Oneworld Oneprize

CONCEPT PLAN
oneprize
Leveraging Emission Trading Schemes for a Competitive Advantage

Oneprize Concept Plan
oneworld oneprize - 2 -
Preface
This concept plan was written by Matthew Kronborg circa 2009.
At the time most airlines believed carbon pricing would only bring downside risks
and costs. This document challenged that prevalent thinking by outlining an
innovative opportunity for competitive advantage that carbon pricing would
provide. It was based on the best available data in the public domain at the time.
Key words
Aviation, Airline, European Union Emissions Trading Scheme,
Sustainable Aviation Fuel, Energy, Prize, Mega-scale, Innovation, Commercial,
Environment, Carbon Pricing, Climate Change, Solutions

Table of Contents
Oneprize ........................................................................................5
Purpose .......................................................................................5
Mission........................................................................................5
Summary of Key Benefits...............................................................6
Executive Summary ......................................................................7
Concept Summary ........................................................................7
Glossary .........................................................................................9
A Brief History of Aviation Prizes ...................................................... 10
Full Concept Outline ....................................................................... 11
Benefit: .................................................................................. 14
Cost:...................................................................................... 14
Value of the Cash Prize:............................................................ 15
Distribution of Oneprize strategy cost amongst Oneworld Members: 15
Voluntary cessation of Oneprize Strategy: ................................... 16
Leveraging the marketing potential of the Oneprize ......................... 16
The Psychology: Altruism and the Premium Oneworld Target Market17
Marketing Campaign: ............................................................... 18
Announcement of Oneprize Competition:..................................... 19
Marketing Slogan:.................................................................... 20
Financial Benefit ............................................................................ 20
Leveraging the intrinsic mechanism of the Oneprize Competition ....... 21
Oneprize Competition Conditions and Sustainability Criteria................. 23
Triple Bottom Line Expectations of Bio Jet Product Proposal .............. 24
Economic:............................................................................... 24
Social:.................................................................................... 25
Environment: .......................................................................... 25
Other: .................................................................................... 26
Award Strategy.............................................................................. 26
Outline of the strategy for the awarding of the cash components of the
Oneprize competition................................................................... 27
Oneprize Strategy Rollout Plan......................................................... 28
Phase 1: Applications Open .......................................................... 28
Phase Two: Winner Selection........................................................ 29
Phase Three: Implementation and Operation .................................. 29
Phase Four: Business as Usual...................................................... 31
Initial Stakeholder Analysis ............................................................. 31
Oneworld Member Airlines: .......................................................... 32
The Supplier (Winner): ................................................................ 32
Sustainable Aviation Fuel Producers............................................... 34
Incumbent Conventional Jet Fuel Producers .................................... 35
Crude Oil Extracting Interests....................................................... 35
Global ....................................................................................... 36

Risk Register ................................................................................. 37
Internal Risks ............................................................................. 37
External Risks ............................................................................ 38
Next Steps.................................................................................... 41
Appendices ................................................................................... 42
Aviation and our Environment: Key Background Facts...................... 43
Carbon Intensity ......................................................................... 44
Emission Trading Schemes: Basic Theory ....................................... 45
Future carbon pricing schemes...................................................... 46
Other Key Quotes ....................................................................... 47
MEDIA RELEASE from the Sustainable Aviation Fuel Users Group ...... 55
Visioning the Sustainable Feedstock .............................................. 59
A Technical Overview of Jet Fuel (Jet A-1) ...................................... 60
Initial Financial Analysis.................................................................. 62
“A plan to support profit, people and the planet”

Oneprize
Purpose
In the future it is inevitable that the air transport industry will be covered
by the carbon-pricing schemes that are emerging around the world. This
carbon regulation, likely to be based around emissions trading
mechanisms, will place a financial burden on both the airline members of
the Oneworld Alliance and its competitors.
However, this burden need not be a commercial threat, rather it provides
the opportunity for a sustainable competitive advantage for the Oneworld
Alliance that would increase shareholder value.
Indeed, the first airlines that are able implement ways to continue
operational capacity growth whilst simultaneously reducing exposure to
this financial burden will garner an early mover advantage. This document
outlines an innovative concept plan based on facts, realistic assumptions
and credible forecasts for how the Oneworld Alliance and its members
could work collaboratively to achieve this advantage whilst gaining wider
long-term strategic benefits.
Mission
To leverage the European Union’s Emission Trading Scheme for a financial
and reputational competitive advantage benefitting the Oneworld Alliance
member airlines. This will be achieved principally by using this group’s
immense jet-fuel purchasing power coupled with a prize mechanism to
attract the exclusive rights to the price-parity production output of the
first mega-scale economically, socially and environmentally superior
Sustainable Aviation Fuel producer for a strategic multi-year period in a
low cost and low risk manner. As an added benefit, in doing so the
Oneworld Alliance will accelerate the creation of a global sustainable
Aviation Fuel industry that will benefit the air transport industry, people
and the planet.

Summary of Key Benefits
Oneworld Alliance:
Financial • Reduction in carbon liability for the EU ETS of at
least €206.77 million (worst case) over the period
2012-2017, for a capital investment (that will be
fully recouped during that period) of €269 million.
• Leverage the marketing potential of this strategy
for financial benefit in the order of €75 million over
the period 2009-2017.
Reputation • Reposition the premium Oneworld Alliance as the
global benchmark in market transformative
sustainability and the first global airline alliance to
achieve significant net carbon emission reductions
beyond fuel efficiency gains or total capacity
reductions.
Global:
Economic • Assist and accelerate the development of a
Sustainable Aviation Fuel industry that is cost
competitive with fossil oil, which will;
Social • Create a global net increase in jobs as well as
contribute to reducing the impact of climate change
on global society, and allow a;
Environmental • Reduction in CO2-e emissions for the Oneworld
Alliance over the period 2012-2017 in the order of
15.3 million tonnes.

Executive Summary
Envisage the Oneworld Alliance thinking into the future and establishing a
revolutionary plan to leverage emerging emission trading schemes for a
financial advantage in a way that will also benefit people and the planet.
This could be achieved from mid-2012 when much of the global air
transport industry will be directly included in the European Union’s
Emission Trading Scheme (EU ETS), and potentially beyond that included
in a global carbon-pricing mechanism.
Initial financial analysis shows the concept plan set out here could reduce
exposure to the EU ETS for the Oneworld Alliance by at least €206.77
million over the period 2012-2017 for capital investment (that will be fully
recouped during that period) of €269 million. Additionally, it would
establish a marketing advantage that could be leveraged for financial
benefit in the order of €75 million over the longer period of 2009-2017.
Concept Summary
Step 1
Establish a large cash-prize incentive competition, valued at €250 million,
for the first mega-volume drop-in Sustainable Aviation Fuel producer with
a commitment by the Oneworld Alliance to purchase 100% of output for a
strategic multi-year (approx 10 year) period.
This competition will be designed in such a way so as to assist to
accelerate the development of a high integrity, economically, socially, and
environmentally superior replacement for traditional jet fuel, and; that will
focus market investment in Sustainable Aviation Fuel development
towards supply chains that terminate at the Oneworld Alliance’s major
hubs in the European Union. The announcement of such a major stimulus
competition by the Oneworld Alliance will loudly demonstrate the
Oneworld Alliance’s commitment to sustainability and its efforts to reduce
the societal mega-risks of anthropogenic climate change. This will be used
as a marketing competitive advantage to generate a financial benefit in
the order of €75 million over the period 2009-2017. Much of this
reputational benefit will be crystallised into revenue before the prize has
even been awarded.

Step 2
The terms of the competition will provide an opportunity to contractually
secure the Supplier to a fuel Off-take Agreement with an Exclusivity
Clause that will remain until a peak threshold volume of ‘100% of the
Oneworld Alliances ongoing jet fuel demand in excess of 2004-2006
historical requirements for European Operations’ is met (approx 6.3
gigalitres p.a. in 2016).
Under the EU ETS only certified biofuel is “zero rated”. Such biofuels
have nil associated carbon liability.
The outcome of the Off-take Agreement with its Exclusivity Clause and
resulting Sustainable Aviation Fuel supply will be a direct financial
benefit for Oneworld Alliance member airlines that will have
dramatically reduced liability under the EU ETS for the duration of the
Off-take Agreement and a favourable ongoing market position to
continue to receive such fuel supply in future.
This reduction in financial exposure to the EU ETS will benefit
Oneworld customers as a portion of the savings may be passed on to
them, making Oneworld airfares more competitive.
Also it will benefit the planet, as the Oneworld Alliance will have
significantly reduced its carbon footprint for flights to, from and within
the European Union, for the period 2012-2017 in the order of 15.3
million tonnes CO2-e.
“Climate change threatens all our goals for development and social
progress. It is the one true existential threat to the planet.”
- Ban Ki-Moon, Secretary General of the United Nations

Glossary
For ease of use this document contains Term words and thus must be read in conjunction with this
Glossary, where the definitions of these capitalised words can be found.
Oneworld refers to the Oneworld Management Company Ltd, which is the
Oneworld Alliance managing company based in Vancouver,
Canada
Oneworld Alliance refers to the full collection of the full Oneworld member airlines
Oneworld Member refers to a full airline member of the Oneworld Alliance whose
CEO sits on the board of the Oneworld Management Company
Ltd
EU ETS refers to the European Union Greenhouse Gas Emission Trading
Scheme that is set to include the aviation industry from mid-
2012 according to Directive 2008/101/EC Of The European
Parliament And The Councili
European Operations refer to all flights “arriving at and departing from (European)
Community aerodromes” as these flights are included within the
scope of the EU ETS according to clause 16 of Directive
2008/101/EC Of The European Parliament And The Council
Supplier refers to the Winner of the Oneprize Competition
Winner refers to the winning applicant of the Oneprize Competition
Parties refer to the Oneworld Alliance and the Winner
Oneprize refers to the cash prize itself and its associated incentives
Oneprize Competition refers to the competition component of the Oneprize Strategy
and its associated terms and conditions
Oneprize Strategy refers to all related phases of the Oneprize Competition; before,
during and after as a single strategy
Ratio refers to the ratio of ‘total forecast financial burden of the EU
ETS from 2012 to 2017 without the Oneprize Strategy’ between
Oneworld Members. Calculation of the Ratio will be updated
monthly from the date of Oneprize Strategy inception, with any
rank changes in the Ratio Oneworld Member leader board to
occur only once annually
Applicants refers to any entrants of the Oneprize Competition
Exclusivity Clause refers to a clause in the Off-take Agreement between the Parties
that begins at the initial awarding of the Oneprize and
concurrent signing of the Off-take Agreement and ends when a
volume threshold of ‘100% of the Oneworld Alliances ongoing jet
fuel demand in excess of 2004-2006 historical requirements for
European Operations’ is met
Drop-In refers to any ASTM specification high performance jet fuel that
has similar physical properties to (and is fully mixable with) Jet
A-1 fuel, thus eliminating the need for the redesign of jet
engines and fuel delivery systems
Sustainable Aviation
Fuel (SAF)
refers to a jet fuel derived purely a from biomass-based
feedstock and meeting sustainability criterion as assessed by a
high integrity reputable third party such as the Round Table of
Sustainable Biofuels. To be a true SAF it is not mixed with
conventional fossil oil based jet fuel in any form of ‘blend’

A Brief History of Aviation Prizes
A well designed prize that captures the imagination can inspire the kinds
of efforts that lead to radical and sudden breakthroughs, largely because
those pursuing the prize will collectively devote far more time, attention
and money than is actually on offer. The glamour and prestige of winning
also inspires dedication. And prizes that are open to all can inspire
outside-the-box solutions.
The original modern aviation prize was the Orteig Prize, which offered
$25,000 in 1919 for the first non-stop flight between New York and Paris.
At the time such a feat was deemed crazy and impossible. However,
human and financial capital flocked in effort to claim the prize. As a result,
only a few years later in 1927 it was won by Charles Lindbergh who in
doing so inspired millions and laid the seeds for a global long-distance air
transport industry.
Charles Lindberg with the Spirit of St. Louis after winning the Orteig prize in 1927
More recently the Ansari X Prize, from the X Prize Foundation, was created
which led to “the first non-government organisation to launch a manned
reusable spacecraft into space twice within two weeks”. It was won in
2004 by Burt Rutan’s SpaceShipOne. The small US$10 million cash prize
attracted over $100 million into new technologies in pursuit of the prize
and single handily has laid the foundation for a civilian commercial space
industry
ii
.
Burt Rutan with Space Ship One after winning the Ansari X Prize in 2004

Full Concept Outline
Multiple sovereign governments are presently implementing or considering
implementing, carbon pricing mechanisms that will add a cost burden to
the business models of many organisations, including all international
airlinesiii
. The intention of such regulation, is of course, is to reduce net
emissions economy-wide by driving innovative market-based solutions.
The primary aim of the oneprize concept plan is to step up to this
challenge positively and tactically encourage burden reducing solutions by
leveraging the most far-reaching of the presently proposed carbon pricing
mechanisms - the European Union’s Emission Trading Scheme (EU ETS).
It is proposed that this emissions trading scheme will include the aviation
sector from mid-2012. The inevitable implementation of additional
national or global carbon pricing mechanisms would only serve to
reinforce the foreseen benefits of this concept plan. This plan is designed
so that any deferral or cancellation of the European Commission’s plans
(to cover aviation within the EU ETS from mid-2012) would delay but not
derail the success of this concept.
It is known that presently, in 2009 the EU ETS will impact all current and
proposed Oneworld Alliance member airlinesiv
. This is a result of the EU
ETS Aviation directive legislation which will require all airlines that “fly to,
from and within the European Union” (i.e. all Oneworld members) to
purchase annual emission allowances if they exceed annually reducing
emission limits3
. Additionally, there is proposed EU legislation that will
drive an annual increase in the unit financial cost of these EU emission
allowances.
The EU ETS will encourage airline management to prioritise plans that
lead to improvements in fuel efficiency and that drive the development of
renewable energy solutions. In the case of aviation these are Drop-In
economically, socially, and environmentally superior alternative jet fuels.
The EU ETS will not create a catastrophic cost impact on the aviation
industry but it will certainly provide strong a wakeup call.

Graphical overview of the European Union’s Emission Trading Scheme and its proposed
inclusion of the air transport industryv
Many strategies are increasingly being employed by airlines to shave fuel-
burn in order to reduce fuel costs and minimise expected future carbon
liabilities however; these plans can only go so far whilst airline executive
management’s attention is drawn to more pressing and more tangible
short term issues. Commonly commercially viable strategies to reduce fuel
burn and improve fuel efficiency include: modernising aircraft fleets,
reducing unnecessary aircraft weight, reducing discretionary fuel loading,
optimising aircraft ground operations, optimizing flight
climb/cruise/descent profiles, optimising routes and washing
engines/aircraft. These low hanging fruit options can reduce emissions
intensity but cannot resolve the underlying emissions issue. In fact, trends
show that these options cannot keep pace with the growing net emissions
profile of aviation let alone deliver a comprehensive zero net emissions
solution.
The option that is increasingly being dawned-upon by the airline industry,
is that to fully reduce exposure to carbon pricing schemes they must
operate their airlines using ‘zero rated’ Sustainable Aviation Fuel. This is
the only way to eliminate carbon compliance costs short of reducing flight
operations.
Estimates suggest it will take between five and twenty years to develop
mega-volume price-parity ‘tipping point’ Sustainable Aviation Fuel
solutions if development continues at the present meandering rate. The
majority of expert predictions suggest such solutions are more likely to
occur towards the further end of this timeframe. This is largely due to
relatively limited private and government effort on the matter. Small
volume and higher price SAF production may occur sooner. Some high-
profile experts believe that aviation will always be ‘outbid’ for advanced
biofuels by ground users (such as cars and trucking) unless the aviation
industry can convincingly communicate the techno-economic case for why
its should have preferential access to advanced biofuels through public
policy landscape changes over ground-based consumers. Ground-based
consumers users have access to numerous other renewable technologies
(such as rechargeable electric battery, solar PV and hydrogen) to fulfil

their sustainable energy needs but thanks to the laws of physics, high-
speed long-distance air transport will always require a high-energy-
density liquid transport fuel. This ‘out bidding’ theory accentuates the risk
that from mid-2012 when the EU ETS includes aviation, a major new
financial burden will be placed on airlines with little likelihood of the arrival
of a gigalitre volume price-parity Sustainable Aviation Fuel saving grace.
It is worth elaborating that the most significant fuel efficiency strategy
that airlines currently use to reduce their exposure to carbon compliance
costs is to reduce their aircraft fleet age through the purchase of new
aircraft and engines. From past experience, each generation of new
aircraft and engines are always marginally (~3-10%) more fuel-efficient
due to improved design. This strategy is low risk and provides numerous
other co-benefits but it does have a significant financial cost associated.
For example, Oneworld Alliance member airlines currently have more than
US$75 billion worth of aircraft on ordervi
. It is therefore shown that
consideration should be given to the oneprize concept, which has
comparatively low risk for comparatively very low cost to achieve similar
environmental performance outcomes. The financial analysis section of
this concept plan concludes that, assuming present year-on-year CO2-e
emission and carbon pricing trends continue, the carbon compliance cost
to Oneworld Alliance member airlines will be approximately €624.67
million over the period 2012-2017 for the EU ETS alone (assumes a EUA
price of €10 per tonne), a total cost that could be slashed to €417.90
million if the Oneworld Alliance adopts this concept. It is worth noting that
based on current trends (using the minimal public data available used to
build this concept plan of the Oneworld Alliance members airlines) that
British Airways will by far have the largest liability under the EU ETS.
Due to its extremely large size, strength and premium target market the
Oneworld Alliance is in a unique position to be able to control, focus, and
assist in accelerating the development of a gigalitre scale price-parity
Sustainable Aviation Fuel solution to within a ten year timeframe. The
Oneworld Alliance can work collectively to leverage emissions trading
schemes for strong first mover competitive advantage with minimal
upfront costs.
The Oneworld Alliance can do this though the use of a ‘cash prize’
incentive mechanism.
The Oneworld prize competition shall be called the oneprize.
To leverage financial benefit from the Oneprize the Winner will be
contractually obliged to provide Sustainable Aviation Fuel exclusively to
the Oneworld Alliance until a volume threshold of ’100% of the Oneworld
Alliances annual jet fuel demand in excess of 2004-2006 historical
requirements for European Operations’ is met. It is expected that it will
take several years for the Supplier to scale up production to meet this
volume hurdle, which for instance in 2016 will have reached 6.3 gigalitres
per annum. By design at this point the Sustainable Aviation Fuel produced
in excess to the Oneworld Alliance’s requirements will be permitted to be

released onto the open market where it will become available to all
competitors, priced accordingly, and the Exclusivity Clause shall end.
The multi-hundred million dollar cost savings to Oneworld Alliance
members that collectively arise from reduced annual operating expenses
for EU emissions allowances during the scaling-up period by the Supplier
is the core financial driver of this plan.
Note: The key term ‘100% of the Oneworld Alliance’s ongoing jet fuel
demand in excess of 2004-2006 historical requirements for European
Operations’ is used as it is only emissions from fuel above the 2004-2006
average per airline that is exposed to the financial burden of the EU ETS.
Benefit:
As it has never occurred previously, an accurate forecast of the scaling-up
time period (from 0% to ‘100% of the Oneworld Alliances ongoing jet fuel
demand in excess of 2004-2006 historical requirements for European
Operations’) of the Suppliers fuel production is difficult, however, it is
intuitively estimated this period would conservatively be in the order of
five years. Accordingly, the basic financial analysis conducted here shows
that over this conservative period the Oneworld Alliance members would
collectively save €206.77 million. If the scaling up period is longer than
five years, which is highly probably, even greater savings would be
realised. Additionally, it is estimated that the marketing potential of the
Oneprize could be leveraged for financial benefit of at least €75 million for
the Oneworld Alliance. Additionally, it would help to demonstrate the
aviation industry’s claim that it is committed to reduce its climate change
impact and transfer community pressure on this topic from itself to
incumbent fuel suppliers.
Cost:
The cash-prize incentive is the primary expense of the business plan.
However, unlike traditional upfront cash prizes the delivery of the
Oneprize cash is uniquely structured to manage risk and cash flow
implications.
Firstly, an upfront lump cash payment of only €75 million (of the €250
million total) will be awarded upon signing the Off-take Agreement.
Secondly, the remainder of the Oneprize will be distributed to the Winner
such that ongoing tranches will not be awarded until actual EU emission
allowance savings are realised (Also see section: Phase 3) Implementation
& operation). This arrangement is designed to be fair whilst reducing risk
to both parties (i.e. this financial grant is guaranteed to the Supplier in
addition to a firm Off-take Agreement). The total cost of the Oneprize
Strategy is estimated in the order of €268.6 million for the Oneworld
Alliance. Practically, the Supplier will see it as a €75 million grant plus a
production subsidy that lasts for several years.
Prize indemnity insurance, such as so called hole-in-one insurance, could
be purchased to eliminate the need for the Oneworld airlines to make a

financial provision for cash to be at hand for the prize to be given at any
moment.
Value of the Cash Prize:
The overall incentive to the Winner of the Oneprize Competition will be
€250 million – the largest ever cash prize of its type.
This size is driven by multiple considerations:
Be it too small and it will not gain the public’s attention reducing its
marketing potential; nor attract the desired financial and
intellectual resources to the Sustainable Aviation Fuel field; nor be
sufficient for the Supplier to accept an Exclusivity Clause in the
price-parity Off-take Agreement.
Be it too large and it will exceed the financial saving made from the
reduction of EU emission allowance requirements.
A key to making the Oneprize competition (with its restrictive
Exclusivity Clause) attractive to potential applicants is to find a cash
quantity and distribution timeline that balances the potential for lost
revenue of the Supplier (as they will receive a fuel price (i.e. price
parity to conventional jet fuel) which is slightly lower than the likely
market rate (i.e. jet fuel + carbon price margin)) with the financial
benefit they will gain as a result of a reduced payback period and
firm sales.
For reference, literature reviewed in the development of this
concept has suggested that the development of a gigalitre-scale
Sustainable Aviation Fuel supply, especially one that would reach
the Oneprize Strategy’s strict triple-bottom-line driven
expectations, could cost up to US$20 billion to reach the market.
The upfront portion of the cash prize package should ideally be
proportionate to the financial benefit gained by the Oneworld
Alliance from the marketing of the Oneprize Strategy over the early
period. The benefit is estimated to be in the order of €75 million for
the Oneworld Alliance.
Distribution of Oneprize strategy cost amongst Oneworld
Members:
The financial cost of the Oneprize Strategy will be split fairly and equitably
among the Oneworld member airlines according to a ratio of ‘total forecast
financial burden of the EU ETS 2012-2017 without the Oneprize Strategy’,
known as the Ratio. The average total Oneprize Strategy cost for each
Oneworld Member is approximately €24.8 million with the majority of that
payable in tranches over time (Also see section: Phase 3) Implementation
& operation). Similarly, all direct financial benefits of the Oneprize
Strategy will be distributed according to the Ratio. This will give all
Oneworld Members an equal cost/benefit ratio. This method also allows
for the addition/subtraction of Oneworld Members in a fair and equitable
manner.

Voluntary cessation of Oneprize Strategy:
If unfavourable global market conditions arise such that the Oneprize
Strategy can no longer possibly achieve its mission, or the EU emissions
allowance price drops substantially, then as a last resort the Oneworld
Alliance may withdraw the Oneprize Strategy and its associated
competition from public offer. Though unlikely, if this occurs the only
associated costs to the Oneworld Alliance will be for the minimal cost of
the Oneprize Strategy office administration over the period that the
Oneprize application process was open at approximately €233,000 per
Oneworld Member airline per annum (Also see section: Phase 1)
Applications open).
If during the period that the Exclusivity Clause is in effect it is found that
the broader market conditions force the trading price of conventional jet
fuel so low as to force the bankrupting of the Supplier because its biofuel
product has become severely uncompetitive then on agreement between
the Parties the Exclusivity Clause will cease to exist and resultantly the
Oneworld Alliance’s commitment to the purchase of the Suppliers fuel will
be dissolved. In this case the supplier will be obliged to pay back the
original €75million as if it were a nil-interest bank loan.
It should be noted that although a ‘voluntary cessation of the Oneprize’
clause will diminish risk to the Oneworld Alliance it will also increase the
risk to potential suppliers and therefore reduce its ability to attract
resources to the SAF Industry.
“No other industry is as united, responsible or ambitious”
- Giovanni Bisignani, IATA Director General and
CEO talking about the air transport industry

Leveraging the marketing potential of the Oneprize
Preliminary estimates suggest that the Oneworld Alliance’s financial
benefit to be derived from marketing the Oneprize competition is in the
order of €75 million EBIT for the period 2009-2017 (refer to the Financial
Model for further information). This equates to an average benefit of
approximately €1 million per Oneworld Member per year over that period.
This marketing derived financial benefit varies depending on the size of
the airline, altruism levels, awareness of climate change among potential
customers in markets served, number of customers and other factors,
however, with relevant market research not available at this initial stage
only the top-down size of each member airline has been taken into
consideration to determine the estimated financial benefit of the
marketing potential of the Oneprize. The strategy of separating the
potential marketing benefits away from the other Oneprize Strategy
mechanisms will encourage each Oneworld Member to conduct its own
marketing to leverage their own financial benefit from the Oneprize’s
reputational potential.
An societal benefit of the Oneprize Strategy is that it will encourage
Oneworld airline members to raise awareness of climate change in their
own markets as they seek to leverage an advantage off this awareness.
The Psychology: Altruism and the Premium Oneworld
Target Market
The Oneworld Alliance offers the world’s foremost premium airline services
to those in the world’s most highly educated, affluent, 30 year old plus
market segment. This target demographic aligns with the demographic
most likely to positively respond to the Oneprize marketing campaign.
A widely known theory in psychology called Maslow’s hierarchy of needs,
created by Abraham Maslow in 1943vii
, outlines ”what man seeks to
achieve with themselves” according to a basic ascending pyramidal
matrix. Beginning from the base level of the pyramid it theorises that a
person typically advances up to the next category once most, if not all
conditions for that life category are met.
The Oneprize campaign stimulates Oneworld premium customer demand
Maslow’s Hierarchy of Human Needsviii

Accordingly, research indicates that people who have the means and
desire to acquire luxury Oneworld premium airline services generally lead
comfortable lives and therefore fit into the uppermost categories of the
pyramid, where “in a world of plenty, man’s struggle is not for survival but
for meaning”.
It follows that this audience will have the highest altruistic commitment to
reduce its climate change impact and will therefore be most likely to be
moved to favourably consider the Oneworld Alliance thanks to the
Oneprize strategy when choosing their airline.
Thus, the target market of Oneworld is that which is most in synergy with
those likely to relate to the Oneprize vision, which will have the influence
of amplifying the potential of the marketing campaign and consequentially
lead to a direct improvement in Oneworld member airline ticket sales.
A similar appreciation is predicted amongst for Oneworld member airline
shareholders who would boost share prices based on a consequential
positive shift in sentiment.
Marketing Campaign:
The advertising blitz accompanying the Oneprize will seek to leverage the
target demographics underlying sense of altruism around the climate
change issue to improve ‘positive feeling’ market positioning and inturn
improve Oneworld revenue generation.
The favourable take-up rates for the Qantas carbon offset program
demonstrates hard evidence that there is an underlying sense of
awareness and altruism in relation to climate change amongst Oneworld
customers and latent demand for carbon neutral airline services.

Announcement of Oneprize Competition:
Proposed Initial Media Release
MEDIA RELEASE
Oneworld airline alliance announces immense €250 million dollar
prize competition for the first mega-scale producer of sustainable
aviation fuel.
New York; July 20, 2010
Showing forward thinking vision and a commitment to sustainability
the global oneworld airline alliance today announced the world’s
largest ever innovation cash prize competition. Called the oneprize,
it aims to accelerate the development of an economically, socially
and environmentally superior alternative to conventional fossil-
based jet fuel.
“The worlds air transport industry is at the forefront of corporate
responsibility and whilst it only produces 3% of the worlds man
made emissions we at oneworld realise a step change is required in
the source of our energy to strongly power us into the future” said
the oneworld CEO.
“Due to the laws of physics the aviation industry is unable to
commercially adopt all but one of the renewable energy solutions
available to ground transport. We agree with the industry consensus
that in the future airliners will be powered by the only available
renewable option, a drop-in liquid transport fuel – Advanced
sustainable biofuel. We recognise that the issue of climate change is
urgent so we hope that a €250million incentive package with a
commitment to purchase the winner’s production volume will be
enough to see a solution in the near future.”
The conditions of the oneprize are stringent in their future focussed
high integrity triple-bottom-line expectations of the winning supplier
but it is clear that there is indeed €250 million package waiting to
be claimed.
More details at http://www.oneworld.com/oneprize

Marketing Slogan:
“oneworld oneprize”
International, simple, inclusive, inquisitive, creative and repetitive
“This renaissance [in prizes over the past 5 years] is driven by the simple
fact that prizes work – almost by definition, since they pay only for desired
results not noble failures. The power of prizes to stimulate innovation
comes from their ability to mobilise resources, intellectual as well as
financial, and to draw attention, which can influence the perceptions and
actions of potential solvers or society at large.”
- Jonathan Bays and Paul Jansen, McKinsey & Company report ‘Prizes: a
winning strategy for innovation’, July 2009

Financial Benefit
Leveraging the intrinsic mechanism of the Oneprize
Competition
The key mechanism that makes this concept financially beneficial is that
the Winner is contracted to exclusively supply the fuel to Oneworld
member airlines until it meets a volume threshold of ‘100% of the
Oneworld Alliances ongoing jet fuel demand in excess of 2004-2006
historical requirements for European Operations’. This threshold will be in
the order of 3.3 Gigalitres in 2012 rising via a straight line to 6.2
Gigalitres by 2016. This Exclusivity Clause is designed to benefit both
Parties (Refer to section: Initial Stakeholder Analysis for detail).
A contractual obligation will result in a fuel price for the Parties that has a
foundation built on price-parity with the average conventional jet fuel
price for that year. If interested suppliers cannot meet this price they will
not apply for the prize.
During initial supply rollout the fuel will be inserted into the energy supply
chain of the Oneworld member airline that is forecast to otherwise pay the
highest average fuel price for the year inclusive of any EU ETS
requirement for emission allowances. In doing so this Oneworld member
will reduce their EU ETS carbon liability in that year. The benefit occurs, as
under the EU ETS legislation, certified biofuel is “zero rated” with nil
associated carbon liability annually.
To work effectively this Oneworld member will need to forecast the total
average fuel price they expect to pay were it not for the Oneprize
Strategy, for the entirety of the same one-year. This is possible as it
aligns with legacy airline fuel procurement practices involving annual
tenders. This forecast price will provide the Supplier with a commitment to
purchase at that price, enabling them to securely develop a fuel supply
chain for that year.
Following initial rollout, a settling up mechanism that requires the input of
accurate forecast annual average fuel price (audited by an agreed third
party) will keep price paid to the Supplier fair. The mechanism will
inherently encourage accurate forecasts with the actual historical average
price for jet fuel used to settle the books at the end of the year. The
mechanism will be designed to financially penalise either Party equally
(say 1%) for biased or inaccurate data at the conclusion of the year.
The Oneworld member with the next highest forecast annual jet fuel cost
will be the next in line to receive the rollout of supply of the fuel and so on
until a volume threshold is reached whereby ‘100% of the Oneworld
Alliances jet fuel demand in excess of 2004-2006 historical requirements
for European Operations’ has been met.

As a result, from the first time an Oneworld aircraft flies that would
require the purchase of EU emission allowances, were it not using
Sustainable Aviation Fuel, each and every Oneworld Member will
essentially receive an indirect discount on their year-on-year fuel cost
though a spread reduction in EU ETS emission allowance requirements.
Therefore, each Oneworld member will have a fuel cost competitive
advantage as a result of this mechanism.
Savings can be significant for Oneworld Members during the
Oneprize Strategy
This financial benefit to Oneworld Members through a spread reduction in
EU ETS carbon liability will only increase over the duration of the
Exclusivity Clause period as more SAF supply comes online until it reaches
zero carbon liability.
From the end point of the Exclusivity Clause the Supplier will be free to
trade with Oneworld competitors. However, by this time SAF supply chain
infrastructure installed by the Supplier terminating at the Oneworld
Alliance’s European hubs for the purposes of the Oneprize Strategy will
likely make it financially preferable to continue a relationship with the
Oneworld Alliance through the standard fuel tender processes.
Additionally, Oneworld members will now have a favourable balance of
power as they will be free to purchase any jet fuel but have greater fuel
supply options available than other airlines.

By this time, several years from now, the Oneprize Strategy will have
accelerated and facilitated the creation of an economically, socially and
environmentally superior alternative jet fuel industry, plus it will have
delivered very significant returns for all Oneworld Members.
“The case for corporate sustainability is both clear and compelling. All
businesses owe a duty to their shareholders to direct their efforts towards
the long-term creation of value. This goal can only be achieved within the
context of a healthy environment, a prosperous economy and a stable
society”
- Leigh Clifford, Qantas Airways Chairman, Qantas Sustainability Report
2008, p4

Oneprize Competition
Conditions and
Sustainability Criteria
Any applicant to the Oneprize Competition must meet the following
conditions to be eligible.
The conditions set the bar heroically high so that potential Suppliers aim
for fully sustainable; economically valuable, socially beneficial, and
environmentally favourable outcomes from the outset. These conditions
are based on the recommendations of the reputable Sustainable Aviation
Fuels User Group (SAFUG) pledge (See Appendices). In addition to these
sustainability criteria any applicant must also be able to meet any
amended criteria of the SAFUG pledge and any EU ETS ‘zero rating’
biofuels criteria.
Triple Bottom Line Expectations of Bio Jet Product
Proposal
Economic:
The fuel product should be similar to all the physical properties of
Jet A-1 (these physical properties are outlined in the Appendix).
The fuel product must meet all civil aviation technical specifications
(such as ASTM D1655/D6615) or any other standards as set by
Oneworld.
The fuel’s energy/volume ratio should be greater than a 5% margin
below conventional Jet A-1 which, discounting temperature
variation is 118,700BTU/gallon. The price Oneworld is willing to pay
per litre will be benchmarked against Jet A-1 and will be
proportionally varied to reflect deviation from this ratio.
The final local 'in-wing' price of the fuel should be equal or less than
the ‘in-wing' price of Jet A-1 at the same location as the Oneworld
Off-take Agreement is based on parity to this price.

Social:
The fuel must not use an organic feedstock source that could be
otherwise used for human consumption, nor may it displace land
that could otherwise be used for food crop production.
The fuel production should not negatively impact on local or global
human populations.
Ideally the feedstock should be able to be grown or sourced from
any country so that all peoples may embrace, and benefit from, a
new clean & cheap energy source; and also because the localising
of the production of the fuel will improve the energy security of
nations.
Environment:
The proposed feedstock growing cycle must only use atmospheric
borne CO2, nutrients, gases, and/or man-made waste products (i.e.
not fed from material/minerals/gases directly unlocked from the old
growth forests or the ground either directly or indirectly)
The feedstock must be grown with non-escape mechanisms built in
to mitigate the biosecurity risk of invasive flora or any prolific
genetically modified super species into the natural environment that
could result in irreversible damage. For instance such a fail safety
mechanism could require the addition of a hyper-unnatural level of
sea salt or require some other mineral or mechanism (i.e.
heat/cool/ultraviolet light) to enable germination.
Any biomass oil extraction process must not use chemical solvents.
There are currently a number of biomass oil extraction processes
available; however, the cheapest and unfortunately most
environmentally damaging type uses chemical solvents, for
example Benzene; a well known carcinogen.
The feedstock should preferably be grown in non-arable arid
(desert) regions of the world so as not to displace food crops or
natural carbon sinks. The feedstock ideally should be grown on
infertile land that is certified to have been previously destroyed by
poor farming practices in preference to the use of a pristine desert.
Overall the production of the fuel must show at minimum 95%
lifecycle reduction of greenhouse gas emissions in comparison to
conventional jet fuel; plus ideally assist in reductions in
deforestation, pollution and the rate of biodegradation.

Other:
The production method must meet the above triple-bottom line
criteria, the SAFUG pledge and in certain cases other conditions as
specified by Oneworld Alliance on application.
Exclusivity Clause- The Winner will undertake to supply 100% of
their fuel production volume exclusively to Oneworld Members ‘into
wing’ just-in-time at major Oneworld hubs located within the
European Union until a volume threshold is reached whereby ‘100%
of the Oneworld Alliances ongoing jet fuel demand in excess of
2004-2006 historical requirements for European Operations’ is met.
Once this volume threshold is met the Winner is released from all
Oneprize Competition jet fuel supply commitments. The exact
forecast magnitude of this volume is beyond the scope of this initial
concept review.
To provide value for both Parties an inbuilt contractual mechanism
will ensure a fair fuel price is paid based on average annual
conventional jet fuel price forecasts with a ‘settling up’ action
occurring at the end of each year to ensure the price paid was the
actual average fuel price for that year plus the Oneprize subsidy
component.
Some high level fuel price forecasts and other data will be needed
to be communicated between the Oneworld Alliance and the Winner
to maintain the fair and equitable fuel pricing. The transparent
communication will be audited by an agreed third party, e.g. Ernst
& Young, to adjudicate this relationship if needed.
To provide a check and balance mechanism that is equitable to both
the Winner and the Oneworld Alliance the Oneprize Competition will
be judged by world renowned experts in the fields of Economic,
Social, and Environmental Science. This panel may disqualify the
winner at anytime if the winner fails the annual sustainability audit
required. In this case the winner will be required to repay the €75
million initial prize.
“We realise that climate change is perhaps the biggest long-term
challenge we face. It is important for the public to understand that the
atmosphere has no preferences whether emissions come from aviation or
agriculture, from China or the UK. But it does matter that cuts in those
emissions are achieved in the most economically sensible manner. This
message is often lost in the emotional headlines around the issue.”
- Martin Broughton, British Airways Chairman, British Airways 2007/2008
Annual Report, p6

Award Strategy
Outline of the strategy for the awarding of the cash
components of the Oneprize competition
Component 1
€75 million cheque presented to the Winner at the Oneprize award
ceremony for the purpose of leveraging news media to create a major
public relations event.
Component 2
In addition of the purchase price of the fuel itself, €1 million will be
awarded to the Winner each time €2 million is saved by a Oneworld
Member from negating the need to acquire EU emission allowances as a
direct result of the supplied Sustainable Aviation Fuel product until the
further amount of €175 million is awarded.
Total prize package €250 million
Therefore, fundamentally the supplier will see a €75 million up-front cash
prize plus an amount similar to a subsidy mechanism paid on supply until
the full value of the cash prize has be awarded.
This reward strategy is employed to secure the Winner to the Exclusivity
Clause and to improve the cash flow implications of the Oneprize Strategy
for Oneworld Members.
The process will be fully audited by an agreed third party (reputable
accountant) to ensure fairness and transparency between Oneworld and
the Winner.
“The properly structured prize literally creates the opportunity for almost,
what I call, off-balance-sheet risk taking; where a company or government
agency or individual can put up an audacious goal and, if it’s won, amazing.
They’re a hero. And if it’s not won, it’s no skin off their nose, so to speak”
- Peter Diamandis, Chairman and CEO of the X Prize Foundation, July 2009

Oneprize Strategy
Rollout Plan
The Oneprize Strategy will consist of 4 main phases:
Phase 1: Applications open
Phase 2: Winner selection
Phase 3: Implementation and operation
Phase 4: Business as usual
Phase 1: Applications Open
An office for the administration of the Oneprize Strategy will be
established at the Oneworld Alliance headquarters in Vancouver, Canada.
Its operation will be funded equally by all Oneworld Members. Operating
costs for this period are estimated to be €2.32 million per annum. The
Head of the Oneprize Strategy will report directly to the CEO of the
Oneworld Alliance. For resource flexibility the Oneprize Strategy office will
primarily be staffed by Oneworld Member employees on secondment. The
purpose of the office during the period will be to thoroughly evaluate and
review all applications submitted, to promote the initiative to the
community and to liaise with industry to encourage applications and
attract Sustainable Aviation Fuel development. All proposals will be
assessed against the sustainability criteria as well as typical jet fuel
procurement considerations.

Phase Two: Winner Selection
If an application passes ‘Phase One: Applications Open’ it will be elevated
to the ‘Phase 2: Winner Selection’ for review by the judging panel experts.
The judging panel will principally consist of a select group of reputable
experts in their respective fields of economic, social, and environmental
science brought together solely for the purpose of the review of an
outstanding Oneprize application. They will review the application
individually and then vote Yes/No to approving the applicant as the
Winner of the Oneprize Competition. It will be a high-hurdle consensus
vote. The judging panel will consist of two world renown representatives
of economic science (for example Paul Krugman, Jeffrey Sachs, two from
social science (for example Kofi Annan), two from environmental science
(for example Al Gore, Tim Flannery), a representative of the world youth
(for example the President of the U.N. World Youth Association), the
Oneprize Strategy creator as a technical advisor, and the Oneworld CEO
who will have veto power.
The purpose of the judging panel is to provide a check and balance
mechanism to the Oneprize Strategy selection process, protecting its
original high-integrity mission of securing and supporting only a fully
sustainable; economically, socially, and environmentally superior
Sustainable Aviation Fuel product. This is vital as it is likely that the
Winner’s product will go on to become a foundation product of the
Sustainable Aviation Fuel industry and a global benchmark against which
all other such products are judged. Additionally the judging panel experts
will add significant marketing potential which can be turned into financial
benefit whilst mitigating reputation risk and community perception
challenges.
Once a favourable review by the judging panel is complete the application
will be submitted to the CEOs of all Oneworld Members for their
ratification. The applicant will be kept up to date throughout this process
during which time the negotiation of the full terms of the Off-take
Agreement will be concurrently discussed. Following a successful outcome
the applicant will be notified and publicly announced as the Winner at the
Oneprize award ceremony.
Phase Three: Implementation and Operation
When a Winner is chosen the structure and purpose of the Oneprize
Strategy Office will transform to focus on the management and accounting
of the relationship with the Supplier and the high level accounting of the
Oneprize Strategy overall.
At the Oneprize award ceremony a cheque for Component 1 (€75 million)
of the €250 million prize package will be presented and the Off-take
Agreement will be signed by the Parties.
This historic award ceremony will provide the Winner (now known as the
Supplier) and the Oneworld Alliance with global recognition and resulting
positive marketing and political outcomes.

The Exclusivity Clause of the contract will naturally provide a stimulus
incentive for the Supplier to ramp-up production as rapidly as possible.
Tranches of the prize will be awarded to the Supplier in instalments of €1
million each time €2 million is saved by member airlines from negating
the need for the purchase of EU emission allowances as a result of the
‘zero rated’ SAF. The benefit of the value of the second half (€1 million) of
the money saved on each tranche will be divided according to the Ratio
amongst all Oneworld Members. Structuring the prize in this way means
that there is no issue or disincentive for Oneworld members to stall or
slow production scale-up.
To provide for the addition and/or subtraction of Oneworld Members
certain terms will be needed to allow for this to be done in a fair and
equitable manner. Therefore, if a new Member joins the Oneworld Alliance
they will be required to join into the Oneprize Strategy by contributing
towards the Oneprize according to a revised Ratio, which in turn allows
them to receive the beneficial outcomes of the Oneprize Strategy. If an
Oneworld Member quits the Oneworld Alliance their portion of the
Oneprize award according to the Ratio will be withdrawn. The terms of the
Oneprize Competition will permit the total cash pool to reduce by an equal
amount in this circumstance.

Phase Four: Business as Usual
After the expiry of the Off-take Agreement the Oneworld Alliance will
cease to have a formal contractual relationship with the Winner
(Supplier). At this point all Parties may implement negotiated fuel supply
cutover with any supplier/purchaser of their choosing. The Oneprize
Strategy will have achieved its mission and the associated significant
commercial benefit to the Oneworld Alliance.
“A prize is a familiar and easily understood concept that has a long history
of inspiring beneficial change”
- Jonathan Bays and Paul Jansen, McKinsey & Company report ‘Prizes: a
winning strategy for innovation’, July 2009

Initial Stakeholder
Analysis
Predicted perspectives of the major stakeholders on the Oneprize Strategy
Oneworld Member Airlines:
Perspective:
The Oneprize Strategy will significantly benefit all Oneworld Members as it
will reduce the cost of jet fuel for European Operations (key financial
advantage) compared to competitors and create a strong history-making
reputation-building opportunity (key marketing advantage).
The Oneprize Strategy will provide a sustainable competitive advantage
from the point of its announcement.
Long term, the Oneprize competition focuses Sustainable Aviation Fuel
value chains towards the Oneworld Alliance’s European hubs that will
provide benefits beyond the conclusion of the Oneprize.
The Supplier (Winner):
Perspective:
The Oneprize Strategy shall benefit the Winning supplier in many ways:
A firm demand multi-year Off-take Agreement for 100% of
production that will be signed prior to breaking ground strongly
improves the financial viability of the project. This takes out one of
the major variables of the business case that will be seen very
favourably by project financiers as demand and revenue can be
accurately forecast.
Receiving a large cash tranche upfront prior to breaking ground for
project construction will also be seen favourably by financiers and
will reduce the amount of capital that will be needed to fund the
project.
The Oneprize will attract resources, both intellectual and financial
towards the Sustainable Aviation Fuel industry that will assist in
rapidly reducing costs.
The Oneprize provides clear project goals for the Winner to work
towards, in turn reducing the risks involved with pioneering a
product for an untried and untested market.
The Oneprize clarifies the overall industry demand for Sustainable
Aviation Fuel, reducing project risk.
It is likely that the Winner’s product will go on to become a
foundation product of the Sustainable Aviation Fuel industry and a
global benchmark against which all other such products are judged,

allowing it to command a price premium after the conclusion of
Oneprize.
The break-even point for the Supplier improves as a result of Oneprize
Airlines will not adopt an alternative jet fuel unless the fuel cost per litre is
at parity with conventional jet fuel. However, if the physical properties of
the fuel product improve cost savings in another way, i.e. has a 5%
higher energy density or through better engine lubrication properties
which inturn reduce overall engine maintenance costs, airlines will be
willing to pay more per litre. Equally, if the physical properties the fuel are
worse and increase costs, i.e. worse lubrication properties increasing
overall engine maintenance costs, the airlines will pay less.
Indicative financial modelling shows that the unique structure of the
Oneprize with its Exclusivity Clause will be favourable to the Supplier in
the short to medium term and have minimal adverse effect on what would
have been the organisation’s long-term revenue forecasts were it willing
to accept higher risk associated with un-contracted demand. Overall,
therefore, quantified and qualified factors make the Oneprize attractive to
the Supplier in the short, medium and long-term.

The Oneprize’s one-way Exclusivity Clause will not adversely affect the
long-term revenue of the Supplier
Sustainable Aviation Fuel Producers
Perspective:
The Oneprize Strategy formalises the requirement for minimum
sustainability criteria for Sustainable Aviation Fuels that has previously
only been suggested by the Sustainable Aviation Fuels User Group
(SAFUG). As a result, it is expected that Sustainable Aviation Fuel
development efforts will be aimed at creating products that meet these
criteria rather than stop-gap efforts such as those fuel products that use
first generation biofuel feedstock types (such as corn, canola and other
food crops).
It is predicted that if a small Sustainable Aviation Fuel producer develops
a fuel system that can meet the stringent Oneprize conditions, this
company would likely sell the Intellectual Property to an incumbent
multinational conventional jet fuel producer that would have the resources
to develop the project in a shorter period of time.
The Oneprize Strategy will only accept one Winner, which will give that
organisation a large competitive benefit and likely set that organisation’s
product to be a global benchmark. However, it will also provide the overall
emerging Sustainable Aviation Fuel industry with credibility, which will
assist with its advancement. Therefore, the Oneprize Strategy is beneficial
for the advanced biofuel industry and it is expected it will have their
strong endorsement.

Incumbent Conventional Jet Fuel Producers
Perspective:
It would be assumed that the largest incumbent interests in this field
would ruthlessly act to protect ‘their’ market; however, lately many have
apparently begun to rethink their long-term strategies after realising that
without transitioning away from fossil fuels their future is finite.
For example in recent years two Super Majors (Shell and BP) have both
created large R&D departments investigating biofuels. Provided that
shareholders and customers demand biofuel and the financials stack up,
they will continue to fund the development of these types of fuel.
However, these companies are in a strategically difficult place; they want
to be the biofuel market leader to leverage the first mover advantage, yet
they want to do so without cannibalising demand for their more profitable
incumbent products.
The Oneprize will assist to accelerate these organisations through this
bottleneck, as it is this genre of companies that will be most competitive
for the Oneprize. This is a result of their established market dominance,
that when coupled with the right product would likely put them in strong
contention to become the Winner.
Crude Oil Extracting Interests
Perspective:
The creation of the Oneprize will be seen as an accelerated threat to the
market demand of conventional crude oil, and therefore may be
interpreted as a threat to traditional crude oil producing companies and
nations. Consequently, it is to be expected that these groups may try to
undermine, lobby and campaign to protect ‘their’ market. On the flipside,
the sustainability criteria pursued by the framework of the Oneprize
Strategy favour production to occur in environmentally damaged arid
regions. Thus, many crude oil extracting nations, particularly in the Middle
East, could embrace the opportunity to diversify into the new advanced
biofuel energy market.

Global
Perspective:
The Oneprize Strategy shall benefit the world in many ways. By
accelerating the development of a viable Sustainable Aviation Fuel
industry, and by contributing to the effectiveness of the European Union’s
Emission Trading Scheme’s core purpose - to reduce the impact of climate
change. The core global benefits can be categorised along triple-bottom-
line considerations-
Economic:
The Oneprize Strategy shall assist in establishing a viable Sustainable
Aviation Fuel industry. It shall provide a market changing catalyst for the
mega-scale commercial implementation of advanced biofuels for aviation.
It shall accelerate globalisation by reducing the cost burden of inevitable
carbon pricing on world transport and trade.
Social:
The Oneprize Strategy shall assist to establish a new market and in turn
create new jobs. The UN IPCC has shown that there will be a global net
increase in jobs as a result of tackling climate change.
The Oneprize sustainability criteria encourages the selection of a feedstock
that shall be able to be grown in most of the worlds regions; most
efficiently in sparsely populated areas with low labour costs, which will
assist to spread and lift overall wealth per capita globally.
Environment:
The Oneprize shall create a catalyst for the large scale commercial
implementation and market adoption of advanced biofuels for aviation.
This will permit more carbon to be left permanently sequestered in the
earth and out of the atmospheric carbon-cycle.
“We have put corporate responsibility at the centre of our business priorities and
our ambition is to be a leader in this field. Our industry’s most pressing corporate
responsibility is to reduce the carbon emissions from its operations.”
- Willie Walsh, CEO, British Airways 2007/2008 Annual Report

Risk Register
A list of key risks and associated mitigation strategies
At this initial stage there are no ‘show stoppers’, although further evaluation is
needed for verification.
Internal Risks
The financial benefits outlined in this concept plan are ‘in the ballpark’
with further data and analysis needed for accurate quantification.
Analysis needs to be completed to forecast required fuel volumes to
meet threshold.
Strengthening of specific aspects of the financial reporting bond
(relating to fuel volume consumption only) between Oneworld
Members will be required as the Oneprize Strategy is adopted. These
bonds may need to be monitored and audited by an agreed third
party, accountant, to ensure transparency. This will need to be done
carefully so as not to break any anti-competitive or anti-trust laws of
any regulatory body.
After wide consultation it may be decided that incremental
development ‘stage gate’ prizes may be more effective than a single
large prize with purchase subsidies. If this is the case the purpose and
mission will remain but other parts of the Oneprize Strategy may need
to be adjusted slightly.
On initial inspection it is believed that some Oneworld Members may
not have the appetite to adopt the Oneprize Strategy despite financial
benefits due to relationships with governments of oil producing
nations (e.g. Royal Jordanian). The Oneprize Strategy loses its
feasibility and effectiveness without all Members on board. A majority
style vote could overcome this.
Following detailed economic modelling during the feasibility study it
may be deemed that to maximise the effectiveness of the Oneprize’s
secondary purpose to accelerate the development of the Sustainable
Aviation Fuel industry that the option of ‘voluntary cessation of the
Oneprize’ should be withdrawn. This could lead to an unfavourable
situation for Oneworld Members should one or more Oneworld
Members go bankrupt, as the others would be forced to make up the
shortfall in prize monies. To mitigate against this risk insurance
investments should be employed to the Oneprize will be awarded.

External Risks
The Oneworld Alliance may need to lobby the European Commission to
ensure that the EU ETS continues with its plan to include the aviation
industry within scope from mid-2012 so that the competitive
advantages for Oneworld member airlines that the Oneprize Strategy
seeks are realised with minimal timing risk.
Economic evaluation of the forecast price of carbon on the carbon
market between 2012-2017 should be conducted to ensure that the
Oneprize Strategy can achieve its mission.
It is assumed the Supplier will have the means and intention to
protect their Intellectual Property regarding their fuel product for at
least the duration of the Oneprize Exclusivity Clause, making them the
sole producer. This will minimise the likelihood of a similar competing
product being created that would reduce the benefit to the Oneworld
Alliance of the Oneprize Strategy.
The ability for industry to develop and commercialise a Sustainable
Aviation Fuel product that meets all Oneprize expectations and
specifications prior to 2012 is judged to be extremely limited,
however, if this situation were to arise some alteration to the Oneprize
Strategy would be needed. It therefore needs to be confirmed that
this is virtually impossible.
A global carbon pricing scheme, such as the one to be discussed in
Copenhagen at COP15 later this year, would require some adjustment
to the Oneprize Strategy (mainly increasing size and scope) however,
when adjusted this would actually further improve the commercial
benefits of the Oneprize Strategy. Therefore, to mitigate this, a clause
should be included in the Oneprize Competition terms to allow
flexibility for this rearranging and expansion in size and scope. It is
assumed that a global carbon-pricing scheme will take many years to
implement and therefore should not be waited for.
An unethical situation may arise whereby conventional jet fuel
suppliers may collude or lobby Oneworld Members to drop the
Oneprize Strategy. However, it should be noted that such suppliers
will likely be the leading contenders for the Oneprize therefore it will
be in their general interest to support and compete for the Oneprize.
The Oneprize Strategy still places a requirement for the Sustainable
Aviation Fuel product to be priced competitively with conventional jet
fuel from the outset. The price of Sustainable Aviation Fuel must be
locked in price-parity to each purchasing Oneworld Member’s average
annual forecast jet fuel ‘in-wing’ per litre cost, to be updated monthly,
for the duration of the Exclusivity Clause. However, this will provide a
benefit to the Supplier because as a result they will be able to
accurately forecast demand and revenue and thereby manage supply

and costs very specifically and efficiently, and will also benefit the
Oneworld Members as the Oneprize Strategy will be more likely to
succeed in the overarching mission.
A reduction in the volatility of oil markets would allow for more
confidence in the annual forecast jet fuel cost for that period that
gives rise to the requirement for competitive pricing of Sustainable
Aviation Fuel. The Oneworld Alliance should lobby the relevant powers
to adopt strategies that reduce oil market volatility. This risk will be
covered by the annual ‘settling up’ action between the Parties, and
therefore largely passed onto the Supplier. Diversifying the aviation
fuel market with the inclusion of Sustainable Aviation Fuel will reduce
market price volatility.
As it stands today the OPEC cartel can, to some degree, control the
global price of oil and as such could possibly conduct predatory pricing
whereby if it were to flood the market with supply of conventional
fossil crude oil it could push Jet A-1 prices so low as to lead to the
bankruptcy of the Supplier who would be unable to remain viable at
such low prices. However, as the world’s finite reserves of ‘easy’ fossil
oil continue to be depleted, and the demand for liquid transport fuels
continues to increase it is clear that over the long term, the price for
conventional fossil crude oil will be forced to exponentially increase
according to the laws of supply and demand. The Oneprize Strategy is
set up in such a way that either way this risk is borne by the Supplier,
not the Oneworld Alliance.
A possibility exists that an airline or other transport group may seek to
produce a similar prize for a similar purpose that does not have such
stringent triple-bottom-line requirements. This product may lack long
term future focussed ideals but may be able to produce a cheaper
alternative fuel product as a result. This would confuse the consumer
and dilute the effectiveness of the marketing potential of this strategy.
This weakness will be overcome by having a larger prize purse and
using extremely well known and highly respected competition judges
so that consumers will be able to distinguish the Oneprize credibility
and superiority over its competitors.
R&D, Procurement, and Distribution Supply Chain consultants should
be employed to model the expected timelines and overall outcomes of
the Oneprize Strategy. It needs to be confirmed that the Oneprize
Winner is the ‘right’ company and that it will not be gazumped by a
better and cheaper producer before the mission of the Oneprize
Strategy is realised. Economic modelling and other forecasts should
confirm that it is highly unlikely that the Suppliers competitors will be
able to produce a better product within the short term. Due to jet
fuel’s homogenous nature, specifications, and market based pricing a
fuel that is priced cheaper than market parity is highly unlikely.
Several other airlines are actively investigating Sustainable Aviation
Fuels. It is apparent that their concept plans are capital intensive and
high risk- and can expect limited financial benefit (mainly via

marketing potential) without carbon pricing schemes operating in their
respective regional markets.
The Virgin Group appears to have a strong forward thinking agenda
towards producing a similar Sustainable Aviation Fuel. Richard
Branson has committed all profits from his transport businesses to
Virgin Fuels, investing in clean renewable technologies. This
organisation does not appear to be seeking to exclusively secure
Sustainable Aviation Fuel producers at this time. Although Richard
Branson is running an exciting Virgin Earth Challenge with a $25
million prize purse, the Virgin Group alone is unlikely to be able to
compete with the Oneprize. The Oneworld Alliance’s transport industry
dominance and economies of scale are such that only the two other
major air transport industry alliances, Skyteam and Star Alliance,
could realistically compete with the Oneprize.
A risk exists that competing airlines alliances, Skyteam or Star
Alliance could announce a similar strategy to the Oneprize but before
the announcement of the Oneprize, which would make the Oneprize
Strategy untenable. This can be mitigated by quietly, rapidly and
accurately evaluating and developing this concept.

Next Steps
The CEO of an Oneworld Alliance member must endorse this plan and take it to
the Oneworld management committee meeting for initial consideration.
Ask the Oneworld management organisation to use actual internal data from all
oneworld airlines to evaluate the opportunity.
As British Airways stands to gain the most from this concept it is suggested that
they lead this effort.
This is a global project for the commercial benefit of the Oneworld alliance
member airlines.
“We believe that more institutions should harness the power of this flexible,
expressive instrument in their efforts to generate social and business benefits.”
- Jonathan Bays and Paul Jansen, McKinsey & Company report ‘Prizes: a winning
strategy for innovation’, July 2009

Appendices

Aviation and our Environment:
Key Background Facts
“Aviation is responsible for the livelihoods of 32 million people around the world,
and accounts for some US$3.56 trillion – or 7.5% of global GDP – in economic
activity.”ix
“Today, aviation is responsible, according to the UN International Panel on
Climate Change (IPCC), for around 2% of global carbon emissions – representing
some 673 million tonnes of carbon in 2007. The industry is expected to account
for around 3% of global emissions by 2050.”x
Calculations for oneprize concept show the Oneworld Alliance member airlines
produced approximately 100 million tonnes of CO2 in 2008. That equates to
approximately 15% of that produced by all of the aviation industry. It follows
therefore; that in 2008 the Oneworld Alliance produced approximately 0.3% of
the world’s man-made CO2 emissions.
“Aviation consumes 2% of all fossil fuels burnt. This represents 12% of the fuel
consumption of the entire transportation sector, to be compared with 80%
dedicated to road transport.
The most common fuel is a kerosene/paraffin oil-based fuel classified as JET A-1,
which is produced to an internationally standardised set of specifications.
In 2005, the total Jet A-1 fuel consumption represented 55 billion US Gallons or
208 billion litres. This corresponds to average fuel consumption per flight hour of
970 US gallons or 3 metric tonnes.
Each tonne of fuel burnt in the air or on the ground produced 3.16 tonnes of CO2.
Therefore, 55 billion US gallons of jet-fuel represent 540 million tonnes of carbon
dioxide.”xi
“The challenge is how to minimise and even eliminate the environmental impacts
of aviation whilst still retaining its unchallenged economic and social benefits.”xii

Carbon Intensity
Whilst most airlines are improving fuel efficiency and therefore reducing carbon
intensity, the overall long term trend is for continuing growth of overall capacity
and fuel consumption leading to a continuation of growth of the global air
transport industry’s carbon footprint.
See the graph below that highlights Qantas’ reduction in carbon intensity.
Qantas, like most major airlines, continues to reduce its carbon intensityxiii
Yet, due to capacity growth, overall carbon emissions from airlines are expected
to continue to increase
Diagrammatic principle of the European Union Emissions Trading Scheme showing forecast growth in
the aviation industry’s European CO2 footprint xiv

Emission Trading Schemes: Basic Theory
What are they and how do they work?
“An Emission Trading Scheme (ETS) is an economic-driven measure used to
control emissions by providing incentives for achieving reductions. It is
sometimes called a ‘cap and trade’.
A central authority (usually a government or international body) sets a limit or
cap on the amount of emissions. Companies or other groups are then issued
emission permits (also known as allowances), which limit them to a certain level
of total emissions.
Companies that need to increase their emissions (e.g. because of traffic growth)
must therefore buy permits from those who emit less. The transfer of allowances
is referred to as a trade. In effect, the buyer pays a charge for emitting beyond
its cap, while the seller is rewarded for having reduced emissions below the cap /
allowance allocated.
In theory, therefore, those that can most easily reduce emissions most cheaply
will do so, achieving reductions at the lowest possible cost to society. Since
emissions are traded on the open market, the price can rise and fall. The central
authority may increase or reduce the total number of permits available if they
wish to decrease or increase the price; however, it should be considered that this
may lead to some market instability and uncertainty during this changeover
period.
In the case of the European Union’s proposed scheme, as it covers aviation, the
emission being traded is CO2 with the cap set to the average of 2004-2006
emissions.”xv
Emissions Trading Schemes are more economically efficient than, and therefore
preferable to, carbon tax mechanisms, to reduce emissions in the lowest cost
manner.

Future carbon pricing schemes
The carbon pricing schemes currently under consideration or already in
development as of 2009
• The European Union Emission Trading Scheme – As discussed and considered
within this document
• The Australian Emission Trading Scheme – Following publication of a Green
Paper in July 2008, the Australian Government is now considering establishing a
domestic emission-trading scheme, with the aim of passing the necessary
legislation in late 2009 or early 2010.
• Japan Cap and Trade – In February 2008, Japan announced that it intended to
put in place a cap and trade scheme, which would allow Japan to set its own
national goal for reducing greenhouse gas emissions after 2012.
• New Zealand ETS – In September 2008, the New Zealand Government passed
legislation for the introduction of the New Zealand Emission Trading Scheme,
which will also cover liquid fossil fuels and transport from 2011 (the original
proposal was 2009).
• US Federal proposal – The American Clean Energy and Security Act 2009, also
known as the Waxman-Markey Bill, has a similar aim for a cap-and-trade plan of
greenhouse gases to address climate change. The US House of Representatives
approved this bill on 26 June 2009. This bill is yet to be approved by the US
Senate. US President Obama has pledged to implement an economy-wide cap-
and-trade program to reduce greenhouse gas emissions by 80% by 2050.
• A Global Carbon Price – To be discussed at the Copenhagen Climate Summit
late 2009. Little detail is known publically. It is predicted that it will take many
years to negotiate, develop and implement. The aviation industry may need to
develop its own global sectoral approach if it wishes to avoid an undesirable
piecemeal domino approach to carbon pricing.

Other Key Quotes
Quotes from Oneworld airline members, other relevant sources and important
background information
Some recent prizes go beyond promoting specific innovations. By emulating
market incentives and exposing latent demand, these competitions attempt to
stimulate an entire market. The $10 million Ansari X PRIZE, awarded in 2004, is
celebrated example”
“I’d love to see the day when the world’s biggest challenges – whether it’s
poverty, hunger, pollution, environmental, energy issues – have these mega-
prizes out there that sway where graduate students do their research, where
companies do R&D, where people aspire to go to attack these challenges not only
to win the money and the glory but the thanks of humanity.”
- Peter Diamandis, Chairman and CEO of the X Prize Foundation, July 2009
“We believe carbon trading is the most effective way of controlling emissions in
an economically sensible manner. So when the UK Government endorsed the
introduction of aviation into the EU Emissions Trading Scheme it should have
been a decision to welcome. But we were disappointed that the implementation
date was delayed until 2012 and not confined to intra-EU airlines.”
- Martin Broughton, British Airways Chairman, British Airways 2007/2008 Annual
Report, p6
“Our industry’s most pressing corporate responsibility is to reduce the carbon
emissions from its operations. The recent agreement between the International
Air Transport Association and the airlines to a joint commitment on this is an
important step forward for our industry. We continue to be leaders in this field.
We are the only airline to have taken part in an emissions trading scheme. Since
1990 we have cut our emissions by 28 per cent and in 2007/08 set ourselves the
new target of cutting our CO2 by a further 25 per cent by 2025.”
- Willie Walsh, CEO, British Airways 2007/2008 Annual Report, p9
“We have put corporate responsibility at the centre of our business priorities and
our ambition is to be a leader in this field. During the year we announced that
Silla Maizey – formerly Head of Procurement – had been appointed as our first
ever Head of Corporate Responsibility, reporting directly to me. We are
determined to grow. But we are equally determined to grow responsibly, and I
hope Silla’s appointment will be seen as a statement of our serious intent.
Undoubtedly, climate change is our most significant challenge in this respect. Our
industry gets pilloried by some environmentalists for its contribution to global
warming. We don’t agree with their analysis, but I want to be very clear that we
do intend to be in the vanguard in tackling this issue.”
- Willie Walsh, CEO, British Airways 2007/2008 Annual Report, p11
“Failure to adopt an integrated environmental strategy could lead to a
deterioration in our reputation and consequential loss of revenue. An increased

focus on corporate responsibility and a published emissions reduction target will
help deliver the refocused strategy.”
-Section ‘principal risks and uncertainties’, British Airways 2008 Annual Report,
p36
“Successful prize sponsors think strategically by investing significant resources in
prize development long before announcing a purse”
“We know that the sustainability agenda is much more than just the viability of
the individual businesses. It’s about how we shape our collective destiny as a
society. At Qantas we accept the urgency of the challenge”
- Geoff Dixon, CEO, Qantas Airways Sustainability Report 2008, p1
“We have made good progress in implementing a comprehensive climate change
programme. This includes fuel and energy efficiency initiatives, support for
effective policy measures to address absolute emissions growth, voluntary carbon
offsetting and support for scientific research. We have developed a company-wide
target to improve carbon efficiency, expressed in grams of CO2 per passenger
kilometre (gCO2/pkm), by 25 per cent from 111 grams in 2005 to 83 grams in
2025. In 2007 our performance was 110 gCO2/pkm.
This goal is now one of our overall corporate goals, signalling the importance of
climate change to our business. During the year we have carried out an extensive
assessment of our carbon footprint, applying the greenhouse gases (GHG)
protocol corporate standard guidelines. Our carbon footprint in 2007/08 was 17.7
million tonnes. In January 2008, we launched a significant upgrade to our
passenger carbon offset scheme introducing a ‘one click’ highly visible option into
the ba.com booking process. This scheme helps fund UN certified emission
reduction initiatives in developing countries, such as clean energy projects in
China and Brazil. We continue to work to secure the timely and pragmatic
inclusion of aviation CO2 emissions into the EU Emissions Trading Scheme in
preference to aviation taxes which we believe are ineffective in tackling climate
change. We are actively leading the development of a global agreement in
aviation climate policy – both within industry (e.g. at IATA and AEA and as a
leading member of the UK Sustainable Aviation Group) and in broader global
forums such as the World Economic Forum and the Gleneagles Climate Change
Dialogue, and the European Round Table of Industrialists. We are also supporting
a number of climate change scientific research projects. These include work led
by Cambridge University to investigate research pathways for improving
understanding of non-CO2 aircraft climate effects, the European Commission
IAGOS project which is investigating the feasibility of using aircraft to collect
atmospheric data in-flight and work by the Global Canopy Programme to prevent
deforestation – a large source of climate change emissions.”
-Section ‘corporate responsibility’, British Airways 2008 Annual Report, p48
“Many aspects of the Company’s operations are subject to increasingly stringent
environmental regulation. Concerns about climate change and greenhouse gas
emission, in particular, may result in the imposition of additional legislation or

regulation. For example, the EU recently approved measures that impose
emission limits on airlines with operations to, from or within the EU as part of an
emission trading system beginning 2012. The Company is currently assessing the
potential costs of the EU measures. Such legislative or regulatory action by the
U.S. or foreign governments currently or in the future may adversely affect the
Company’s business and financial results.”
-American Airlines(AMR Corporation) 2008 Annual Report, p7
“• We published our 2007 Corporate Social Responsibility Report in June,
outlining the progress made last year in areas such as environmental initiatives,
community activities and requirements for procurement and supply chains. We
also outlined our agenda items for the current year, setting targets for each of
the key areas. The 2007 report is available online at www.cathaypacific.com. We
are currently working on our 2008 Corporate Social Responsibility Report.
• A Corporate Social Responsibility supplier Code of Conduct was implemented
and published on our Intranet.
• The Business Environmental Council carried out an audit of Cathay Pacific’s
headquarters for the Clean Air Charter Certification Scheme in November. The
results were announced in February 2009 certifying our compliance with the
scheme.
• Together with Dragonair we continue to promote our “FLY greener” carbon
offset programme, the first of its kind to be launched in Asia. The carbon credits
are currently being sourced from a large wind farm near Shanghai. In the first
year, 3,752 tonnes of carbon dioxide were offset by passengers, including other
corporates in Hong Kong, through “FLY greener”, the majority using Asia Miles to
pay for their offsets. In 2009, we will look at ways to further promote “FLY
greener” to the public.
• We also offset carbon emissions associated with staff business travel at the
airline. In 2008 we offset 11,814 tonnes of carbon dioxide at a cost of
approximately HK$900,000.
• We will launch new regional projects for our carbon offset initiatives in 2009.
• Our overall fleet efficiency continues to be boosted by the introduction of newer,
more fuel-efficient aircraft. For example, the new Boeing 747-400ERF freighter is
16% more fuel-efficient than the Boeing 747-200F “Classic” freighters that are
now being retired. The use of the new Boeing 777-300ER on our North Pacific
routes is resulting in up to 28% efficiency gain compared to the aircraft it
replaces. The phasing out of our older “Classic” freighters has also reduced our
fuel burn and associated emissions.
• Cathay Pacific sponsored the second “Greener Skies“ forum in Hong Kong in
February, organised to form an industry response to the global warming issue.
• Biodegradable plastic bags started to be used inflight from September and we
now also recycle plastic cups from Economy Class.
• Six of our staff were nominated as “Earth Champions” in the Hong Kong stage
of the Earth Champion Quest.
• Cathay Pacific is part of a new industry coalition, the Aviation Global Deal (AGD)
group, which in February 2009 called for CO2 emissions from international
aviation to be included in a new global climate deal. The agreement will be
negotiated by world leaders at the United Nations climate summit in Copenhagen
in December.
• In November, employees from the airline were able to see the work of The
Nature Conservancy at first hand during a field trip to Yunnan Province. Dragonair
supports the work of the organisation through its “Change for Conservation”
inflight fundraising programme.”

-Cathay Pacific 2008 Annual Report, p10
“Our company will make a significant contribution to the search for a viable,
sustainable, second-generation bio fuel for commercial use by the aviation
industry by conducting a demonstration flight towards the end of this fiscal year.”
-JAL 2008 Annual Report, p12
“In June 2008 JAL agreed, jointly with Boeing and Pratt & Whitney, to make a
2nd generation bio fuel demonstration flight (JAL Biofuel Flight) using bio fuel
from non-food crops, its purpose being to encourage the development of
environmentally conscious alternative fuels. We intend to make Asia’s first bio
fuel flight before the end of FY2008. The fuel tanks will be filled with a bio fuel
mix (a mixture of bio fuel and conventional jet fuel) and, separately, conventional
jet fuel, so that during the flight one of the four engines of a Boeing 747 uses bio
fuel, and the other three use normal jet fuel. So as not to impose an additional
burden on the environment and human development, the bio fuel to be used will
be selected from among bio fuels that are not made from food crops, so-called
second-generation bio fuels.”
“As a symbol of the JAL Group’s commitment to the environment, since June
2008 the Group has been operating a “JAL Eco Jet” with its tail painted green.
Through the JAL Eco Jet, we plan to raise people’s awareness of the importance
of the Earth’s environment.”
JAL “Eco Jet” Boeing 777-200, JAL 2008 Annual Report, p14
“The Global Environment Committee, chaired by the President & CEO of JAL, was
set up in April 2008 to take over responsibility from the Environmental Sub-
committee (under the CSR Committee) for responding to society’s demands for
corporate action with regard to environmental issues.”
“The aviation industry reportedly is responsible for some 2% of global emissions
of carbon dioxide, and as a member of that industry we consider environmental
conservation to be an important management issue. Accordingly, to bring
ourselves into harmony with the global environment we will be taking a variety of
steps to reduce the environmental footprint of our operations, including cleaning
aircraft engines more frequently, reducing the weight of on-board items, and

employing environmentally-conscious operating methods, including as regards
aircraft speeds and altitudes to ultimately increase our fuel efficiency and
consequently help us in reducing our total CO2 emissions.”
-Haruka Nishimatsu, JAL Group CEO, JAL 2008 Annual Report, p6
“I consider the very basis of the JAL Group’s strategy to be a total dedication to
safety and security, the assurance of punctuality, ongoing implementation of the
Premium Strategy, and the provision to customers of more attractive and
comfortable air travel. This will also contribute to the harmonious development of
society, and help enable us to fulfil our responsibilities to society as a corporate
citizen.”
-Haruka Nishimatsu, JAL Group CEO, JAL 2008 Annual Report, p8
“As regards the initiatives we have taken as a socially responsible company, the
Corporate Responsibility framework has been reviewed to adapt it to the new
directives of the 2009-2011 Strategic Plan and prevailing best practices on the
market. The framework establishes the guidelines for action in aspects such as
environmental and social performance and the company’s stakeholder
engagement.
Iberia’s efforts in this regard have led to its simultaneous inclusion in the
selective Dow Jones World and European Sustainability Indexes and, for the first
time, in the FTSE4Good IBEX. All these indexes recognise the best practices in
Corporate Social Responsibility and are a value added for us and motivation to
continue improving every day.”
Fernando Conte, President of Iberia, 2008 Annual Report, p4
“Iberia’s mission is to offer air transport, airport and aircraft maintenance
services that live up to the expectations of our customers and create economic
and social value on a sustainable basis.
Iberia seeks to become the leading company in terms of customer satisfaction in
its strategic markets (Latin America, Europe and Domestic), and to offer the
optimal price/service quality relationship. Iberia wishes to offer its shareholders
notable and sustained profitability and strives to attain the maximum professional
development of all its employees.
Iberia endeavours to be recognised for its transparency and its firm social and
environmental commitment. Accordingly, the Company is committed to entities
that implement social cooperation projects and improve living conditions by
promoting the involvement of its customers and suppliers and counting on the
active participation of its employees. Also, Iberia pursues a global environmental
protection policy that includes all its activities, both on the ground and in flight.
Iberia is committed to innovation, ongoing improvement and management
excellence as key tools to create value and guarantee the future of the Company.
In recognition of the actions implemented by the Company in this field, in 2008
Iberia simultaneously joined the most prestigious stock market indexes; the
select European Dow Jones Sustainability STOXX Index and the Dow Jones
Sustainability Index World and the FTSE4Good IBEX. These indexes select the
companies with the best practices in economic, social and environmental matters,
of which only three are airlines.”
- Iberia 2008 Annual report, p60
“As regards flight operations, the reduction of the average age of the fleet
through the renewal of aircraft (mainly the McDonnell-Douglas aircraft), the
adoption of new operational measures, and the improvements obtained in flight
programming and the load factor enabled Iberia, for yet another year, to reduce
sound emissions and emissions affecting climate change. These improvements

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