, thus the current levels of adoption of CSR practices in the aviation industry remain largely unexplored (Wang et al., 2014; Coles et. al, 2014; Kemp & Vinke, 2012; Cowper-Smith & de Grosbois, 2011). Therefore, the objectives of this study are:

 To analyse the current adoption of CSR initiatives in a largely neglected airline industry as reported by individual airlines;

 To compare the levels of adoption of CSR practices by airlines with varying business models of low-cost and full-service;

 To contribute to the research on CSR and sustainability in aviation industry, through a firm-based view of the three main dimensions of CSR – being environmental, economic, and social.

At all stages, the study will be generally guided by and seeking answers to the following main research question:

How and to what extent do LCCs and FSCs within the European commercial passenger aviation industry disclose CSR activities in their reporting?

In order to answer the main research question, the following sub-questions will be addressed: 1) What is CSR?

2) What are the perspectives of CSR and the possible reasons to engage in CSR initiatives?

3) How do LCC’s and FSC’s operating business models differ from one another? 4) How do LCCs and FSCs approach the disclosure of their CSR initiatives?

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2. Literature Review

2.1. Corporate Social Responsibility (CSR) and Sustainability

Defining the concept of CSR is an ambiguous task and often authors vary greatly in their definitions (Montiel, 2008; Dahlsrud, 2008). In addition, the term CSR is often used interchangeably with the term sustainability, and is also often known under different names, such as corporate sustainability, social responsibility, or corporate citizenship.

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engage in CSR. This indicates that it is rather difficult to pinpoint an exact definition of CSR which would be globally accepted.

However, this study will focus more on the particular content of CSR practices of the respective airlines studied. So rather than searching for only one all-encompassing CSR definition, it might be more useful to look for common patterns in most CSR definitions. Dahlsrud (2008) has identified five components underpinning most of them:

 The voluntary aspect of CSR initiatives;  Stakeholder engagement;

 Economic dimension;  Social dimension;

 Environmental dimension.

Carroll (1991) went further and developed a pyramid of corporate social responsibility, as depicted in Figure 1 in Appendix 1. In this pyramid, Carroll breaks down the concept of CSR into separate components. It starts from the premise that first business has its economic responsibilities that it needs to fulfil. Next, it needs to obey the law, which represents demarcation between acceptable and unacceptable behaviour in a society. Next level stands for doing business in an ethical way and to do what is right, in order to avoid or minimize harm to the environment and various stakeholders, such as consumers, employees, and etc. Finally, the last level expects business to be a good corporate citizen, meaning that it is expected to contribute financial and human resources to the community and to improve the quality of life. These components of Carroll’s CSR pyramid can be related to the three dimensions – economic, social, and environmental – as identified above by Dahlsrud (2008). These also match the concept of the triple-bottom line outlined further below.

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environment by redefining and reconsidering their strategies – with their new products, services and value chains embracing sustainability.

The concept of sustainability is broad and stands for many interrelated issues other than just global warming, recycling, or saving of the rainforests which are often perceived as the major issues in general public’s eyes when sustainability is mentioned. This implies that sustainability is often viewed as concerned with environmental issues only. Nevertheless, there are many different views on what it is and how it can be achieved. The idea of sustainability comes from the concept of sustainable development which was first introduced in the famous Brundtland Report from 1987 and further developed at the World's first Earth Summit in Rio in 1992 (Meakin, 1992). Subsequently, the concept of sustainable production and consumption was first introduced and recognized in the Johannesburg Plan of Implementation, which was adopted in 2002 at the World Summit on Sustainable Development (United Nations, 2002). It was recognized that in order to foster economic and social development, sustainable consumption and production, together with eradication of poverty and careful management of Earth’s natural resources, form one of the three overreaching objectives for sustainable development. In order to achieve such a sustainable development fundamental changes in the way societies produce and consume need to be introduced. The Johannesburg Plan of Implementation further called for all countries (especially developed which were meant to lead the way) to promote sustainable practices in both their production and consumption. Furthermore, it also appealed to governments, international organizations, the private sector, various societies, and all major groups to be proactive and take part in changing their patterns of unsustainable production and consumption patterns.

Overall, the concept of sustainability is being broadly defined as meeting the needs of the present without compromising the ability of future generations to meet their needs (Heizer & Render, 2013). Thus, the notion of sustainability takes into account the wide-scope environment in which the business operates and, similarly to CSR, embraces three main areas – economic, environmental, and social. This is often known as the concept of the triple-bottom line.

2.2. The Triple-Bottom Line

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airlines either talking about CSR or sustainability in their disclosures, and therefore, in this study, both concepts will be used interchangeably and the focus will be predominantly on the three dimensions of the triple-bottom line. In the business environment, the concept of the triple-bottom line often refers to sort of an overall business model relating to sustainability and/or CSR. Sometimes it is also known as the three Ps – being people, planet, and profit. The concept of the triple-bottom line was first introduced by John Elkington (1998), who argued, that in a complex business environment of the modern era, sustainable growth of a firm cannot be pursued through narrow and single-minded financial objectives. Rather he suggested that it is best achieved through following an integrated framework of economic, social and environmental goals and objectives – he called this the triple-bottom line (see Figure 2 in Appendix 1). In other words, the triple-bottom line is an abstract accounting framework that is concerned with and incorporates three dimensions of performance – economic, environmental, and social (The Economist, 2009). These dimensions are:

 The first one is the traditional measure of corporate profit—the “bottom line” of the profit and loss account;

 The second is the bottom line of a company's “people account”—a measure in some shape or form of how socially responsible an organisation has been throughout its operations (e.g. in relation to its employees, customers, communities, business partners, and other stakeholders);

 The third is the bottom line of the company's “planet account”—a measure of how environmentally responsible it has been.

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the particular business operates and to minimize its adverse impacts on it. Environmental dimension deals with for example materials, energy, water, biodiversity, emissions, waste, transport, supplier environmental assessment, and similar (Wilson, 2015).

According to Henriques and Richardson (2004) when the triple-bottom line of a particular firm is positive then it leads to an increase in the firm’s value, not only in its profitability but also in regard to its shareholder value. Similarly, its social and environmental capital is increased. Robèrt et al. (2012) argue that the triple-bottom line should be understood in a specific way – they argue that the framing or boundary conditions for success are composed of environmental and social sustainability dimensions. Firms should then follow an economic step-wise approach as a strategic element to earn more money from doing the right things. They see economic system as means which should be dealt with in order to arrive at a goal – in this case environmental and social sustainability.

Heizer and Render (2013) argue that sustainable policies and/or CSR could be implemented into every aspect of business or any organization. However, it is often said that in each firm it is mainly operations and supply-chain managers who have the critical role in a firm’s sustainability/CSR objectives. Therefore, it is up to them to ensure that such policies and objectives are implemented and followed in their firms or organizations in order to enable them to meet their obligations and improve the triple-bottom line. This claim is particularly interesting for this study as the main difference between LCCs and FSCs is their operational model. Nevertheless, it is marketing which communicates any organization’s CSR efforts to its consumers and public, thus it plays an important role there too and can be even misused, giving rise to the phenomenon of greenwashing.

2.3. Greenwashing

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in Rio de Janeiro in 1992, but the idea has existed in corporate context since the 1960s (Marciniak, 2009). According to the Greenwashing Index (2016), greenwashing means when an organization spends more time and resources claiming to be “green” through advertising and marketing than actually implementing concrete business practices that minimize environmental impact.

The problem in consumer’s perspective is the fact that it is quite difficult to know whether an organization is as “green” as it claims, which has already caused consumers to question corporate honesty. Environmentally aware consumers may become confused by companies that use greenwashing in their communications, and may not knowingly support such “greenwashing” companies, instead of the ones that are actually sustainable in their practises (Furlow, 2009). Even if some companies are genuinely concerned about the environmental issues, many companies use the ecological marketing or greenwashing to create a false image that meets the social expectations of consumers (Marciniak, 2009).

2.4. Views of CSR

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order to further some social good. Some stakeholders want firms to engage in philanthropic activities on their behalf. This is mainly because large firms have lower transaction costs and are better positioned to engage in such activities than individual stakeholders would be alone themselves. In the third vision – insider-initiated corporate philanthropy – contrary to the second vision, the desire to engage in prosocial behaviour is not coming from stakeholders but is originating from within the firm itself. Here it is the firm management’s or board members’ own motivated decision to engage in CSR activities. This type of CSR engagement had been strongly criticized by for example Milton Friedman (1970) who held views that firms should not do charity with others’ money, and rather managers or board members should pursue such activities with their own personal funds. Related to this, Chin et al. (2013) conducted a research investigating how CEOs’ political ideologies and their personal values influence their decisions to engage in CSR. Their study confirms upper-echelon theory advocating that executives inject their personal biases into their strategic decision making. Chin et al. (2013) found that CEOs who are liberals are far more likely to pursue CSR, even regardless the recent financial performance of the firm. Whereas, CEOs who are conservatives with regard to their political ideology, will only pursue CSR if there is money to do so – arguably their view of CSR might be more in accordance with the first vision of CSR as described by Bénabou and Tirole (2010) above. Therefore, if conservative CEOs seek to primarily increase firm profits, they might engage in CSR more willingly should they see a profitable opportunity in doing so.

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focus on CSR and/or sustainability efforts and activities, in order to preserve their reputation and stay respected by their consumers all over the world (World Economic Forum, 2013). Similarly, there are calls for more explicit values and greater transparency, leading to the growth in firms’ social reporting. Bottom line is that there appears to be a relationship between CSR and firm’s performance and subsequent competitiveness, but the particular nature of this observed relationship remains somewhat unclear (Vilanova et al., 2008; Porter & Kramer, 2006).

2.5. Stakeholder Theory

Stakeholder theory is often discussed in relation to the social dimension of CSR, however, it also closely relates to the other two dimensions. The theory, developed by Freeman (1984), identifies and points to the array of different individuals, groups, and interests that affect the company or that the company is affecting by its actions. In its general sense, stakeholder theory holds that companies, recently increasing in size, and thus receiving greater levels of attention, are more than just individual entities concerned solely with themselves. On the contrary, the companies are playing an important role in their surrounding environment and society at large, and thus having obligations, responsibilities, and limitations on their actions. This implies that companies should not be concerned only with their shareholders, but widen their accountability to more actors in society – stakeholders – such as employees, customers, suppliers, various industry groupings, governments, local communities, and so on (Solomon, 2013; Wan-Jan, 2006). Freeman (1984) defines stakeholders as any group or individual which affects or is affected by the achievement of the organization’s objectives.

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these stakeholders, such as employees and shareholders, are categorized as internal to the firm, while communities, customers, suppliers and other business partners, on the other hand, are considered to be outside the firm itself, even though they might be considered important from a strategic point of view (Morrison, 2011). It has also been found that the intensity of stakeholder power has an influence on levels of CSR disclosures (Roberts, 1992). Furthermore, often conflicting interests are found among various stakeholders that pose significant challenges on the firm’s management, and consequently its CSR strategy. In addition, Mitchell et al. (1997) also argue that it is rarely possible to take into account every single stakeholder of a given firm, and therefore, the firms will always need to compromise and prioritize their stakeholders to a certain extent while interacting with them. Consequently, it can be expected that this will also have an impact on the content of CSR disclosures of individual firms.

2.6. Airline Business Models

The commercial passenger airline industry has evolved from a market setting formerly controlled by state-owned carriers and characterized by low levels of competition, to a more deregulated market, where multiple airlines with varying business models compete intensively. Today’s civil aviation market is characterized by slim profit margins and high competition, with airlines often recording significant losses (Cento, 2009). The literature identifies three main business models for airlines, which differ by their operational model characteristics and services offered to passengers (Lordan, 2014; Cento, 2009). These are:

 Full-service carrier (FSC);  Low-cost carrier (LCC);  Charter carrier (CC).

The focus of this study will be on FSCs and LCCs, which operate scheduled flights, rather than on CCs traditionally operating only charted flights. A brief outline of the main characteristics of the two business models follows.

2.6.1. Full Service Carriers (FSCs)

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first-class, and business class (DLR, 2008). In most of the European countries, FSCs have developed from what used to be the national flag carrier. Such examples of FSCs are Lufthansa, British Airways, KLM, Iberia, LOT or Scandinavian. Most of the former national carriers in Europe are now fully or almost fully privatized, but some countries still hold equity interests in their national carriers. Besides the former national carriers there are other independently owned FSCs, e.g. Virgin Atlantic, Air Europa, or Aegean Airlines (Cento, 2009). In Europe, FSCs represent around 55% of all flights (European Commission, 2013). Table 1 outlines key characteristics of the full-service business model.

Table 1 – Key characteristics of FSC business model

Concept/Focus Focus is on passengers, cargo and maintenance

Pricing strategy Complex yield management and price

discrimination pricing strategies

Network

- FSCs operate predominantly hub-and-spoke network – all destinations are linked to a main airport called the hub

- Both regional and global reach – FSCs operate short-, medium-, and long-haul flights, domestically, across regions, and even across continents

- Cooperation in airline alliances – in order to reach more destinations and develop a global network

Fleet Heterogeneous fleet varying in aircraft types

and sizes

Operations Multiple classes (e.g. economy, first, business)

Operating mainly primary airports

Sales channels

Use of multi-channel sales – selling via multiple distributional channels and systems such as sales agents and other intermediaries as well as directly

Source: Cento, 2009; DLR, 2008; Lordan, 2014 2.6.2. Low-Cost Carriers (LCCs)

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strategy. LCCs’ customers are “bargain seekers” with low switching costs, and thus offering low fares is paramount (Johnson et al., 2012). The low-cost airline business model is not homogenous though. For example, some LCCs operate predominantly main airports and try to target price sensitive business travellers (e.g. easyJet), whereas others focus on leisure travellers and operate predominantly cheaper secondary airports (e.g. Ryanair). Nevertheless, all LCC models are trying to achieve efficiencies through aggressive cost reductions in their operations (Wald et al., 2010). Table 2 outlines key characteristics of the low-cost business model.

Table 2 – Key characteristics of LCC business model

Concept/Focus

- Concept based on price elasticity of demand - Low fares appealing to price-conscious

customers - No-frills

- Competing with other means of transport such as trains and buses with low fares

Network Operating short-haul point-to-point routes

Additional revenues

Ancillary services (e.g. extra legroom, priority boarding, in-flight purchases, on-board

advertisement, etc.)

Operations

- Fast turn-around times and increased utilisation of aircrafts

- Operating secondary airports - High density single-class seating

Fleet

- Homogenous fleet of aircrafts

- The use of mainly new or young aircrafts (savings on maintenance and fuel as they are more efficient)

Sales channels Bypassing travel agents and selling directly to

customers

Source: CAPA, 2015; Morrell, 2008; Kloeg & Schaal, 2014; Amadeus (2014); Wald et al. (2010)

2.6.3. Growing Importance of LCCs

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This signifies the importance of the low-cost model in current and future aviation industry. So far though, LCCs’ growth has been achieved only on short-haul point-to-point routes within their regional operations. Nevertheless, in the current economic climate, with ever more price-conscious consumers, there undoubtedly is a growing market for an airline which would offer similarly low prices on long-haul routes, now being operated primarily by FSCs (Nanji, 2013). The idea of low-cost long-haul flights is not necessarily a new one. There have been attempts to develop such a type of routes in the past, but it has never reach fruition as most of them failed in their early stages (The Economist, 2014). Nonetheless, with the right mixture of expertise, innovation and advanced technology, this may soon become reality. This trend is increasingly visible with some European airlines, such as Norwegian and Wow Air, who slowly start to experiment with such types of routings. Similar endeavours are undertaken even by FSCs, who might want to follow the lead of their low-cost counterparts (Dastin, 2015). Such efforts are seen for example with Lufthansa, a premium full-service carrier, who wants to battle competition on the grounds of no-frills service. Recently, Lufthansa announced that it wants to launch a low-cost long-haul service airline under its brand and it could be in operation soon (Bryan & Maushagen, 2014). On the other hand, from the consumer’s perspective, what may be an acceptable offering by LCCs on short-haul flights may not be acceptable on long-haul flights (Whyte, 2011). In addition, LCCs are predicted to be presented with further opportunities over the next 10 years with the introduction of large numbers of new middle class travellers from emerging economies. This suggests a growing importance and impact of LCCs and the low-cost model in aviation industry in general.

2.7. Working Propositions

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separate CSR reports, and on corporate websites, in order to identify the prevalent CSR dimensions, themes, and initiatives employed by European LCCs and FSCs. The qualitative content analysis will address the individual CSR dimensions as depicted in the model presented in Figure 4 in Appendix 1.

Given the above discussion, it is expected that both FSCs and LCCs may weigh up the importance of CSR overall and its dimensions differently. Thus, the following propositions are formulated:

Proposition 1: The extent of CSR reporting will vary between LCCs and FSCs – LCCs are expected to report less on CSR.

Proposition 2: LCCs are expected to engage in CSR initiatives to a lesser extent than FSCs as reflected in the content of their disclosures.

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3. Methodology

For the purposes of this exploratory study a qualitative research strategy was found appropriate, as the study sought understanding of various airlines’ CSR activities, which are not so easy to be quantified in purely numerical data and may be interpreted in multiple ways. Furthermore, qualitative research tends to be more open-ended than is the case with quantitative research (Ritchie et al., 2014). Moreover, qualitative research process is more associated with the inductive approach, with theories and concepts being more viewed as outcomes of the process, and often using an interpretivist model allowing the existence of multiple subjective perspectives (Quinlan, 2011). Thus, qualitative research strategy, guided at all stages by the above specified research question, was found to be appropriate for purposes of this exploratory study (Agee, 2009).

3.1. Research Design

Research designs are types of inquiry that provide a specific direction for procedures in a research and frameworks for the collection and analysis of data (Creswell, 2003). As this study aimed to provide a general account of the CSR related activities as reported by the individual airlines studied, with the aim of subsequently comparing those accounts, this research used a comparative design.

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for analysis, comparison, and drawing of conclusions, the research was based on comparative research design.

3.2. Methods

Research methods refer to the specific means or activities designed to collect or generate data needed to solve a problem, carry out an investigation, and ultimately leading to answers to the research questions (Greener, 2008). For the purpose of this study, data were collected from annual reports, dedicated CSR websites, and separate “stand-alone” CSR reports issued directly by the airlines studied and available online in English on their websites. Such an approach of using multiple sources of data is believed to increase reliability of the subsequent findings (Yin, 2003).

The collected data were subsequently analysed using qualitative content analysis technique (i.e. looking for emergent CSR related themes, goals and initiatives addressed by individual airlines). Such choice of methods is often considered common practice in CSR related research as alternative methods, such as interviews, would be too difficult to acquire and could also be prone to interviewee bias, and thus are not used. Qualitative content analysis seems to be a common practice when analysing CSR related documents in many studies (Cowper-Smith & de Grosbois, 2011; Holcomb et al., 2007; Kemp & Vinke, 2012). Similarly, there are number of reasons to use such methods of qualitative content analysis in this study as well. Firstly, the content of CSR reported by the individual airlines was expected to vary greatly among different carriers, and thus it would be difficult to develop a very stringent framework required for a quantitative analysis. Secondly, individual carriers vary greatly in naming certain CSR aspects or themes, thus making qualitative approach to analysis less suitable. Lastly, given the fact that CSR reporting in the airline industry is still relatively in its initial stages of development, a qualitative approach may generally lead to uncovering some more interesting aspects of CSR which would again not be possible with a strictly focused quantitative approach.

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(2011) created a framework consisting of two main dimensions (covering all three CSR dimensions), and then divided further into eleven themes. During the analysis one additional theme was identified and added to the framework – customer wellbeing. The final framework used consisted of the following dimensions and themes:

1) Environmental dimension: emissions, waste, energy, water, biodiversity, noise, other; 2) Socio-economic dimension: employee wellbeing and engagement, customer wellbeing,

diversity and social equity, community well-being, economic prosperity.

The current study builds on the research conducted by Cowper-Smith and de Grosbois (2011) and aims to identify specific CSR initiatives/actions implemented by the carriers and investigate their level of adoption, while using an extended sample of both LCCs and FSCs, in order to advance understanding of CSR within the airline industry. This study also broadens data collection strategy from previous studies relying only on a single source (namely annual reports) and includes websites, separate CSR reports, as well as annual reports.

3.3. Sample and Data

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Table 3 – Study sample composed of LCCs and FSCs

LCCs FSCs

Ryanair Lufthansa Group

easyJet Air France-KLM

Air Berlin International Airlines Group (IAG) Norwegian Air Shuttle Turkish Airlines

Flybe Aeroflot

Pegasus Airlines SAS Group

Wizz Air Alitalia

For each sampled airline data was collected in the following way. The availability of three data sources was checked for each airline – annual report, separate “stand-alone” CSR report, and CSR related website/section of a website. A prerequisite was that each sampled airline makes at least one of these sources available in English and accessible through its main or corporate website. In the case of annual and CSR reports, the latest report made available online by the airline at the time of the study was analysed. Similarly, in the case of the CSR website, the content as available online at the time of the study was analysed. When gathering data in form of reports as well as websites, a security check was made using Google search of the airline name in combination with the following key words – “CSR, sustainability, environmental, social, and responsibility” – in order not to overlook anything. To ensure consistency a first page of results yield by Google search was checked. Table 4 provides and overview of data collected for each sampled airline which formed the final data set for subsequent analysis. See Appendix 3 for a brief introduction and background of the sampled airlines.

Table 4 – An overview of data collected for each carrier creating the final data set

Airlines CSR in annual report Stand-alone CSR report CSR related website/website section LCCs Ryanair 2015 no yes EasyJet 2015 no yes

Air Berlin 2014 no yes

Norwegian Air Shuttle 2015 no yes

Flybe 2014/15 no yes

Pegasus Airlines 2015 no yes

Wizz Air 2015 no no

FSCs

Lufthansa Group 2015 2015 yes

Air France-KLM 2014 2014 yes

British Airways 2015 2013 yes

Turkish Airlines 2014 2014 yes

Aeroflot 2014 no yes

SAS Group 2014/15 2014/15 yes

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4. Analysis and Findings

4.1. Main Empirical Findings

The main empirical findings of this study are summarized in Table 5 below. For each proposition, empirical findings, summary of main conclusions, with the respective sections and tables, where the results are discussed in more detail, are indicated.

Table 5 – Summary of main empirical findings

Propositions Empirical

finding Conclusions Sections Tables

P1: LCCs report

less extensively on CSR than

FSCs.

Accepted

FSCs used significantly more pages and words in their CSR disclosures than LCCs;

Majority of FSCs, in contrary to LCCs, generally made use of all three types of CSR

disclosures studied, including extensive “stand-alone CSR reports;

LCCs did not report on CSR via extensive “stand-alone” CSR reports at all, they only used rather short sections in annual reports

and/or websites. 4.2. – 4.5. 4, 6 – 8 P2: LCCs engage in CSR initiatives to a lesser extent than FSCs, as reflected in the content of their disclosures. Accepted

LCCs reported much lower levels of commitment to the specific CSR themes and

goals than FSCs in their disclosures; LCCs reported significantly lower numbers of individual CSR initiatives supporting each

theme and goal;

The adoption levels of individual initiatives and the provision of measurements or progress indicators was considerably lower in

the case of LCCs than in the case of FSCs.

4.6. 9 – 12

P3: Both LCCs

and FSCs will address the three

dimensions of CSR to an unequal

extent, with the most focus on the

environmental dimension.

Partially accepted

Both types of carriers addressed the three dimensions of CSR to an unequal extent;

Environmental dimension received a considerable attention from both LCCs and FSCs, but the greatest amount of initiatives supporting individual CSR themes and goals were reported by both types of carriers for the

social dimension;

The economic dimension of CSR was the least often addressed by both types of

carriers.

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As of April 2016, all sampled carriers, with an exception of Alitalia, made their annual reports available online in English at their websites. These 13 annual reports were checked for inclusion of CSR related section or content. Once the CSR content was identified, page and word counts were performed to get an indicative understanding of the scope of CSR reporting in annual reports of individual carriers in the sample. The word count was performed through the use of MS Word by copying and pasting the CSR content into a new document. Out of the 13 carriers, which made annual reports available, only British Airways did not dedicate any pages/words to CSR content in its annual report. Table 6 provides an overview of the CSR content in annual reports in terms of number of pages and words. When looking at the amount of CSR reporting in annual reports, easyJet is the clear winner among both LCCs and FSCs with 16 pages and 11,471 words spent on CSR content in total. On the other end of the scale, besides British Airways with no words, Wizz Air only spent 381 words on CSR in its annual report.

Table 6 – CSR content in annual reports of airlines

Airlines Number of pages Number of words

LCCs

Ryanair 3 1,642

easyJet 16 11,471

Air Berlin 8 2,770

Norwegian Air Shuttle 4 2,182

Flybe 8 3,462 Pegasus Airlines 1 422 Wizz Air 1 381 FSCs Lufthansa Group 2 1,129 Air France-KLM 7 2,679 British Airways 0 0 Turkish Airlines 4 1,069 Aeroflot 10 3,577 SAS Group 2 1,193 Alitalia - - 4.3. “Stand-alone” CSR Reports

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44,661 words, Lufthansa Group reports most extensively from the sample. On the contrary, SAS Group reports only on 28 pages with 16,427 words. Aeroflot and Alitalia do not report through a “stand-alone” CSR report at all.

Table 7 – CSR content in separate “stand-alone” CSR reports of airlines

Airline – FSCs Number of pages Number of words

Lufthansa Group 120 44,661 Air France-KLM 87 34,966 British Airways 94 33,132 Turkish Airlines 136 28,869 Aeroflot - - SAS Group 28 16,427 Alitalia - - 4.4. CSR Related Websites

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Table 8 – CSR content on carriers’ CSR-related websites

Airline Number of words

LCCs

Ryanair 1,400

easyJet 9,396

Air Berlin 2,286

Norwegian Air Shuttle 1,239

Flybe 1,379 Pegasus Airlines 0 Wizz Air - FSCs Lufthansa Group 11,566 Air France-KLM 5,059 British Airways 7,845 Turkish Airlines 61 Aeroflot 286 SAS Group 4,651 Alitalia 2,460 4.5. Extent of CSR Disclosure

From the results visible in Tables 6-8 it is apparent that the main means of CSR disclosure differ between LCCs and FSCs. LCCs report on CSR predominantly through dedicated sections in their annual reports. None of the LCCs make use of “stand-alone” CSR reports. In 85% of the times they also have a dedicated CSR section on their website. FSCs were generally found to make use of all three types of disclosures investigated – annual reports, CSR reports, and websites – for their CSR reporting. 85% of FSCs include a section on CSR in their annual reports, however, this being mostly brief summary of main CSR issues with extensive references to CSR reports for further details. Contrary to LCCs, 71% of FSCs in our sample, report on CSR through a “stand-alone” CSR report, providing more in-depth information on their CSR strategies than they do in their annual reports. All of the FSCs have website sections on CSR with varying extent of information. Nevertheless, as pointed out above, for both LCCs and FSCs, CSR content on the websites was found to be mostly a summative repetition of CSR content in annual and CSR reports with only little new information. Overall, these results and findings indicate that proposition 1, which states that the extent of CSR reporting varies between LCCs and FSCs, with LCCs expected to report less extensively on CSR than FSCs do, holds true.

4.6. Content Analysis of CSR Disclosures

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CSR strategies. The identified initiatives were categorised into an enhanced framework developed by Cowper-Smith and de Grosbois (2011). The framework consists of two main dimensions, being environmental and socio-economic (covering all three dimensions of CSR), and further divided into twelve themes. Each of the themes consisted of separate goals, for which specific initiatives, which contribute to it, were identified. For each goal, the number of airlines engaged with the goal was recorded. Furthermore, some airlines provided information about specific initiatives contributing towards achieving a particular goal. All of these contributing initiatives were identified and recorded. Based on to which goal it contributes the most and in relation to which dimension it was mentioned by the airline the most, each initiative was categorised only under one particular goal, even though it may contribute to more than one goal. For each initiative the numbers of carriers reporting them, as well as the numbers of carriers providing some measurement (mostly in form of a percentage or numerical impact) of the particular initiative, were recorded. It is possible that the number of carriers reporting a particular goal is greater or lower than the number of carriers reporting a particular initiative categorised within that goal and vice versa. This could occur when, for example, a carrier reported efforts to achieve a certain goal but did not provide any information about specific initiatives contributing towards achieving that goal. For the purposes of comparison the analysis was performed separately for LCCs and FSCs. The findings from the qualitative content analysis, with the numbers of carriers reporting each CSR goal and specific initiatives as well as numbers of carriers reporting on their progress towards those initiatives are presented separately for each type of carrier in Tables 9-12 in Appendix 2.

4.6.1. Environmental Results

The specific initiatives implemented by individual carriers in order to mitigate or lessen the impact on the environment were organized into seven themes to which they contribute the most: emissions, waste, energy, water, biodiversity, noise and other. The environmental results are presented in Tables 9 and 10 in Appendix 2 for LCCs and FSCs respectively. Emissions

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Numerous initiatives and actions to reduce CO2 emissions throughout operations were reported, such as reducing fuel consumption, introducing new fuel-efficient aircrafts, improving aerodynamics by installing winglets/sharklets, reducing weight of aircrafts, engine washing, and optimized flight procedures (e.g. continuous descent approach or one engine taxing). In reducing CO2 emissions, the differences between the two operational business models of LCCs and FSCs were the most visible. To reduce emissions and fuel consumption, LCCs reported initiatives using their low-cost operational model features such as operating high seat-density configuration of aircrafts, high load factors, using infrastructure of secondary airports (to avoid congestion), and operating point-to-point routes (reducing the number of take offs and landings). Also, even though, both LCCs and FSCs were introducing new fuel-efficient and more eco-friendly aircrafts to their fleets, LCCs were doing this at significantly larger scale than FSCs. This resulted in LCCs having on average much younger fleet than FSCs (measured as average age of aircraft in a fleet). Another popular initiative in this category, predominantly with FSCs, involved research on and use of alternative and bio- fuels. Six FSCs compared to only two LCCs reported such initiatives. Regarding the reduction in air pollution, the most commonly reported initiative focused on introduction of the latest engine technology (reducing NOx emissions). However, FSCs were more active in pursuing this goal and reported additional initiatives such as climate and air quality research, use of environmentally-friendly ground vehicles and electric power on ground instead of fuel, and also encouraging their employees to use electric cars by installing charging stations.

Generally, FSCs provided more information on measuring their progress of individual initiatives and actions. Almost all carriers provided some indication or measurement of their reduced fuel consumption and CO2 emissions. However, a comparison between them was very difficult to make as each carrier reported their progress in a slightly different way with mostly only FSCs providing information on methodology of their calculations.

Waste

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Lufthansa’s on-board dishwasher (reducing waste from catering with minimum use of water) were implemented by carriers in order to reduce waste.

Energy

The goal of reducing energy consumption was reported by six FSCs (85%) and only one LCC (14%). Eight initiatives were identified in airline disclosures as contributing towards this goal, of which only one – use of LED bulbs – was reported by one of the LCCs. Generally, the level of adoption of the individual initiatives was relatively low; none of them was reported by more than three carriers.

Water

The theme of water included two goals – reduction of water usage and reduction of water pollution. Four FSCs (57%), compared to only one LCC (14%), reported the goal of reducing the use of water. The goal of reducing water pollution was reported only by three FSCs (42%). Even though, carriers reported the two goals, only very few specific initiatives contributing to those goals were identified. Similarly, these initiatives were widely not measured.

Biodiversity

Within the theme of biodiversity there were two goals – ensuring ecological integrity and involvement in environmental conservation projects. None of the LCCs studied reported any engagement with biodiversity theme at all. On the other hand, four FSCs (57%) reported both goals within biodiversity theme with a number of initiatives in each. For ensuring ecological integrity, the most popular initiative was the use of responsible catering products, reported by four carriers and measured by two. The other initiatives included the use of eco-friendly products such as paper and air-conditioning refrigerants, but these were only reported by one carrier each. Within the second goal, five initiatives were identified with sponsorship of or donating to environmental projects and avoidance of deforestation initiatives being the most popular and most often measured initiatives among FSCs.

Noise

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noise emissions), only four of them reported this particular initiative with only two LCCs providing measurements of it. Contrary to this, all FSCs reported introduction of quieter aircrafts and engines (with five providing measurements). Other popular initiatives included compliance with ICAO Chapter 4 and/or 14 noise levels, working locally with airports and organisations to reduce noise, and optimized operational procedures (such as flap settings or curved approach). ICAO Chapter 4 is a standard for aircraft noise emissions. Aircrafts manufactured after 2006 comply with this, previously manufactured aircrafts can be retrofitted with corresponding technology to fulfil this standard. Retrofitting older aircrafts with noise-reducing technologies was implemented by some of the FSCs. Interestingly, some carriers such as British Airways were already ahead in terms of noise emission standards, with 50% of its fleet fulfilling even more stringent regulations of ICAO Chapter 14, which is due to be introduced in 2017. FSCs generally provided more information on measurements of their noise mitigation initiatives compared to LCCs.

Other initiatives

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The specific initiatives implemented by individual carriers in relation to social and economic dimensions of CSR were grouped into five main themes: employee wellbeing and engagement, customer wellbeing, diversity and social equity, community wellbeing, and economic prosperity. The social and economic results are presented in Tables 11 and 12 in Appendix 2 for LCCs and FSCs respectively.

Employee wellbeing and engagement

This theme was the most widely reported from social dimension among both LCCs and FSCs. The theme was categorised into four goals – improvement of employee health, safety and wellbeing, reported by six LCCs (85%) and six FSCs (85%); increase in employee involvement and empowerment, reported by six LCCs (85%) and six FSCs (85%); increase in employee involvement in CSR issues, reported by five LCCs (71%) and five FSCs (71%); and provision of opportunities for employee education and advancement, reported by five LCCs (71%) and six FSCs (85%). Numerous initiatives supporting these goals were identified.

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The most often reported initiatives by both LCCs and FSCs contributing towards the second goal of increasing employee involvement and empowerment were negotiating with employees through representative committees and unions (reported by three LCCs and six FSCs) and providing various opportunities for employee feedback (reported by four LCCs and five FSCs). Other initiatives within this goal had generally low levels of adoption and were each reported by three airlines at most.

Nine different initiatives in total were reported by LCCs and FSCs to contribute towards the third goal of increasing employee involvement in CSR issues. LCCs mentioned five and FSCs mentioned eight initiatives in their CSR disclosures. The most popular ones were having an internal code of conduct (reported by four LCCs and five FSCs) and provision of CSR/ethics training to increase employee awareness (reported by five LCCs and four FSCs). Although the carriers reported a number of initiatives contributing to this goal, neither of them extensively measured progress or impact of those initiatives.

The fourth goal of provision of opportunities for employee education and advancement was supported by eight initiatives in total, with LCCs reporting six of them. The two most commonly reported initiatives were provision of vocational training (reported by five LCCs and six FSCs) and provision of career development and opportunities for continuous learning (reported by five LCCs and six FSCs).

Overall, both LCCs and FSCs implemented many initiatives within this theme, however, the level of adoption among FSCs is generally higher and they also provide more measurements towards their progress with individual initiatives than LCCs do.

Customer wellbeing

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sections, to this theme in their CSR disclosures, thus it was included in the framework to provide a complete picture of the content of CSR disclosures.

Diversity and social equity

The theme of diversity and social equity encompassed two main goals – increasing diversity and social equity in the workforce and ensuring universal accessibility for customers and employees. The first goal was relatively popular with both types of carriers; it was reported by six LCCs (85%) and five FSCs (71%). In total seven initiatives were identified that contribute to the goal of increasing workforce diversity and social equity. By far the most popular initiative reported was being equal opportunities employer (reported by six LCCs and five FSCs). However, it needs to be born in mind that in Europe, equal employment opportunities are part of an EU directive from 2000, thus this initiative would not appear to be voluntary. On the other hand, some airlines offer local contracts outside of the EU at the same time, thus this may not apply in such cases. Only two LCCs and three FSCs provided a measure reflecting them as equal opportunities employer though. Other popular initiatives, reported by four FSCs but only one LCC, were increasing the number of women in management and enhancing cultural diversity of employees. Interestingly, two airlines, one LCC (easyJet) and one FSC (Turkish Airlines), went further with their efforts to increase the number of females in their workforce and reported initiatives to increase the number of female pilots, an occupation greatly dominated by males.

The second goal within this theme, providing universal access for customers and employees, was reported by one LCC (14%) and three FSCs (42%). Six initiatives were identified, but mostly reported by one carrier each only. It should be noted though that provision of equal accessibility is largely mandatory rather than voluntary, thus carriers may not feel the need to include such information in their CSR disclosures.

Community wellbeing

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(reported by two LCCs and five FSCs). Interestingly, two FSCs (Lufthansa and SAS) reported initiatives supporting refugees in reaction to the latest social affairs in the EU.

The second goal – involvement in international projects – was reported by four LCCs (57%) and five FSCs (71%). Within this goal, four initiatives were identified. Carriers reported on having partnerships with charitable organizations and/or NGOs (reported by four LCCs and five FSCs), donating money to charities (reported by three LCCs and four FSCs), having an on-board charity collection programme (reported by two LCCs and three FSCs), and being involved in humanitarian aid projects (reported by one LCC and five FSCs). The on-board charity collection programme took the form of passengers donating spare foreign currency change on international flights and humanitarian aid consisted of occasional projects such as, for example, sending an aircraft full of supplies to areas struck by natural disasters, or providing a specially equipped aircraft for medical evacuation of ebola patients.

The third goal – raising customer awareness of CSR issues – was reported by three LCCs (42%) and three FSCs (42%). This goal was supported by a number of initiatives; however, most of them were implemented by one carrier each only. Some of the more popular ones, predominantly among FSCs, were having CSR initiatives on-board in form of an announcement or a sustainability themed film, a voluntary option for passengers to offset their CO2 emissions by making donations while booking a flight, and an option to donate frequent-flyer miles for various CSR purposes.

Economic prosperity

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form of a percentage of on-time payments per year. However, it is questionable to which extent this is a CSR practice or more of a general business practice that should be implied for every business.

The second goal – job creation – was supported by three different initiatives and was mentioned by five FSCs (71%) and none LCCs. Even though, LCCs did not mention the goal of job creation in their disclosures, five of them (same number as FSCs) reported on providing internships, graduate and apprenticeship programmes. All carriers reporting this initiative also measured it. The two other initiatives, implemented by two and one FSCs respectively, were acquiring local talents and organising workshops, job fairs and various networking events in general.

The last goal within economic prosperity was contribution to local economic development. This goal was reported by four FSCs (57%) only. None of the LCCs mentioned this goal or any related initiatives in their disclosures. On the other hand, five different initiatives implemented by FSCs were identified to support this goal. The most popular one was to invest in local infrastructure, reported by four and measured by three FSCs. This initiative often took the form of investing in airport-related developments and increasing accessibility of airports from cities by investing in their transportation networks. Interestingly, some of the airlines, such as Air France-KLM, British Airways, and Turkish Airlines, reported initiatives of supporting SMEs and start-ups or entrepreneurs and social enterprise at their hubs or even at some of their destinations.

Overall, the separately performed qualitative content analysis of LCCs’ and FSCs’ CSR disclosures provided further insight into the differences in extent and volumes of their CSR reporting practices. As obvious from the results of the analysis, LCCs reported much lower orientations towards individual themes and goals included in the framework as well as much lower numbers of specific initiatives supporting individual CSR goals than FSCs did. Similarly, the adoption levels of individual initiatives as well as the provision of measurements or progress indicators of the initiatives were both much lower for LCCs than for FSCs. Therefore, the second proposition – saying that LCCs are expected to engage in CSR initiatives to a lesser extent that FSCs as reflected in the content of their disclosures – holds true here.

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5. Discussion and Conclusion

This study sought comparison of the extent of CSR reporting between LCCs and FSCs within the European aviation industry. Furthermore, the study’s aim was to explore the variations of the CSR content in the two types of carriers’ multiple disclosures and to ascertain the levels of engagement in and adoption of individual CSR goals and initiatives related to the three main dimensions of CSR identified in the literature, being environmental, social and economic.

On a general level, this research reveals that European carriers, including both LCCs and FSCs, are generally aware of CSR problematic and that they feel the need to address it. This would appear consistent with recent consumer studies and literature signifying the increasing pressure coming from consumers and society at large calling for businesses to address CSR issues in their strategies (Mintel, 2011; Kolk, 2007; McIntosh, 2003; Juholin, 2004). While not necessarily true, in public’s opinion, the airline industry is often perceived as one of the industries having the greatest negative impact on the environment. This might be due to its rapidly growing global presence, and thus these calls for sustainability are especially pressuring airline sector as the engine of the tourism industry and forcing all carriers to address CSR. It was observed that majority of carriers are trying to offset these pressures and come across as environmentally-friendly airlines by making bold claims of being industry leaders in sustainability or one of the greenest airlines in the industry. For example, Ryanair, proudly posits itself on its website as the “Europe’s greenest airline”, similarly, Aeroflot talks about itself as an industry leader in CSR. However, these claims are often not backed up and if they are it is with some questionable environmental report or index issued by a not very well-known organisation, and thus arguably verge on greenwashing practices. The only carrier rightfully positing itself as a leader in CSR was Air France-KLM clearly backing this up with their extensive reporting on CSR and by being ranked No. 1 in the airline industry on the widely recognised Dow-Jones Sustainability Index for the 11th consecutive year. Nevertheless, although all carriers in the study acknowledged their responsibility towards society at large in some way or another and addressed CSR through at least one of the three main types of disclosures studied, the study uncovered that the extent and scope of their reporting on the matter varies significantly both among individual carriers and overall between LCCs and FSCs.

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reductions in every aspect of their business operations, do practice CSR. Thus, it can be said that LCCs do not consider CSR as part of their “no-frills” strategies. However, generally in line with the expectations reflected in the study’s propositions, LCCs were found to report on CSR far less extensively than their counterparts FSCs. While LCCs reported on their CSR activities mainly via sections in annual reports and their websites, FSCs, in addition to those two, mostly used alone” CSR reports as well. It is important to note that the “stand-alone” CSR reports were FSCs’ main type of CSR disclosures and the readers were directed to them both in annual reports and on CSR websites.

In addition, FSCs also reported much more extensively on their CSR activities in terms of pages and words used in their disclosures. FSCs’ disclosures (mainly CSR reports) were far more informative and included much more text on CSR than LCCs provided in their annual reports or websites. While on average LCCs used 3,190 words in their main type of CSR disclosure (being annual reports), FSCs used on average 31,611 words in their main type of disclosure (being CSR reports). Similar results were found for the CSR related websites which could be considered to be the most common type of a medium through which a company’s CSR related information is disseminated to the wider public. All carriers in the sample, with an exception of Wizz Air, were found to report on CSR through their websites. Again, FSCs were found to report more extensively on CSR issues through their websites than LCCs, although the difference here was not so large. LCCs used on average 2,612 words, compared to 4,561 words used by FSCs. The analysis revealed that the content of carriers’ CSR websites is mostly a summative repetition of the content in other CSR disclosures studied with only little new information. This was valid for both LCCs and FSCs. There were some exceptions though, carriers, such as Lufthansa, made a good use of its CSR related website and provided interesting and interactive information (e.g. audio recordings of aircrafts landings before and after it was fitted with noise mitigating technology), providing the reader with a greater detail on some initiatives.

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industry, further research would be needed. Nerveless, as far as the extent of CSR reporting is concerned, the bottom line is that to this date, the stringent cost-reducing approach to business operations of LCCs is partially reflected in their rather monosyllabic CSR disclosures in general.

Another important finding of the study was that although generally there was a relatively high commitment among the studied carriers (mainly from FSCs though) to the individual themes and goals within the main CSR dimensions, the level of adoption of specific initiatives supporting those themes and goals was rather low. This was particularly evident from LCCs’ results. In the environmental dimension alone, none of the specific initiatives supporting the environmental goals was implemented by more than 80% of LCCs and only six initiatives were reported by more than 80% of FSCs. Similarly, within social dimension, only one initiative reported by LCCs and four initiatives reported by FSCs were adopted by more than 80% of carriers from each category. Regarding the economic results, only three initiatives surpassed an adoption threshold of 70%. The results showed that most of the initiatives identified in CSR disclosures were on average implemented by one or two carriers only. A summary of the most popular initiatives and their adoption levels is presented in Table 13 in Appendix 2.

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In terms of measuring progress of individual initiatives, even though this was observed to be low across both types of carriers, FSCs generally provided measurements more often than LCCs. The problem with this was that each carrier used slightly different measurements or units, with only few FSCs providing methodologies of their calculations as part of their disclosures. Thus, any comparison of the impact of CSR initiatives across carriers would be difficult to achieve. These issues, together with the choices individual carriers make regarding the information they include in their disclosures, raise concerns about the cross-sectional comparability of information reported by individual carriers.

Overall, when comparing the two types of carriers, it can be concluded that FSCs reported greater levels of commitment to individual CSR themes and goals as well as greater levels of adoption of specific supporting initiatives and their measurements across all three dimensions of CSR. In addition, LCCs in general reported fewer specific initiatives supporting individual goals than FSCs did. This was especially visible in the environmental dimension. For example, the goal of waste reduction was found to be supported by only three initiatives in LCCs’ disclosures, compared to FSCs’ disclosures, where the same goal was supported by fourteen initiatives. Thus, as expected, the analysis of carriers’ CSR disclosures proved that even content-wise, LCCs engage in CSR activities less than FSCs do.

CSR reporting of the European low-cost and full-service carriers: a qualitative content analysis