Air travel has been a growth industry over the past decade, and especially for the past five years. Consumers have taken to the skies more often, part of a broader shift in discretionary spending away from "stuff" and toward travel and other experiences. It certainly hasn't hurt that inflation-adjusted airfares are near record lows in the U.S. thanks to the rapid growth of budget carriers. U.S. airlines carried more than 800 million passengers on domestic routes during the 12-month period that ended in September, up from a little more than 600 million a decade earlier.

However, "flight shaming" represents a rising risk to this growth trend. As the public becomes more aware of the environmental impact of air travel, some consumers have resolved to try to fly less frequently, or even stop doing so altogether.

Now, JetBlue Airways (NASDAQ:JBLU) hopes it has an answer to the concerns of environmentally conscious travelers. Last week, the trendy low-fare carrier announced that it will offset the carbon emissions for all its domestic flights starting in July 2020.

A Jetblue Airways plane preparing to land

JetBlue will go carbon-neutral for domestic flights later this year. Image source: JetBlue Airways.

What JetBlue is doing

JetBlue has already been offsetting some of its carbon emissions through a partnership with Carbonfund.org. It will now expand that relationship while also partnering with EcoAct and South Pole on additional carbon offset projects.

Beginning in July, the airline expects to offset a total of 15 billion to 17 billion pounds of carbon dioxide emissions annually -- equivalent to the emissions from all of its domestic flights, and little over 70% of its global capacity. JetBlue plans to fund a variety of carbon offset projects, with a particular focus on forest conservation, landfill gas capture, and solar- and wind-power plant construction.

In addition, JetBlue will invest in reducing its emissions -- or at least in mitigating the impact of the company's growth. Among other things, it will use renewable jet fuel (blended with regular jet fuel) on flights from San Francisco beginning later this year. This sustainable fuel has a carbon footprint that is as much as 80% lower than traditional fossil-fuel-derived jet fuel, according to the company.

Finally, JetBlue will dramatically improve its fuel-efficiency thanks to the purchase of nearly 150 next-generation aircraft it has ordered for delivery over the next six years. Most notably, the 70 Airbus A220-300s it has on order will be up to 40% more fuel-efficient than the aircraft they will replace.

The cost should be manageable

JetBlue didn't say how much it will cost to offset its domestic carbon emissions, but the figure's not likely to break the bank. Carbonfund.org sells air travel offsets to individuals for as little as $10 per metric ton of carbon dioxide. Based on that price, JetBlue's targeted offset purchases would cost $70 million to $80 million before taxes. That would reduce annual earnings per share by a maximum of $0.20 -- less than 10% of analysts' consensus estimate for 2020 EPS of $2.38.

The actual net cost is likely to be considerably lower. For one thing, Carbonfund has to cover its overhead costs and fundraising costs out of individual donations, so the impact per dollar should be higher for a company willing to spend tens of millions of dollars on carbon offsets.

Additionally, in the press release announcing this initiative, the company stated: "JetBlue will offer ways for the airline's customers and communities to connect with the carbon offsetting projects JetBlue is engaging with." This likely means it will make a bigger push to persuade individual customers to offset the carbon impact of their flights, thus passing some of the cost of going carbon neutral along to willing customers directly.

Becoming the first U.S. airline to offer carbon-neutral flights could be a great strategy for JetBlue. As noted above, the net cost will likely be quite modest relative to its total earnings power. And being recognized as more environmentally friendly than its peers could pay off in a big way if it increases customers' loyalty. (Notably, JetBlue's two largest markets by far are the liberal bastions of New York City and Boston.) It will be interesting to see how this initiative plays out over the next few years, and if it seems to drive an increase in customers' preference for JetBlue.