'Flygskam' and the new airships

'Flygskam', the Swedish word which translates to 'flight shame', looks like it might be in contention for word of the year in 2019, with the word rising to prominence thanks to the media controversy over the jet-setting habits of certain celebrities and Greta Thurnberg's recent unusual choice of trans-Atlantic carriage.

Apparently, this anti-flight sentiment, which is driven by concerns around carbon emissions from air travel, has become such a serious issue in Europe lately that Scandinavian Airlines has blamed it for a 2% drop in traffic in the nine months to July 30, compared to the previous corresponding period, according to a Bloomberg report last week.

It would be tempting to dismiss these concerns around carbon emissions as a localised concern, or a fringe media obsession, except for the fact that similar noises seem to be coming from some rather unexpected quarters.

Every week, I get a bunch of emails in my inbox from the group headed by the US financial pundit and prognosticator, Harry Dent. Dent's father was a strategist for the Republican party and Dent himself is a member of the same party. Given this background, I found the conclusion to the following article by Dent that I came across in my inbox last month to be something of an eye-opener:

Rising Temperatures Are Real

Climate change has continued to be a big topic in the news, especially with record temperatures again this summer. Are humans the primary cause?

When this first became a major issue many years ago, I initially was more skeptical of the human impact. I had studied long-term climate cycles and saw how much they’ve varied simply from natural trends. Were we big enough to impact substantially?

The first wake-up call I got was when I looked back at the key very predictable longer-term cycles. Every one of them, from very long to shorter, were pointing towards moderate cooling. Even the shorter-term sunspot cycles keep coming in lower intensity since 1959 – and more so since 1990, which has a cooling effect – and temperatures keep rising anyway!

That’s when I realized that we must be driving that rising CO2 trend and its correlation with temperature that has held throughout history.

In my most macro analysis of all the global trends, the biggest is simply accelerated urbanization since 1920. Developed countries urbanized fully since the mid-1800s, but emerging countries are only starting to in the past several decades – and who are the big polluters now? China, and increasingly India.

Look at this chart. It shows a correlation between urbanization and CO2 on a 40-50-year lag. Here, 50 is used.


Urbanization roughly triples GDP per capita, and then people use a lot more energy.

But why the lag? The scariest part about CO2 (and methane) emissions in the atmosphere is that they are cumulative. They last a long time and build upon each other like compound interest. Hence, a 40-50-year lag makes total sense to me.

That means that even when global urbanization is predicted to slow down again near 80% urban around 2110, the damage to the atmosphere and warming will continue for another 40-50 years… Damn!

I know this is a politically sensitive topic that divides largely on partisan lines.But my forecasting techniques do not – except in shorter-term scenarios.

I came into this issue a sceptic… I am not now. This is a serious issue and will become more so… another reason I’m glad I’m in mountainous Puerto Rico rather than flat Florida.

We’re lucky that the sunspot trends are working in our favor and will likely continue to do so for at least the next 10 years.


If Dent is now convinced that there is a link between C02 emissions and global warming, it makes you wonder how many other members of the Republican party are quietly shifting towards this view.

At any cost, if the concerns around the excessive carbon footprint of air travel start to spread from Europe to other Western countries, that could prove to be a major headache for the carriers, judging by the following extract from the Bloomberg report on the situation in Europe:

...The danger for airlines is growing as companies cut back on business travel. Finland’s Nordea Bank Oyj aims to trim flights 7% this year and plans internal carbon fees to meet that goal. German broadcaster Tele 5 in June said it will no longer pay for domestic flights for its 60 employees. Consulting company PwC and Switzerland’s Zurich Insurance Group AG say they want to reduce carbon emissions per employee by a third or more from 2007 levels, mostly by cutting back on flights. “More of our meetings are taking place in virtual space,” says Alison Martin, Zurich’s chief executive officer for Europe, Africa, and the Middle East. “Flying isn’t a prerequisite for getting business done.”

...It’s hard for airlines to push back, as there’s little they can do to reduce their carbon footprint. While manufacturers have introduced more efficient jets in recent years, CO₂ output per passenger mile remains at least quadruple that for trains. And thousands of older models are in service because planes typically fly for decades before being retired. Carbon offsets—paying someone to plant trees or otherwise reduce or absorb CO₂—can help ease passengers’ conscience, but few people use them, and every flight still creates tons of carbon dioxide.

With breakthroughs such as electric or hybrid jets unlikely to see commercial service before the 2030s, a quick technological fix for the CO₂ problem is improbable, says Tim Clark, CEO of Emirates. “In the next couple of decades, we might see some short-haul aircraft” with hybrid engines, he said at a September conference in London. “But with long-haul, it’s much more difficult.”

While it sounds as if the European Airliners are in an unenviable situation, that suggestion in the last paragraph that there is no 'quick technological fix' for the airliners CO₂ problem may not be entirely accurate.

An emerging solution to this problem might be found in a new generation of airships that a number of companies around the world are currently developing. These hybrid air vehicles fall somewhere between a fixed-wing aircraft and a zeppelin, with the helium-filled bulbous body of the aircraft partially offsetting the weight of the craft. This off-kilter design makes the prospect of zero-emissions powered aircraft a realistic possibility in the near term.

One pioneer in this field is a company called Hybrid Air Vehicles, who, according to this August report, have now secured the first two letters of intent for their Airlander 10 hybrid airship. The company had previous relied on a group of small shareholders for funding (which the report notes, curiously, includes the vocalist from the band Iron Maiden) however the company is now sitting pretty and ready to open up a production line, though the first deliveries aren't expected until 2024.

Another company that has entered the race to develop a viable airship is the French company Flying Whales, which plans an IPO in 2021. The company intends to build 150 of these airships over the next decade. Sounds like plenty of helium demand there, assuming all goes to plan.

Unlike Hybrid Air Vehicles, the focus of Flying Whales is on shifting cargo from point a to point b, a task for which the new airships are particularly well suited. In contrast to fixed wing planes, these airships can almost land on a dime, and so it has been speculated that they would be ideal for shifting cargo to remote regions of the world such as isolated parts of Africa, as depicted in the graphical representation below.




Whether the airships are used for transporting passengers or cargo, the growing concerns around the excessive carbon footprint of conventional aircraft might suggest that the new airships will be a common sight in the skies above in years ahead.

Needless to say, these worries about the impact of carbon emissions is also likely to impact oil and gas companies, potentially resulting in less demand for hydrocarbon oil and gas over the long term.

But one gas, helium, looks like it might be set to become a significant beneficiary of the rising carbon concerns, if the new airships start replacing conventional aircraft in future. This could result in a paradoxical situation whereby those oil and gas companies who have some exposure to helium might actually end up becoming winners from the shift away from carbon-based fuels.

Conceivably, at some stage this could result in a mad rush by oil and gas companies as they scramble to secure scarce helium assets.

All things considered, it sounds like a company such as Qantas might stand to be a potential loser from the 'Flygskam' trend, with helium a likely long-term winner.