New Metrics

Report from JetBlue, Ocean Foundation Finds Direct Correlation Between Healthy Ecosystems, Increased Revenue

JetBlue has released a first-of-its-kind report correlating the long-term health of its bottom line with the long-term health of ecosystems, particularly the Caribbean.

By Sustainable Brands | Published 9 years ago | About a 5 minute read

On the heels of recent moves aimed at increasing its revenue that are likely to ruffle flyers’ feathers, JetBlue Airways has released a first-of-its-kind report correlating the health of its bottom line with the long-term health of ecosystems.

Along with The Ocean Foundation (TOF) and A.T. Kearney, a leading global management consulting firm, JetBlue has released the results of their unique partnership and research focusing on the long-term health of the Caribbean's oceans and beaches, and a commitment to action developed with the Clinton Global Initiative (CGI).

This collaboration marks the first time a commercial airline has attempted to quantify nature's wellbeing — in this case, the Caribbean — and directly correlated it to product revenue. The result, EcoEarnings: A Shore Thing, begins to quantify the value of conservation by Revenue per Available Seat Mile (RASM), the airline's base measurement.

The study is premised on the fact that while no one benefits from polluted seas and degrading shorelines, these problems persist in the Caribbean despite the region's strong dependence on tourism, which centers on those same beaches and shorelines. Clean beaches meeting with clear, turquoise water are critical factors in travelers' destination choices and are sought-after by hotels to drive traffic to their properties. Without these natural treasures some, if not many, of the islands in the region could suffer economically. Airline, cruise and hotel demand could drop if only rocky, gray and narrow beaches were available and their accompanying shallow waters were polluted, murky, and devoid of coral or colorful fish. EcoEarnings set out to quantify the dollar value of the local systems that preserve the ideal Caribbean as we know and love it. As Latin America, South America and the Caribbean make up one-third of JetBlue's destinations, their long-term appeal to travelers is well worth the airline’s consideration.

"This analysis explores how the full value of pure and functioning natural environments are connected to the financial models that JetBlue and other service industries use to calculate revenue,” explained James Hnat, JetBlue's EVP, General Counsel and Government Affairs. “No community or industry benefits when beaches and oceans are polluted. However, these problems persist because we are not adept at quantifying both the risk to communities and our business associated with them. This paper is the first attempt to change that."

JetBlue, TOF and A.T. Kearney believe that eco-tourists represent more than those customers who dive along corals or surf on vacation. This traditional classification misses the majority of tourists who come for the landscape the environment provides, the classic tropical shoreline.

Sophia Mendelsohn, JetBlue's head of sustainability, said: "We can think of almost every leisure customer who flies JetBlue to the Caribbean and enjoys a pristine beach as an eco-tourist in some capacity. Think about it in terms of Orlando's theme parks — these popular attractions are inherent to flight demand and ticket pricing into Orlando International Airport. We believe clean, unspoiled beaches should be recognized as the main driver for Caribbean leisure travel. These valuable assets undoubtedly drive airline ticket and destination demand."

The Ocean Foundation participated in the EcoEarnings study in order to make a compelling case for the inclusion of "eco-factors" into an established industry model.

"It is critical to include a thorough analysis of the major environmental factors that we have always believed influence a tourist's decision to travel to a Caribbean destination — trash on the beach, water quality, healthy coral reefs and intact mangroves,” TOF president Mark J. Spalding, an ocean conservationist for more than 25 years, said. “Our hope is to statistically tie together what, at a glance, appears to be obviously related factors — beautiful beaches and tourism demand — and develop analytical evidence specific enough to matter to industry's bottom line."

As one of the largest carriers in the Caribbean, JetBlue flies approximately 1.8 million tourists annually to the area, and earns a 35 percent market share by seat capacity at Luis Munoz International Airport in San Juan, Puerto Rico. A large percentage of JetBlue customers are traveling to enjoy the sun, sand and surf of the region. The continued health of these ecosystems and shorelines in the Caribbean has a direct impact on demand for flights - therefore their appearance and cleanliness should also be a major focus.

A.T. Kearney partner and white paper contributor James Rushing commented, "We were pleased that Jet Blue and The Ocean Foundation asked A.T. Kearney to participate in the study to provide a holistic approach and an unbiased analysis of the data. Although our analysis showed that there is a correlation between the 'eco factors' and RASM, we believe that in the future, causation will be proved with more robust data."

The angle of this study provides an exciting precedent that will hopefully lead other travel service providers — especially the slow-to-evolve cruise industry — to examine not only their long-term impact on the environment, but how it behooves them to invest in its preservation. The study also provides interesting fodder for another one taking place in Ireland: The National Tourism Development Authority of Ireland (Fáilte Ireland), the Burren Ecotourism Network, the Electric Escapes biking consortium, and sustainable travel consultancy Greenloons are collaborating to study the driving elements of sustainability that affect Return on Investment (ROI) in Ireland, developing a holistic approach to determining the ROI of sustainable tourism.