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  • campus frysln

    CENTRE FOR SUSTAINABLE ENTREPRENEURSHIP

    CSR REPORTING OF THE EUROPEAN LOW-COST AND FULL-SERVICE

    CARRIERS: A QUALITATIVE CONTENT ANALYSIS

    Daniel Rost

  • CSR reporting of the European low-cost and

    full-service carriers: a qualitative content

    analysis

    MASTER THESIS

    11/05/2016

    Author:

    Daniel Rost, s2337746

    d.rost@student.rug.nl

    Supervisor:

    Dr. Gjalt de Jong

    University of Groningen

    Faculty of Economics and Business

    MSc in International Business & Management

  • 1

    Abstract

    The focus of this study was to qualitatively analyse the disclosures of corporate social

    responsibility (CSR) practices by the growing low-costs carriers (LCCs) and the established

    full-service carriers (FSCs) within the commercial European passenger aviation industry, in

    order to ascertain the levels of implementation of socially responsible behaviour as reported

    by the carriers with varying business models. To achieve this, the study used a comparative

    research design and a qualitative content analysis of airlines multiple CSR disclosures.

    Mostly in line with expectations, the study revealed generally low levels of CSR adoption

    among carriers, with LCCs reporting less extensively on their CSR practices than FSCs in

    terms of both the amount of reporting as well as content-wise. The study also found that all

    carriers address individual dimensions of CSR to an unequal extent in their disclosures, with

    the most attention paid to the social dimension of CSR.

    Key words: corporate social responsibility (CSR), sustainability, airline industry, low-cost

    carriers (LCCs), full-service carriers (FSCs), reporting, disclosures

  • 2

    Acknowledgment

    I would like to express my deep gratitude to my supervisor Dr. Gjalt de Jong for his support

    and guidance through the process of writing this thesis. His professional approach and

    provided feedback throughout the research project were both very helpful and greatly

    enhanced my learning experience.

    Groningen, 11th of May 2016

    Daniel Rost

  • 3

    Contents

    1. Introduction............................................................................................................................. 4

    2. Literature Review .................................................................................................................... 8

    2.1. Corporate Social Responsibility (CSR) and Sustainability ................................................... 8

    2.2. The Triple-Bottom Line .................................................................................................. 10

    2.3. Greenwashing................................................................................................................. 12

    2.4. Views of CSR................................................................................................................. 13

    2.5. Stakeholder Theory ......................................................................................................... 15

    2.6. Airline Business Models .................................................................................................. 16

    2.6.1. Full Service Carriers (FSCs) ....................................................................................... 16

    2.6.2. Low-Cost Carriers (LCCs) .......................................................................................... 17

    2.6.3. Growing Importance of LCCs ..................................................................................... 18

    2.7. Working Propositions...................................................................................................... 19

    3. Methodology ......................................................................................................................... 21

    3.1. Research Design ............................................................................................................. 21

    3.2. Methods ......................................................................................................................... 22

    3.3. Sample and Data ............................................................................................................. 23

    4. Analysis and Findings ............................................................................................................ 25

    4.1. Main Empirical Findings ................................................................................................. 25

    4.2. Annual Reports............................................................................................................... 26

    4.3. Stand-alone CSR Reports ............................................................................................. 26

    4.4. CSR Related Websites .................................................................................................... 27

    4.5. Extent of CSR Disclosure ................................................................................................ 28

    4.6. Content Analysis of CSR Disclosures............................................................................... 28

    4.6.1. Environmental Results ................................................................................................ 29

    4.6.2. Social and Economic Results ...................................................................................... 33

    5. Discussion and Conclusion ..................................................................................................... 39

    5.1. Added Value of This Study.............................................................................................. 43

    5.1.1. Theoretical Implications ............................................................................................. 43

    5.1.2. Implications for Practice and Policy ............................................................................ 45

    5.1.3. Limitations and Implications for Future Research......................................................... 46

    References ................................................................................................................................. 48

    Appendices ................................................................................................................................ 55

    Appendix 1 Figures .............................................................................................................. 55

    Appendix 2 Tables ............................................................................................................... 57

    Appendix 3 Sample Introduction ........................................................................................... 64

  • 4

    1. Introduction

    In the current era of globalization, civil aviation plays an important role in peoples

    everyday lives. As businesses are being established globally across borders, the need for air

    travel is evident. Thanks to its ability to reach faraway destinations in only matters of hours,

    travelling by plane became popular for both business and leisure travellers. Recent growth in

    civil aviation industry reported by International Air Transport Association shows that the

    industry has more than doubled in the past decade, from US$369 billion to US$746 billion.

    This growth has been mainly driven by low-cost carriers (LCCs), which are now estimated to

    control about 25% of the worldwide market (Clayton & Hilz, 2015). After the deregulation of

    the aviation industry, the entrance of LCCs significantly increased the competition in the

    industry, previously mostly dominated by full-service carriers (FSCs). This is observed

    mainly on regional routes, such as within Europe, as the low-cost model is currently being

    primarily applied on short-haul regional or what are being termed point-to-point routes.

    However, recently, attempts to enter even long-haul flights market by LCCs are increasingly

    being observed. Overall, LCCs appear to influence the industry greatly, often forcing FSCs to

    adjust their operations in many aspects.

    In the past, companies did not pay too much attention to sustainability or society at

    large and businesses operated basically as long as they covered the first two stages in

    Carrolls (1991) pyramid of Corporate Social Responsibility (CSR) being profitable and

    respecting the law. This meant that firms were not held accountable for using public goods

    such as polluting the air or water as a result of their operations. Despite there still not being

    uniformly enforced legal obligations for companies to internalise these externalities, things

    are gradually changing now and some companies are increasingly becoming aware of them,

    progressing towards the top of the Carrolls pyramid while engaging in sustainability and

    CSR efforts or at least claiming to do so.

    The size and global reach of MNEs and the perception of them as drivers of

    globalization, bound them to have significant influence on society (Kolk, 2007). Furthermore,

    the recent rise of social media and IT technology, made it easier to widely publicize corporate

    scandals and failures, which inherently raised debates on and concerns about the roles large

    firms paly in a society (Jobber & Fahy, 2012). While the regulatory environment and firms

    corporate governance arrangements still only

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