Scandinavian Airlines: The Green Engine Decision
Scandinavian Airlines serves 32 million people and is the largest airline in Scandinavia. It has been a first-mover in many areas and has built a positive reputation for corporate responsibility. Having decided to update its fleet with 55 Boeing 737s, SAS now has to decide whether to purchase DAC green engines.
Arguments for and against purchasing the green engine – Director of Aircraft & Engine analysis Having spent almost five years on the decision to purchase a new fleet of airplanes, Nas the director of aircraft and engine analysis, was fully involved and committed to researching and presenting the best option to SAS’s management team. The arguments for purchasing the DAC green engine include the continued commitment to the company’s environmental position, decreased fuel costs, a reduced risk of operational limitations, and a potential increase in passengers.
SAS has developed a strong environmental position since 1995 and stated that it was “committed to using the best available environmental technology” which in the airline industry meant noise and emissions reduction technology (pg. 7). SAS is in the position to prove to its stakeholders how strong its commitment is to the initiative. Since 90% of an airline’s environmental impact is a result of its flight operations, the implementation of the engines will greatly reduce this effect (pg. 3). Furthermore, purchasing the engines may result in reduced fuel costs due to increased fuel efficiency which can counteract the initial cost of the more expensive engines. Purchasing the engines will also allow the company to continue to be a first-mover in the industry and will enable them to comply with the expected future emission restrictions. By already having low-emission engines, SAS will also be able to avoid any operational limitations imposed on airlines and will be able to remain under the NOx and CO2 emissions caps longer than its competitors,...
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