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Canadian airlines feel the pressure of flight-shaming and the 'Greta effect' – CP24 Toronto's Breaking News

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Christopher Reynolds, The Canadian Press


Published Sunday, January 19, 2020 3:45PM EST

MONTREAL – Swedish may not be the lingua franca of the aviation world, but ask any airline executive about the term “flygskam” and they’ll likely know exactly what it means.

Flygskam – Swedish for “flight shame” – is a growing environmental movement that highlights the flight sector’s carbon footprint, putting pressure on Canadian carriers to reduce greenhouse gas emissions while managing the cost of passenger guilt.

“It does seem like a switch has flipped,” says airline expert Seth Kaplan.

“For a while, there was this very incremental recognition of the urgency (of climate change), and then over the past year or so all this has really gotten into the spotlight – aided by Greta Thunberg.”

The Swedish teenage activist, who travelled by racing yacht to a climate summit in New York to avoid flying and its attendant emissions, has focused attention on aviation’s role in global warming, with consequences for travel companies.

The CEO of SAS, one of Scandinavia’s largest carriers, has attributed declining passenger numbers in Sweden to flight shaming. Meanwhile the country’s main train operator, SJ, said it sold 1.5 million more tickets in 2018 than the previous year, thanks to what’s been dubbed the “Greta effect.”

Other European countries are experiencing the same phenomenon. Germany saw a similar decline in domestic flights in 2018, along with a corresponding increase in rail travel.

To combat this trend, airlines are turning to carbon offsets, where they invest in projects such as wind farms and tree planting to compensate for plane-produced carbon dioxide.

Such measures could cost airlines billions, Citigroup Inc. said in a research note last October. The banking conglomerate forecasts that carbon offsetting economy-class flights will cost US$3.8 billion per year within five years.

Carriers could absorb the expense or pass it along to consumers via a higher ticket price, but airlines will struggle in the long run if increased costs deter travellers from flying, Citi said.

If airlines foot the bill themselves, “the cost of carbon offsetting all leisure consumption could be as much as 27 per cent of airlines’ profits by 2025,” wrote analyst Mark Manduca.

Offsetting corporate travel – which Citi defined as business-class seats – will cost another $2.4 billion, reducing airline profits by a further 17 per cent, the report said.

Commercial aviation accounts for about two per cent of global carbon emissions – a far smaller share than that of cars (estimates range between about 15 per cent and 20 per cent) or coal-generated power (30 per cent). “But it emits carbon in a very visible way,” Kaplan said.

“You look up in the sky and you see airplanes flying.”

In Europe, where the European Commission has called for a climate-neutral Europe by 2050, airlines have taken big steps in response.

EasyJet announced in November it would begin to offset emissions immediately, a move that they claim makes them the first major airline to operate net-zero carbon flights.

British Airways followed suit and began offsetting all flights within the United Kingdom as of Jan. 1

New York-based JetBlue unveiled plans to go carbon-neutral on all domestic flights starting in July, the first major U.S. carrier to do so.

Canadian airlines have also made efforts to reduce their carbon footprints, albeit less ambitious ones than their European counterparts.

“Using fuel-efficient aircraft is our best hedge against rising fuel costs and improves our carbon footprint,” WestJet Airlines Ltd. spokeswoman Lauren Stewart said in an email. “We are proud to have one of the youngest and most fuel-efficient fleets in North America.”

Air Canada has committed to carbon-neutral growth starting this year, meaning Canada’s biggest airline plans to cap net emissions, regardless of expansion.

Other efforts by the airline include more fuel-efficient aircraft and biofuel investment, said spokesman Peter Fitzpatrick.

However, the proliferation of budget carriers and a robust tourism sector is resulting in more emissions even as aircraft become increasingly fuel efficient.

A recent study by the International Council on Clean Transportation found that airplane emissions are increasing as much as 50 per cent faster than forecast by the United Nations, whose aviation body predicts aircraft fuel consumption will more than double by 2045.

Europe’s keen awareness and aggressive efforts around climate change may justify a little “tagskryt” – “train-boasting” in Swedish – but travellers on a densely populated continent have a built-in advantage.

“There’s no high-speed rail network here like there is in Europe. The cities are not as closely located as they are in Europe or in Japan. And if I have to go to meetings in Montreal or the West Coast of the United States, flying is my only option due to time and cost concerns,” said Brandon Graver, the Washington D.C.-based airline researcher behind the clean transportation council study.

A lack of investment in high-speed rail by governments in North America is also to blame, experts say, with flights between Montreal and Toronto more appealing in the absence of bullet trains.

Even if Canadian airlines were to proclaim carbon neutrality, its effectiveness remains up in the air.

“There’s been a lot of talk lately that, ‘Look, it’s nice to go and plant trees, but it’s not truly a one-for-one offset – that there’s not enough tree-planting in the world you could do to truly offset the impact of emissions,”’ airline expert Kaplan said.

Nor do carbon offsets address the issue of fossil fuel dependence, according to a recent paper by the David Suzuki Foundation and the Pembina Institute.

“It’s not the silver bullet … to reducing their emissions, but it’s one option of many – while others would call them modern-day indulgences where you’re paying for your sins,” Graver said.

“We’re hopeful that industry and governments together can come together and come up with a climate goal, an actual action that is beyond just lip service.”

This report by The Canadian Press was first published Jan. 19, 2020.

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Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

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Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

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VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

The Canadian Press. All rights reserved.

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

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