News Backgrounder
Airlines urged to share more critical information
The world’s airline leaders debated the perennial issues of rising charges, changing global economic conditions and infrastructure pressures at the International Air Transport Association’s (IATA) 73rd Annual General Meeting in Mexico last month, but recent events took security to the top of the agenda.
July 1st 2017
Security and issues surrounding its implementation at airlines and airports was the most pressing subject of discussion at the International Air Transport Association’s (IATA) 2017 annual general meeting last month, held this year in Mexico. Read More »
Terrorist attacks across Europe and elsewhere, some of them at airports, are making airlines nervous. Impromptu bans on personal electronic devices (PEDs) by the U.S. and to a lesser degree the U.K., have added to the angst carriers are enduring as they cope with governments’ disjointed and ever more complicated security rules and regulations.
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International Air Transport Association (IATA) director general and CEO, Alexandre de Juniac, who hosted his first AGM since he succeeded Tony Tyler last year, told delegates: “Aviation is a target for terrorists intent on destroying the freedom that is at the heart of our business.
“Information sharing among governments and with the industry is critical to staying a step ahead of emerging threats. We have the same goals - to keep passengers and crew safe. So it only makes sense that we work together as closely as possible.”
To enforce IATA’s message, delegates voted in favour of a resolution that called on industry stakeholders to keep flying secure by taking appropriate risk mitigation measures.
“The timing of the resolution is significant. Public and industry confidence has been rattled by inconsistencies in nations’ responses to the potential for explosives to be concealed in large portable electronic devices (PEDs),” said de Juniac.
“It highlights the reason we need better information sharing and better coordination to introduce risk mitigation measures that maximize the protection of passengers and crew while minimizing unnecessary disruption.”
Airlines have to trust the intelligence underpinning the recent UK and U.S. decisions to ban large PEDs on flights from some African and Middle Eastern airports, he said.
“But we need to get security right. There is a clear duty for governments to make sure that the measures are logical, effective and efficient. That is not the case with the current PED ban. And it must change,” said the IATA boss.
“In the short-term, these measures include more intense screening at the gate and skills training. In the medium-term, faster and more advanced explosive detection technology is the solution to evolving bomb threats. Painfully slow certification processes must be accelerated so we can actually use it,” said de Juniac.
IATA also strongly endorsed the efforts of the International Civil Aviation Organization (ICAO) to establish a Global Aviation Security Plan (GASeP) to lay the foundations for more effective collaboration on security.
Also high on the AGM’s agenda were carriers’ fears that some countries appear to be moving towards regulation that protects their own airlines. No one was naming names, but clearly the efforts being made by the U.S. airline majors to persuade Washington to wind back on open skies and slow the growth of rivals from the Gulf were concerns.
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De Juniac repeated his catch phrase that “Air transport is the business of freedom”. “Aviation is globalization at its very best. But to deliver its many benefits we need borders that are open to people and trade,” he said.
“Today, we face headwinds from those who would deny the benefits of globalization and point us in the direction of protectionism. This is a threat to our industry.”
There also was discussion about recent incidents, such as the eviction of a paying passenger from a United Airlines flight that spread around the world on social media, and the IT meltdown suffered by British Airways that forced the cancellation of hundreds of flights.
United Airlines chief executive, Oscar Munoz, who was a panelist in Mexico, admitted he spoke too early about his airline’s incident and that he should have delivered a more precise briefing about what had happened.
But the group managing director of Malaysia Airlines, Peter Bellew, said speed was essential. “You have 15 minutes to say you’re sorry.” He explained that as he packed for Mexico an incident involving Malaysia Airlines erupted when a passenger on a flight from Melbourne to Kuala Lumpur claimed shortly after take-off to have a bomb.
“As soon as we got the call we worked out the press statement that said we were sorry. Fifteen minutes later the aircraft landed and we had the first statement out. I actually think you have 15 minutes to say you’re sorry because people were live streaming on Facebook as it was happening on the aircraft at 4,000 ft,” he said.
“There is no excuse now. There is a secure instant messaging system. You can get a message around in seconds. Saying sorry is really important. You can’t sit on the sidelines anymore. The speed of social media will overtake you.”
Singapore Airlines CEO, Goh Choon Phong, who was elected as the new chairman of the IATA Board of Governors at the AGM, said: “From time to time, there will be a major event in the industry and it will be useful to look at it to see if there are lessons that can be shared by airlines.
“I am speaking from the perspective of the industry. Where it is appropriate and possible we could have a more detailed discussion with the affected airlines. The important thing is, based on those incidents or events, what can the industry learn from these situations?”
“Infrastructure in many parts of the world can barely cope with demand today. And development plans are not ambitious enough to accommodate the 7.2 billion passengers we expect in 20 years,” the International Air Transport Association director general and CEO, Alexande de Juniac, said at IATA’s AGM in June. “Bottlenecks and deficiencies in airport and air navigation services exist in all corners of the earth.” IATA wants all governments to fully implement the association’s Worldwide Slot Guidelines to fairly and efficiently manage scarce capacity although the guidelines were not a substitute for building capacity where demand exists. “Governments have a responsibility to provide sufficient capacity, with service quality aligned to user expectations at an affordable cost. It is a commonsense mantra that we must insist on in our dialogue with governments,” said de Juniac. |
“In most cases, we always say there is never enough communication, whether it is external or internal, so certainly better communication should be one aspect. You don’t just look at it in isolation. It is important to try to draw lessons from it and that we use those lessons as an industry to improve in general.”
At the AGM, IATA announced it had revised upwards its 2017 industry profitability outlook to a profit of $31.4 billion profit, from a previously forecast $29.8 billion.
“Airlines are defining a new epoch in industry profitability. For a third year in a row we expect returns that are above the cost of capital. But, with earnings of $7.69 per passenger, there is not much buffer. Airlines must remain vigilant against any cost increases, including from taxes, labor and infrastructure,” said de Juniac.
IATA’s figures reveal that the demand environment has been much stronger than anticipated, with GDP growth in 2017 forecast at 2.9%, the world’s strongest economic performance since 2011. Passenger demand is expected to grow by 7.4% for the year, matching 2016, but 2.3 percentage points higher than previously forecast.
The revised figures translate into an additional 275 million passengers over 2016 and take the number of people expected to fly this year to 4.1 billion. If achieved, this would be the largest year-on-year growth in absolute passenger numbers recorded.
At the AGM, IATA urged governments to be cautious when privatizing aviation infrastructure assets. “Privatization has failed to deliver promised benefits in many countries - India, Brazil, France, and Australia to name just a few,” de Juniac said. “The concessionaire makes money. The government gets its cut. The airlines pay the bill, usually a big one. And passengers and the local economy suffer from higher costs. When governments privatize critical infrastructure, economic regulation is essential. “To date, I cannot name a single long-term success story. Finding a solution is an important piece of work that needs government and industry collaboration. It’s the only way to balance the investor’s need for profit with the community’s need for cost efficient connectivity,” he said. |
* The 74th International Air Transport Association annual general meeting will be hosted by Qantas Airways in Sydney from June 3-5, 2018.
