77th AGM and World Air Transport Summit Boston USA, October 3–5, 2021
THE AGM ISSUE
2021 – 03
CEO Interviews JetBlue, Emirates, JAL | Environment Taking inspiration from nature | IATA Opinion Digital transformation, Environment partnership Fuel Managing concerns | Security Learning lessons from 9/11
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G E T T I N G PA SSENGER S BACK IN THE AIR
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Contents 2021 – 03
Comment 5 Willie Walsh, Director General
People want to travel and vaccinations should bring the freedom to travel
45 IATA Opinion: Muhammad Albakri, Senior Vice President, Financial Settlement and Distribution Services
24 Learning lessons from other sectors
Sir Tim Clark, President of Emirates, says that the cross-fertilization of ideas from other industries will speed up innovation 38 Increasing the value of travel
Yuji Akasaka, President, Japan Airlines, on balancing the risk and value of travel
Building back better with digitalization
10 IATA and industry update
To reduce its impact on climate change, aviation is looking to the animal kingdom
Airlines struggle on through, Blocked funds stall recovery, Working together for safe travel, High cost of testing
35 IATA Opinion
Government partnerships are key to eﬀective environmental action
14 Data: In numbers
2020 performance ﬁgures
Managing fuel concerns as the industry recovers from the pandemic
18 Understanding the future of travel
JetBlue CEO Robin Hayes talks about the high demand for leisure and the evolution of the airline into a travel company
IATA Corporate Communications Vice President Anthony Concil Creative Direction Richard McCausland Assistant Director Chris Goater www.iata.org Editorial Editor Graham Newton Head of content production DeeDee Doke Production editor Vanessa Townsend Senior designer Gary Hill Picture editor Claire Echavarry Production Production manager Jane Easterman +44 (0)20 7880 6248 email@example.com Publishing director Aaron Nicholls
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Learning the lessons of 9/11
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2021 – 03 Airlines
Moved by people qrcargo.com IATA.AGM.2021_004.indd 4
Willie Walsh: DG Insight
Vaccinations should bring freedom People want to travel. Domestic demand has recovered to a signiﬁcant percentage of pre-crisis levels. But governments are making it far too diﬃcult to cross borders by plane. So even with the boost of the Northern Hemisphere summer season, international travel is at around a quarter of a normal year. Some countries are eﬀectively closed to foreign visitors—Australia, New Zealand and China, for example. Others, such as Mexico, are largely open. Many countries lie in between. Of course, governments have a responsibility to protect the health of their populations. But data and experience tell us that can be achieved without restrictions that eﬀectively deny people the freedom to travel. As a top priority, people who have been vaccinated should not face entry restrictions. And for those who are not, we need to ﬁnd some harmonized rules, supported by data, that will keep people safe and restore their freedom to travel. It sounds simple, but we have a lot of work to do. That is illustrated in Europe. airlines.iata.org
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Even with a common framework and a world-leading tool—the EU Digital Covid Certiﬁcate—there is little harmonization in terms of entry requirements. For example, 30% don’t recognize antigen testing; 41% don’t accept vaccinated travelers from low-risk non-EU countries; and passenger locator forms are not standardized. It’s a mess of confusing requirements that needs to be cleaned-up. COVID-19 will be with us for the foreseeable future. We need to ﬁnd eﬃcient ways to live— and travel—with it. That is a critical message from this year’s IATA AGM and World Air Transport Summit. Gathering in Boston will send a signal that in-person meetings are possible —a reminder that video calls can never deliver the value of meeting for real.
Willie Walsh IATA Director General
“Cargo is leading the way in terms of recovery. Its strong performance demonstrates how critical cargo is to keeping global supply chains moving at the moment. And I think you've got to give credit to airlines who have been able to pivot their passenger operations to supply cargo capacity.”
On blocked airline funds. “Governments are preventing nearly $1 billion of airline revenues from being repatriated. This contravenes international conventions.”
On the Kingdom of Saudi Arabia’s acceptance of IATA Travel Pass. “The trust that the KSA has placed in IATA Travel Pass is an example for other governments to follow.”
On the European Commission’s (EC) decision to set the winter slot use threshold at 50%. “Once again the Commission has shown they are out of touch with reality. The Commission had an open goal to use the slots regulation to promote a sustainable recovery for airlines, but they missed. Instead, they have shown contempt for the industry, and for the many member states that repeatedly urged a more ﬂexible solution.”
2021 – 03 Airlines
President Biden has noted that “there’s no substitute… for face-to-face dialogue between leaders. None.” The same is true for business and for friends and families. Only international travel makes face-to-face meetings possible. To recover lost economic ground and to promote global prosperity and peace, governments must make international travel a priority. Restrictive measures, such as quarantine, that have been superseded by highly eﬀective testing and vaccination protocols, must be stopped.
The Big Picture
Airlines 2021 – 03
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Sponsored Feature: Istanbul Airport
Kadri Samsunlu, CEO, Istanbul Airport
A unique experience for every user
Istanbul Airport is optimistic that it will recover and expand following the disruption of the last 18 months
Istanbul Airport was the busiest airport in Europe throughout much of 2020 and continues to be among the top performers in 2021. Home carrier Turkish Airlines is expanding its network and there are some 120 countries, 60 capital cities, and 130 diﬀerent destinations within a threehour ﬂight. With such a strong recovery in prospect, thoughts are turning to the future. Airport CEO, Kadri Samsunlu, accepts that “the impact of this pandemic might be felt for the next 10 years” but emphasizes that aviation is a rapidly evolving and dynamic sector. “Things might improve much faster, with goals reached sooner than 2024 and demand much higher than our present forecasts,” he says. Samsunlu is conﬁdent that mega-hubs will be the ﬁrst to recover. “Mid-sized hubs (up to 40 million pax) will take longer to recover unless they have a very strong ﬂag carrier and low-cost carrier (LCC) presence,” he suggests. “Regional airports will need to focus on point-to-point potential via LCCs and capture long-haul traﬃc via hub connectivity and a closer cooperation with mega-hubs. Furthermore, as mega-hubs will play a signiﬁcant role over the next decade, their catchment area potential will be extended via intermodal connectivity.” Traﬃc ﬂows, however, will change. “There is huge backlog of leisure traﬃc, which I expect will recover quickly in 2022 alongside visiting friends and relatives travel,” Samsunlu
Airlines 2021 – 03
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says. “Internal business travel may take a long time to recover as many companies have learned that it is possible to meet internal colleagues online. However, external business travel will bounce back quickly, especially to/ from Asia as face-to-face contact is very important in that part of the world.” Overall, Samsunlu continues to see a role for the hub model as traﬃc starts to come back. “We believe that there will be fewer hubs in the long term, but those that remain will be stronger and more proﬁtable if they make the necessary short and long-term adjustments to their model,” he says.
“There is a huge backlog of leisure traﬃc, which I expect will recover quickly in 2022 alongside visiting friends and relatives travel” Kadri Samsunlu
Contactless ﬂow Hub or not, all airports will have to adjust infrastructure, partly because of public health issues but also because of technological innovation. Contactless ﬂow through an airport is becoming essential. That means a fully automated, touchless, and individualized journey. Considering the technology available
today, such as self-check-in, biometric passport control and boarding gates, innovations in ﬁve to 10 years will have evolved to extraordinary levels. It will almost certainly be possible to ﬂy using a mobile app and face recognition for every process and never have to use a passport or present the ticket. At stake is a competitive edge in a ﬁercely competitive industry. Passengers are returning and Istanbul Airport is working day and night to provide them with a seamless experience through its customized products and services, using the available technology in every aspect of business. The aim, according to Samsunlu, is to make the transit through the airport a unique experience for every user. The strategy at Istanbul Airport, therefore, is to remain customer focused. The
Sponsored Feature: Istanbul Airport
one-size-ﬁts-all model does not work any longer. Airports need to adjust to both the needs of the airlines and of their passengers. Istanbul Airport has already started to invest in the post COVID-19 era by implementing products for diﬀerent passenger groups and nationalities, such as the China Friendly Airport Project, Z-Generation, and the +65s among many others. Cabin hotels Samsunlu thinks passengers are also increasingly looking for areas where they can relax, be entertained, and enjoy themselves. In future airport designs, the terminal airside design will become more important. “You need to provide diﬀerent and attractive experience opportunities to
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passengers of all ages, such as virtual reality areas, experience centers, game zones, and lounge areas,” he says. “Passengers don’t want to be in a crowded location, they want individual spaces. To enhance your customer's satisfaction in this area, the airport design will present capsule or cabin hotels that they can go into by themselves and rent without having to communicate with any staﬀ members. Sleep pods and TV or entertainment cabins may be other options.” Climate change must also be a major consideration in the design process. To reduce environmental impact, new ecofriendly and sustainable buildings and
airports are multiplying. In recent projects, even vegetation has been integrated into airport design. “Furthermore, energy consumption and carbon dioxide emissions in airports are major issues,” Samsunlu concludes. “With the aim of decreasing CO2 emissions and creating alternative energy sources, photovoltaic panels are starting to be used both inside and outside of airports. So, ensuring that there is enough daylight and sunshine inside of the building will be essential.” For more information on Istanbul Airport, visit https://bit.ly/3zOW2QH
2021 – 03 Airlines
Digest Airlines struggle through the worst year on record IATA’s ﬁnal ﬁgures for 2020 reveal the pandemic’s devastating eﬀects on global air transport. 1.8 billion passengers ﬂew in 2020, a decrease of 60.2% compared with the 4.5bn who ﬂew in 2019 Industry-wide air travel demand (measured in revenue passengerkilometers, or RPKs) dropped 65.9% year-on-year International passenger demand (RPKs) decreased 75.6% compared with the year prior Domestic air passenger demand (RPKs) dropped 48.8% compared with 2019 Air connectivity declined by more than half in 2020 with the number of routes connecting airports falling dramatically at the outset of the crisis and was down more than 60% year-on-year in April 2020
“2020 was a year that we’d all like to forget,” IATA’s Director General Willie Walsh said. “At the depth of the crisis in April 2020, 66% of the world’s commercial air transport ﬂeet was grounded as governments closed borders or imposed strict quarantines. A million jobs disappeared. And industry losses for the year totaled $126bn… But it was the rapid actions by airlines and the commitment of our people that saw the airline industry through the most diﬃcult year in its history.”
Key 2020 airline performance ﬁgures from WATS
Systemwide, airlines carried 1.8bn passengers on scheduled services, a decrease of 60.2% over 2019 On average, there was a $71.7 loss incurred per passenger in 2020 Measured in ASKs (available seat kilometers), global airline capacity plummeted 56.7% Systemwide passenger load factor dropped to 65.1% in 2020, compared with 82.5% in 2019 The Middle East region suﬀered the largest proportion of loss for passenger traﬃc with a drop of 71.5% in RPKs versus 2019, followed by Europe (-69.7%) and Africa (-68.5%) China became the largest domestic market in 2020 for the ﬁrst time on record, as air travel rebounded faster in its domestic market.
Total industry passenger revenues fell 69% to $189bn in 2020, and net losses were $126.4bn in total The decline in air passengers transported in 2020 was the largest recorded since global RPKs started being tracked around 1950
Airlines 2021 – 03
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The agreement incorporates SYNLAB’s extensive lab network into IATA Travel Pass
Blocked airline funds stalling recovery IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate close to nearly $1 billion in blocked funds from the sale of tickets, cargo space, and other activities. “Governments are preventing nearly $1 billion of airline revenues from being repatriated. This contravenes international conventions and could slow the recovery of travel and tourism in aﬀected markets as the airline industry struggles to recover from the COVID-19 crisis. Airlines will not be able to provide reliable connectivity if they cannot rely on local revenues to support operations. That is why it is critical for all governments to prioritize ensuring that funds can be repatriated eﬃciently. Now is not the time to score an own
Safe travel: IATA's agreement with SYNLAB gives passengers a COVID-safe digital solution
goal by putting vital air connectivity at risk,” said IATA’s Director General Willie Walsh. Approximately $963 million in airline funds are being blocked from repatriation in nearly 20 countries. Four countries: Bangladesh ($146.1 million), Lebanon ($175.5 million), Nigeria ($143.8 million), and Zimbabwe ($142.7 million), account for over 60% of this total, although there has been positive progress in reducing blocked funds in Bangladesh and Zimbabwe of late. “We encourage governments to work with industry to resolve the issues that are preventing airlines from repatriating funds. This will enable aviation to provide the connectivity needed to sustain jobs and energize economies as they recover from COVID-19,” said Walsh.
WORKING TOGETHER TO MAKE TRAVEL SAFE AND EASY IATA has partnered with SYNLAB, Europe’s leading medical diagnostic services provider, to facilitate safe and easy travel. The agreement incorporates SYNLAB’s extensive lab network into IATA Travel Pass, giving airline passengers access to SYNLAB’s broad and secure COVID-19 testing services, beneﬁting from its international capabilities. IATA Travel Pass allows passengers to locate authorized laboratories at departure locations to get tested for SARS-CoV-2 as required by border and health authorities.
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After testing, SYNLAB will provide passengers with their certiﬁed test results directly through the IATA Travel Pass. The app checks the result against the IATA Travel Pass registry of national entry requirements to produce an “OK to Travel” status. Passengers can share their status and the digital test certiﬁcates with authorities and airlines to facilitate travel. Authorized laboratories directly send COVID-19 test results to the passenger’s phone as a veriﬁable credential. This way, the IATA Travel Pass is a digital solution that also prevents potential forgery of test results.
IATA partners with SYNLAB, Europe’s leading medical diagnostic services provider
in airline funds are being blocked from repatriation in nearly 20 countries 2021 – 03 Airlines
“IATA estimates that international travel will only reach 34% of 2019 levels by end of 2021” According to IATA's World Air Transport Statistics
SLOT RULING IS OUT OF TOUCH WITH REALITY
Testing times: IATA says costly COVID-19 tests hinder travel
IATA WARNS GOVERNMENTS OF HIGH COST OF TESTING 12
IATA called on governments to take action to address the high cost of COVID-19 tests in many jurisdictions and urged ﬂexibility in permitting the use of cost-eﬀective antigen tests as an alternative to more expensive PCR tests. IATA also recommended governments adopt recent World Health Organization (WHO) guidance to consider exempting vaccinated travelers from testing requirements. IATA said it supports COVID-19 testing as a pathway to reopen borders to international travel, but its support is not unconditional. Testing needs to be easily accessible, aﬀordable, and appropriate to the risk level. “The UK is the poster child for governments failing to adequately manage testing,” said Willie Walsh, IATA’s Director General. “At best it is expensive, at worst extortionate. And in either case, it is a scandal that the government is charging VAT.” The new generation of rapid tests cost less than $10 per test. Provided a conﬁrmatory rRT-PCR test is administered for positive test results, WHO guidance sees Ag-RDT antigen testing as an acceptable alternative to PCR. And, where testing is a mandatory requirement, the WHO’s International Health Regulations (IHRs) state that neither passengers nor carriers should bear the cost of testing.
Airlines 2021 – 03
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IATA branded the European Commission’s (EC) decision to set the winter slot use threshold at 50% as “out of touch with reality,” and argued that the EC had ignored the advice and evidence presented by EU member states and the airline industry, which had made the case for a much lower threshold. The EC’s announcement means that, from November 2021 to April 2022, airlines operating at slot-regulated airports must use at least half of every single series of slots they hold. There is no alleviation to hand back slots at the start of the season allowing airlines to match their schedule to realistic demand or enable other carriers to operate. Additionally, the rule on ‘force majeure’, by which the slot rule is suspended if exceptional circumstances related to the COVID pandemic are in eﬀect, has been switched oﬀ for intra-EU operations. The result of these changes will be to restrict the ability of airlines to operate with the agility needed to respond to unpredictable and rapidly changing demand, leading to environmentally wasteful and unnecessary ﬂights. It will also further weaken the ﬁnancial stability of the industry and hinder the recovery of the global air transport network. The Commission’s argument is that the intra-EU traﬃc recovery this summer justiﬁed a 50% use threshold with no alleviation. This ﬂies in the face of signiﬁcant evidence of the uncertain outlook for traﬃc
demand this winter, provided by key EU member states as well as IATA and its members. For example: The extent of intra-EU recovery is at best only a partial indicator of the extent of recovery at slotconstrained airports, where the key slots are needed for global traﬃc connections which have not yet recovered. IATA estimates that international travel will only reach 34% of 2019 levels by end of 2021. Winter demand always tracks below summer demand, even in good years. Long haul bookings this winter for the EU are currently averaging 20% of 2019 levels.
SLOT USE THRESHOLD
50% Despite the roll-out of vaccines, governments continue to be extremely cautious. Their response to variants of concern is still to close borders or instigate quarantine measures that instantly kills travel demand, making European air travel extremely weak and unpredictable.
Out of touch: The EC's winter slot use threshold of 50% ignores evidence of EU member states
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26/08/2021 13:36 13:21 02/09/2021
In numbers International passenger demand (revenue passenger-kilometers—RPKs) decreased by 75.6% compared to the prior year
48..8 % 48
2020 PERFORMANCE FIGURES
Domestic air passenger demand (RPKs) dropped by 48.8% compared to 2019
Total passenger revenues Total industry passenger revenues fell by 69% to $189bn in 2020. International passenger demand (RPKs) decreased by 75.6% compared to the previous year. (All information from 2021 IATA World Air Transport Statistics www.iata.org/wats) Regional passenger and freight demand outcomes Passenger traﬃc was disrupted in all the regions, while cargo performance diﬀered across markets % year-on-year 10
Source: IATA CTKs
Airlines 2021 – 03
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The systemwide passenger load factor dropped to 65.1% in 2020, compared with 82.5% in 2019. And systemwide, airlines carried 1.8bn passengers on scheduled services, a decrease of 60.2% over 2019
-50 -60 -70 -80
Data (Source: IATA World Air Transport Statistics [WATS])
Largest international RPK markets (2020)
Government-imposed travel restrictions
While traﬃc remained muted on most international markets, a few (ie. certain routes to Central America) showed signs of recovery
Travel restrictions were a key driver of diﬀerences across regions
Passenger km ﬂown by major market segment, Jan 2020 = 100
International travel stringency index weighted by population (Jan 2020-March 2021)
Source: IATA. Oxford University
4 Total border closure
100 90 Total International (-75.6% in 2020) Within Europe (-70.7% in 2020) North Am - Central Am (-60.4% in 2020)
3 Closed to some regions
2 Quarantine arrivals from high risk regions
50 40 30
20 10 0 Feb-20
Central and South America Africa & Middle East North America
0 No measures Jan-2020 Mar-2020 May-2020 Jul-2020 Sep-2020 Nov-2020 Jan-2021 Mar-2021
Airlines lost $71.7 for every passenger ﬂown in 2020 The decline in air passengers in 2020 was the largest recorded since global RPKs began to be tracked around 1950
Regional rankings (based on total passengers carried on scheduled services by airlines registered in that region) compared to the region’s passengers in 2019 are:
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2021 – 03 Airlines
Airlines 2021 – 03
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Understanding the future of travel Robin Hayes, Chief Executive Officer, JetBlue, talks to Airlines. about the evolution of the airline into a travel company INTERVIEW BY: GRAHAM NEWTON
ecovery in the airline industry is going to be lengthy but demand— especially for leisure—remains strong and one that JetBlue wants to take advantage of.
Tell us about your latest ﬁnancial results and what they mean for the airline going forward?
We’re very pleased with our second quarter results. Revenue doubled compared with the ﬁrst quarter, which clearly demonstrates the pent-up demand that we expected. The underlying trends are positive, and we’ve also reduced our debt. It’s been a strong summer and we see some signiﬁcant strides in the recovery.
Is the recovery just a matter of time or do you see roadblocks ahead?
I expect the industry recovery will be non-linear and take some time. As of August 2021, there are rising case counts of COVID-19 in the United States and in many other countries. Companies are delaying oﬃce openings and travel restrictions remain in place. So, there will be pressure in the short to medium term and it will be some time before we have any sort of stability in the industry. But when demand comes back, it comes back quickly. We need governments to remove some of the travel restrictions they’ve imposed and to airlines.iata.org
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“We start serving London Gatwick from JFK in late September and will be the only carrier at Gatwick oﬀering US service”
harmonize health protocol measures. But once this is corrected, the bounce back will be strong. There’s plenty of demand there, particularly for the leisure sector. We’ve already seen the return in demand with our new ﬂights to London from New York. I think some business travel will take longer and so some airlines may need to reposition for the future.
Do you see a fundamentally diﬀerent industry in the years ahead or will 2025 see aviation that looks much as we expected pre-COVID?
The main point is that people want to ﬂy. That remains unchanged. What airlines have to do is be ﬂexible enough to respond to that demand. Those airlines with more exposure to leisure have performed better because the demand has been strongest in the leisure and visiting friends and relatives (VFR) markets. The domestic market will continue to perform well in comparison to international travel because we expect some form of border restrictions lasting into 2022. I think customers’ expectations for traveling moving forward will be changed. Enhanced cleaning protocols during the travel journey are here to stay. They will also value ﬂexibility and so I expect airlines to continue to make it easy to cancel tickets or change ﬂights. 2021 – 03 Airlines
Is the recent Executive Order on competition and consumer protection a step toward re-regulating the industry in the United States?
The Biden Administration has recognized that there has been a signiﬁcant amount of industry consolidation in the United States. Four airlines now control over 80% of the domestic market. That makes it extremely diﬃcult for new airlines to break into or expand in key hubs. The fact is we are a fraction of the size we want to be in New York. And that is why we signed our codeshare agreement with American Airlines. It has tripled our presence at New York’s LaGuardia and doubled it at Newark. This new Northeast Alliance will bring low fares to even more people. We are codesharing on 80 routes and it has allowed us to oﬀer a number of new destinations. It will also provide essential competition to Delta at JFK and to United at Newark. We have to ﬁnd ways for JetBlue to grow and we will be developing the alliance with American. Why did you decide to compete in the transatlantic market?
There is signiﬁcant demand between the
2040 Last year, JetBlue became the first major US airline to achieve carbon neutrality for all domestic flights and we are offsetting the CO2 emissions from all of JetBlue’s London flights throughout 2021. In 2020 we announced our commitment to achieve net-zero carbon emissions by 2040. Airlines 2021 – 03
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Northeast US and the United Kingdom and Europe and it was the right time to oﬀer customers greater choice in the transatlantic market. In fact, London is the largest market that JetBlue didn’t already ﬂy to from New York or Boston. The transatlantic market has been characterized by high fares, especially in business class. We oﬀer the unbeatable combination of low fares and award-winning service to our customers. Having JetBlue in the market means fares will come down across the board. That won’t be the result of the pandemic, it will be the JetBlue eﬀect. We needed to wait for our Airbus A321LR aircraft to be delivered and, of course, to get access to London Heathrow. That wouldn’t have been possible if the pandemic hadn’t freed up slots there. We start serving London Gatwick from JFK in late September and will be the only carrier at Gatwick oﬀering US service. Flights from Boston to the United Kingdom are scheduled for summer 2022. Has your technology venture been successful and is there any particular technology or idea that has caught your attention?
JetBlue Technology Ventures (JTV) is about us evolving from being an airline to being a travel company. It allows us to invest in dozens of start-ups with great ideas about the future of travel. They help us with their innovative thinking, and we help them by mentoring and growing their business. The work we’re doing with Joby Aviation is a great example of this. They are involved in the electric vertical take-oﬀ and landing (eVTOL) sector and aim to provide commercial service by 2024. The project is providing crucial insight into this new sector of ultra-short haul and electric ﬂying. They’re working hard and were able to become a publicly traded company in August. JTV has also invested in Universal Hydrogen, specializing in fueling carbon-free ﬂight, to help us understand this important form of energy and how it may aﬀect the travel sector. airlines.iata.org
What will it take for you to achieve your target of net-zero carbon emissions by 2040?
Last year, JetBlue became the ﬁrst major US airline to achieve carbon neutrality for all domestic ﬂights and we are oﬀsetting the CO2 emissions from all of JetBlue’s London ﬂights throughout 2021. Last year we announced our commitment to achieve net-zero carbon emissions by 2040. Airline attention has understandably been on surviving the pandemic. But once we get through that, sustainability will be the number one issue for the industry outside safety. It will be challenging to completely decarbonize the industry because of the nature of our business: ﬂying aircraft that rely on fossil fuels. We must work together with manufacturers and fuel suppliers to move away from this reliance on fossil fuels to cleaner fuel and ultimately carbon-free power. The ﬁrst step is sustainable aviation fuels (SAF). JetBlue is already using them in Los Angeles and San Francisco, and we will expand our use to 10% of total jet fuel use by 2030. But completely carbon-free energy sources are the only way forward and that is what we must keep in mind. Why is diversity important to the aviation industry?
Diversity is absolutely vital. Having diversity in your workforce means you reﬂect the customers you serve, and it also gives the airline a better variety of skills and resources. At JetBlue, all our frontline staﬀ have access to programs to further their careers. There is a leadership training program, for example, and we also have frontline staﬀ that have successfully applied to be pilots and maintenance technicians. We have similar programs in place at a number of diﬀerent levels within the organization. We have good gender diversity at the senior management level. Even so, there’s always more to do, and we’ve committed to meaningfully increasing our minority and female representation in the oﬃcer and director ranks by the end of 2025 and will airlines.iata.org
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80% Four airlines control over 80% of the domestic market in the United States
JetBlue is already using SAF in Los Angeles and San Francisco, and they will expand their use to 10% of total jet fuel use by 2030
continue to work at increasing diversity across the organization.
“JTV has also invested in Universal Hydrogen, specializing in fueling carbon-free ﬂight, to help us understand this important form of energy and how it may aﬀect the travel sector”
What topics do you want to tackle in your time remaining as IATA Chair?
It is a great honor to be IATA Chair and see all the hard work that is done by the IATA team. This has been an unprecedented time in our industry and tough to navigate. Countries were aﬀected by the pandemic at diﬀerent times and at diﬀerent rates and governments across the world responded in diﬀerent ways. This has led to an extremely complex situation for our industry as every country is dealing with diﬀerent challenges. As we come out of the COVID crisis and the virus becomes endemic, then sustainability will be crucial. Public opinion will be formed by industry actions rather than the strategy of individual carriers and we must stay focused on that bigger picture. We must not replicate what has happened with COVID and have diﬀerent responses trying to achieve diﬀerent goals. We must see sustainability through a global lens with harmonized measures, allowing airlines to operate on a level playing ﬁeld. 2021 – 03 Airlines
Sponsored Feature: Collins Aerospace
Redeﬁning air travel in partnership with IATA Collins Aerospace has worked with IATA and aviation partners to support the IATA Travel Pass to get the world ﬂying again
Why is the IATA Travel Pass so important? To help reopen international borders and restart the aviation industry, Collins Aerospace is teaming with IATA to provide support for IATA’s new digital health platform: Travel Pass. The app enables accurate information to be provided to airline passengers on test requirements, as well as to verify that a passenger has met those requirements for travel to their chosen destination. The IATA Travel Pass is a global solution to validate and authenticate all country regulations regarding COVID-19 passenger travel requirements. The mobile application helps travelers plan, store, and manage their veriﬁed test results for COVID-19 in a more secure and eﬃcient way than current paper processes. Giving airlines the ability to provide accurate information to their passengers on test requirements and to verify that passengers meet the requirements for travel is key to getting travelers back in the air.
What IATA Travel Pass provides is a global solution developed by the industry’s own governing body. It is built to industry standards (such as ICAO DTC and W3CDigital Comms), supports existing initiatives (such as One ID), and is built on decentralized technology to ensure there is no central database holding passenger information. With so many health passport solutions suddenly emerging, disparate systems have the potential to confuse and frustrate travelers. The reassurance provided to both airlines and passengers alike will position Travel Pass as a key component to restarting international travel. What were the challenges in providing seamless connections for the app? Exchanging data between Travel Pass and the global airlines’ disparate computer systems requires complex technologies that can map the multiple data formats into a single
Airlines 2021 – 03
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service. This enables the passenger’s experience to remain the same, irrespective of the airline they are ﬂying with or the journey they are embarking on. This is delivered as a secure and seamless service that may involve the passenger using multiple airlines on a single journey. Collins Aerospace has made integration with Travel Pass easy and streamlined. Our established platform sends passenger itinerary data safely and securely to the Travel Pass application. From there, itineraries are checked against destination requirements. Passengers’ test results or vaccine certiﬁcates can then be used to determine an “OK to travel” status. What can the industry learn from the work and the cooperation behind IATA Travel Pass? Global problems require global solutions, driven by all stakeholders within the industry. In pushing forward the Travel Pass solution, IATA’s leadership—and companies like Collins Aerospace— has provided this global solution in a timely manner, making it as easy as possible for airlines to implement using existing systems. Everyone in the aviation industry, from airlines to airports to industry suppliers, as well as government agencies, were all signiﬁcantly impacted by the recent health crisis. Despite the diﬃculties, with each party providing its own specialist skills and technology, integrating a worldwide network of accredited testing laboratories —and re-using existing services such as IATA’s Timatic platform—a platform has been created to get the industry up and
Sponsored Feature: Collins Aerospace
running again. And passengers are the other integral constituents, giving them new technology solutions that are easy to use and getting them back to traveling safely. Careful design choices not only allows Travel Pass to fulﬁll the immediate requirements for health, but also provide a platform for the future implementation of biometric-based, One ID travel programs. Overall, what is your view on digitization within aviation? Are airlines well placed or are they still too reliant on legacy systems? And has the crisis stalled investment in crucial projects? Collins Aerospace views digitization within aviation as one of the key drivers that will bring greater eﬃciencies and increased passenger satisfaction. Airports and airlines have recognized the need for this technology update and are working with industry to enable new solutions. Improved use of the data generated by new solutions, as well as legacy solutions, will give aviation operations increased decision-making capabilities. The recent crisis has shown a slowing of investment in some areas but there has been a focus on investment in new areas such as biometrics and self-service solutions to help passengers easily move through the airport. Although many systems are legacy based, innovative technology, such as the systems provided by Collins, supports these systems to be integrated into new services and business processes.
For more information: Visit https://www. collinsaerospace.com/iata-travel-pass
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2021 – 03 Airlines
Learning lessons Sir Tim Clark, President of Emirates, tells Graham Newton that the cross-fertilization of ideas from other industries will speed up innovation in the sector. INTERVIEW BY: GRAHAM NEWTON
o progress aviation, the airline industry must look towards other manufacturers, or the utilities sector, or the automotive industry to get a better understanding of the science or technology needed to improve the sector.
24 What was it like to lead an airline through the pandemic? Are there lessons to take forward?
Back in March 2020, our understanding of the severity of the crisis was just beginning. But nobody had any idea about its longevity. We had to shut down for three months, but we thought that full operations might be possible in the ﬁnal quarter of 2020. Unfortunately, the virus wasn’t contained as we hoped, and I slowly began to realize that vaccines would be needed. At that stage there weren’t any but given the extent of the resources being brought to bear on the problem from governments and pharmaceutical companies and other stakeholders, it was clear that there would be a vaccine sooner rather than later. We are getting to the point where the world will soon be double vaccinated, although equality of distribution is a concern, especially as governments see the vaccines as essential to lifting travel restrictions. The situation is also being complicated by variants. And diﬀerent governments are taking diﬀerent approaches at diﬀerent times. It has become an enormously complex issue and the end result is signiﬁcant damage to the industry in the short and medium term. Airlines 2021 – 03
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“At the moment, we are operating about 25 A380s out of a ﬂeet of 117”
But the fallout of the pandemic couldn’t have been avoided. Emirates had to lay oﬀ 30,000 staﬀ—through no fault of the airline. It was diﬃcult to do as we have only ever expanded. Letting good people go was very hard. Has the crisis revealed governments’ lack of understanding of the importance of air connectivity?
The response from governments has been varied. If you look at US carriers, they received a lot of support. That’s not the case in the United airlines.iata.org
“Different governments are taking different approaches at different times” airlines.iata.org
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2021 – 03 Airlines
Kingdom. Other governments simply don’t have the resources to support aviation. The priority has been public health. And aviation wasn’t the only industry needing cash. Look at hospitality, for example. The main problem we have had is that every government has taken a diﬀerent approach. Travel restrictions are changing by the hour. They are on a learning curve, but we all are. And if everybody keeps changing the rules it is near impossible for check-in agents and all those involved in travel to understand the requirements and plan accordingly. We hope that in 2022 when the vaccine has become ubiquitous across the world that we will see harmonization. But I suspect discrepancies will remain. Technology can get us to the point where the information you need is right in front of you. And people shouldn’t travel where they are concerned about the right of entry. So, this will resolve itself eventually, but airlines are currently having to deal with situations that are aﬀecting them badly and that could be avoided. For Emirates, is it now a case of resuming your pre-COVID strategies or has your vision signiﬁcantly changed?
In the short term, we had to perform major surgery on the airline. But we are recovering on the passenger side and there has always been good demand for freight. At the moment, we are operating about 25 A380s out of a ﬂeet of 117. We are getting back to normal, and the airline will look to continue to grow. Has cargo climbed up the agenda?
I don’t think anybody in the industry would dispute that it has been a life saver. Capacity has been an issue, but we have seen good yields in part because of that and air cargo has become the shining light of our business. Going forward, I think it will remain very strong because capacity will be subdued for the next two to ﬁve years. There is lots of interest in cargo conversions right now but that will take a little time to ﬁlter through. Airlines 2021 – 03
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The fallout of the pandemic couldn’t have been avoided. Emirates had to lay off 30,000 staff— through no fault of the airline. Letting good people go was very hard
What other challenges are there in Middle East aviation?
Airspace has always been a concern, but work has been done on both the upper and lower levels. The hubs in our region have progressed enormously over the past 20 years or so and all stakeholders have been forced to improve. We used to face inbound delays around midnight, but those have diminished rapidly because air traﬃc control in this part of the world have got themselves into a very good shape. It has been a work in tandem with all our partners. What do you think the global industry will look like in ﬁve years’ time? Is there a future for business travel, alliances, hub-and-spoke services, and low cost?
I am conﬁdent the industry will be restored largely to what it was pre-pandemic, but it may take on diﬀerent guises in diﬀerent segments. For example, low cost long-haul could become stronger due to new longer-range aircraft. I don’t think we will see major paradigm shifts, however. The industry will not be that dissimilar. For a while, there may be fewer players as airlines disappear, but new players will come. And airlines will be able to ﬂy to places they couldn’t before as slots and networks work themselves out. But these are cosmetic diﬀerences. Looking ahead, it will be less about business models and operations and more about environmental pressures. These have gathered speed over the past year. We have to ﬁnd a way to tell governments and the public about the good work we are doing. This is a great industry that does a great job for economies but we have to be better at communicating our mitigation eﬀorts. What would help the industry do a better job for the environment?
There’s a lot more we can do at every level. Tree planting is good but that seems to have limited impact on public perception. And perhaps there could be a mandate for fully electric ground support equipment at airports. airlines.iata.org
These eﬀorts on the periphery never get the credit they deserve though. The main problem is aviation fuel. Sustainable aviation fuels (SAF) would be great if they can be produced at scale. But nobody has yet come up with a viable plan about how to get up to scale and so reduce the price. As for engines, we can probably only get about another 10% out of current technology because the engine manufacturers have done a fantastic job to date. Our ﬂight from Dubai to Los Angeles takes oﬀ weighing 600 tonnes. It is very hard to overcome that. We would have to defy the laws of physics to make that ﬂight completely electric, for example. The biggest opportunity is to cross-fertilize the science. What are other manufacturers doing, or the utilities sector, or the automotive industry? We would have a better chance of understanding where we need to go if we looked beyond aviation. What works in one industry might also work in ours. Look at composite materials. The science behind composites has been absorbed by aircraft manufacturers. But how has it been developed in the automotive industry and is there anything we can learn? If we exchange ideas, we have a much better chance of being successful. Have customer expectations changed and, if so, is the industry in a position to meet those expectations?
I am not worried about the industry reestablishing itself in two to three years. But customers will be more discerning about travel in the future. To ensure demand, technology driven by biometrics will be needed at check-in, immigration, and boarding. And these systems must speak to each other and to government agencies. That will be music to the ears of airports as passengers will have more dwell time and so more time to spend money. But as we get rid of antiquated processes we will see airports begin to reconﬁgure. Our passengers will expect seamless services because that is what they are getting in other industries. airlines.iata.org
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25 “At the moment, we are operating about 25 A380s out of a ﬂeet of 117”
10% “As for engines, we can probably only get about another 10% out of current technology because the engine manufacturers have done a fantastic job to date”
BC “Business to consumer will become ever more important and take an increasing share of the market”
9/11 Twenty years on from 9/11, “we have to strive for seamless travel… the technology is there to make security all but invisible to the passenger”
They will expect to be connected to the Internet in the air, especially on long haul ﬂights. And they will want to stream movies, which means we need to solve the problem of bandwidth. Airlines shouldn’t overestimate what is necessary, but they must deliver products in a meaningful manner. The trouble is everybody is strapped for cash and taken on debt. That may inhibit innovation. But I see that as the only inhibitor. Ultimately, we must make travel a pleasure and not a concern. The technology exists to make that happen. How important is NDC and improved distribution to a seamless travel experience?
How you reach out in the business to consumer (B2C) world is vital. Technology allows us to do it and expand our range of products exponentially. We can now talk to and understand consumers far better than we could 20 years ago. Business to business still works but B2C will become ever more important and take an increasing share of the market. B2C helps reﬁne our products and what we do and when. It is a window on behavioral characteristics. It gives us an immediate measure of whether we are doing something right or wrong. That is what makes it so important.
Twenty years on from 9/11 the security checkpoint is still a pain point for passengers. How do we improve the checkpoint and maintain great security?
As mentioned, we have to strive for seamless travel. So, we need to get to a situation where we can do security checks on passengers without them having to take things out of hand baggage or even stop walking. There has to be multiple scanners for both below wing and hand baggage. Walk-through channels with multiple scanners will remove yet another touchpoint. Biometrics will take care of check-in and boarding and we have to ﬁnd a similar solution for security. We will get to that point in 5-10 years as the technology is there to make security all but invisible to the passenger. 2021 – 03 Airlines
Sponsored Feature: Hitit
Preparing air cargo for tomorrow Hitit has been providing airline IT solutions to travel industry players in need of change for the past 25 years
Aviation’s ability to keep trade ﬂowing— and especially its eﬀorts to deliver personal protective equipment, vaccines, and humanitarian aid—has enabled both the industry and world economies to survive the COVID-19 pandemic. The challenge now is to transform the air cargo sector so that it can continue to deliver value even as passenger traﬃc returns to normal. Atilla Lise, Head of Air Cargo and Innovative Solutions at Hitit, says that there is no doubt that the unprecedented crisis has accelerated the implementation of digital processes in air cargo. “Making cargo fast and smart was initiated by IATA with six smart objectives, and later gained a new dimension with the Enhanced Partner Identiﬁcation and Connectivity (EPIC) platform,” says Lise. “Hitit was among the ﬁrst technology companies involved in both these initiatives.” Air cargo is ripe for digital transformation having relied on abundant paperwork since its inception. But one of the problems with implementing new technology is the sheer number of players involved in the value chain as the shipment progresses from origin to destination. For a digital solution to fully realize its potential, each supply chain member must speak the same language. Unfortunately, even major players still rely on legacy technologies. This means it is hard for an organization to be a ﬁrst mover as it could then
Airlines 2021 – 03
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“We deliver the concept of a one-stop-shop to all our partner airlines, regardless of their size or business model, whether an ambitious low-cost start-up or an established fullservice carrier looking to modernize” Atilla Lise, Hitit
Sponsored Feature: Hitit
struggle to communicate with more cautious partners. If it has to maintain paper processes alongside new technologies, costs would soar. Because of this, Lise notes that the penetration of smart technologies into the industry is being delayed. But all is not lost. Hitit aims to overcome this roadblock. Its Crane CGO and Crane DOM solutions are cost-eﬀective answers that neutralize the negative aspects of this challenge by satisfying current needs while laying the groundwork for digitalization. “We deliver the concept of a one-stop-shop to all our partner airlines, regardless of their size or business model, whether an ambitious low-cost start-up or an established full-service carrier looking to modernize,” says Lise. “We provide them with the right tools to achieve their goals both today and tomorrow.”
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Lise is conﬁdent that such solutions will continue to be developed as new talent enters the sector. The extraordinary conditions triggered by the pandemic have changed people’s perspective of air cargo, making it an integral part of everyday life and an exciting prospect for potential recruits. Even though it is still behind 2019 data, air cargo has witnessed some extremely positive trends,
“We deliver the concept of a one-stopshop to all our partner airlines, regardless of their size of business model” Atilla Lise, Head of Air Cargo, Hitit
such as increasing yields and load factors. “I think that these trends will continue to be positive, and we will exceed the pre-2019 growth forecasts for the future of air cargo,” says Lise. “There is a lot of room for improvement in air cargo in terms of technology and digitalization, and I believe this situation will attract even more talent into the cargo business.” Technology in air cargo must be an integral part of a holistic approach, according to Lise. Hitit’s air cargo solutions can be utilized as a customer sees ﬁt. This ability to handle today’s problems while preparing for tomorrow should allow air cargo to continue to deliver value to the industry and the world. For more information on what Hitit can do for your business, please visit https://hitit.com/
2021 – 03 Airlines
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Humankind has always studied the animal kingdom for tips on flying. Can it now help reduce the aviation industry’s impact on climate change? WORDS: ANDREW STEVENS
n the 15th century Leonardo Da Vinci wrote of bats, kites, and birds as sources of inspiration for one of his most famous inventions, a machine with ﬂapping wings powered by the human body. His drawings of a ﬂying machine, or ornithopter, are seen by some as the beginning of the history of manned ﬂight. It took another 400 years before the ﬁrst heavier-than-air machine took ﬂight under its own power, near the small town of Kittyhawk in North Carolina. The Wright brothers gave birth to aviation as we know it in 1903 and ever since engineers have been reﬁning and improving the dynamics of ﬂights to build bigger and more eﬃcient aircraft. And inspirations taken from the animal
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10% trailing aircraft could cut fuel burn as much as 10%
kingdom could help reduce aviation’s climate change impact. In 2009, a team of doctoral students from the Aeronautics and Astronautics program at Stanford University conceptualised plans for commercial planes to save fuel by mimicking birds ﬂying in formation. The theory is that the plane behind the leading aircraft will in eﬀect surf the wake vortex of the plane in front. According to a working paper presented by ICAO in 2019, the trailing aircraft could cut fuel burn as much as 10%. Speaking just two months ago Airbus CEO Guillaume Faury conﬁrmed his support for formation ﬂight as a sustainability tool. In fact, Airbus continues to research the ﬂight mechanics of a number of birds and has designed
IMAGES: TRAVEL-FR / SHUTTERSTOCK/GETTY
Taking inspiration from nature
2021 – 03 Airlines
a model based in part on the wing design and movement of the albatross. The AlbatrossONE project team built a small-scale remote-controlled aircraft with freely ﬂapping wing-tips capable of reacting and ﬂexing to gusts of wind to provide extra eﬃciency. NASA has also been looking at nature. In recent years, it teamed up with the US Air Force Research Laboratory and FlexSys Inc to successfully complete initial ﬂight tests of a new bendable “morphing” wing, that is closer to a bird’s wing than the hinged wings in use today. According to NASA, it has the potential to signiﬁcantly reduce fuel costs, reduce airframe weight, and decrease aircraft noise during take-oﬀs and landings. The technology, which can be retroﬁtted to existing aircraft wings or integrated into entirely new airframes, enables engineers to reduce wing structural weight and to aerodynamically tailor the wings to promote improved fuel economy and more eﬃcient operations while also reducing environmental and noise impacts. Birds and other winged creatures are an obvious start for biomimicry but they are not the only role models for aviation engineers. Shark-based technology hit the headlines recently when Lufthansa and BASF unveiled a surface ﬁlm that can be applied to a plane that mimics the structure of a shark’s skin. Four hundred million years of evolution has produced a shark skin that has thousands of small scales, or denticles, in varying shapes and sizes around the body which reduce drag through the water. Lufthansa Technik and BASF have developed a coating that contains tiny riblets to mimic the denticles. It can reduce drag up to 1% on a Boeing 777. The airline announced it would use the material on its B777 freighter ﬂeet. For the entire ﬂeet of 10 cargo aircraft, this translates to annual savings of around 3,700 tons of kerosene and just under 11,700 tons of CO2 emissions, which is the equivalent of 48 individual freight ﬂights from Frankfurt to Shanghai. Airlines 2021 – 03
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3% Use of sharkskin technology could eventually reduce CO2 emissions as much as 3%
Lufthansa Technik and BASF said they will continue to develop the technology to include additional aircraft types and even larger surfaces to help airlines meet greenhouse gas targets. Initial models show that the use of sharkskin technology could eventually reduce CO2 emissions as much as 3%. Aviation is determined to cut emissions 50% relative to 2005 levels by 2050 and a growing number of individual airlines have pledged much greater cuts; zero emissions by 2050. The biggest gamechangers are likely to be in the form of Sustainable Aviation Fuels (SAF), and electric and hydrogen powered engines. But that doesn’t mean the drive for further eﬃciency will take a back seat. New fuels will still be a signiﬁcant cost for airlines, which means engineers will continue to seek improvements in aircraft design, and one of the best places to start is looking at how nature tackled the problem. airlines.iata.org
A force with nature Ultra efﬁcient high-aspect ratio wings, new engines and lightweight materials help to deliver a double-digit reduction in fuel consumption and the lowest level of CO2 emissions. Inside the cabin and outside, it’s the quietest aircraft in its class, delivering a 65% reduction in noise levels around airports and the biggest margin to ICAO noise limits. The E2 Proﬁt Hunter is a force with nature, not against it.
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01/09/2021 11:28 02/09/2021 13:40
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24/08/2021 02/09/2021 11:10 13:41
IATA Opinion: Sebastian Mikosz
Working with governments
ILLUSTRATION: SAM KERR
Sebastian Mikosz, Senior Vice President for Member and External Relations at IATA, says government partnerships are key to effective environmental action
possible in the short term. But we do have options. If we can make our jet fuel sustainably, it opens up a tremendous opportunity. SAF, which can be made from anything from household waste to plants nobody wants to eat, can reduce emissions by 80% on a like for like basis with traditional kerosene. The challenge is to scale up production fast so that we can meet our target to cut emissions to half 2005 levels by 2050. Building new factories to reﬁne SAF takes time. Investments commenced several years ago are only now coming on stream. These facilities will help to push up production, but we have to push for much more if we are to meet a goal of 5% of commercial jet fuel demand by 2030. The big oil producers must now step forward and support SAF in a substantial way. Political support – using appropriate policies - is also crucial. The European Union is pushing for more SAF use but their choice of policies – mandates and fuel taxes – is not the most eﬃcient option. Direct encouragement to producers (for example through tax breaks, R&D subsidies or public-private partnership) would be more eﬀective. Taxation is particularly impractical. Making ﬂying more expensive is not the answer to accelerating the development of sustainable aviation. Governments never ring-fence the money for environmental investment, and it hits lower-income travelers the hardest. With the publication of the latest UN IPCC report into global warming and world’s focus turning to COP26 in Scotland at the end of the year, societies are increasingly looking to businesses and governments to redouble their eﬀorts to reduce greenhouse gasses. IATA and its members are committed to meeting that challenge. We hope that we can work with governments for eﬀective policies so that we can ensure we meet our carbon reduction targets and more.
2021 – 03 Airlines
he pandemic has not diminished the industry’s determination to tackle its environmental responsibilities. Carriers have purchased record amounts of sustainable aviation fuel (SAF) this year, while the retirement of older gas-guzzling airplanes continues apace. The industry has continued to urge states to volunteer for the ﬁrst phase of CORSIA (Carbon Oﬀsetting and Reduction Scheme for International Aviation). A number of exciting projects on hydrogen and electric aircraft have emerged from both established manufacturers and start-up companies. IATA is similarly committed to reinforcing its environmental resources and action plan. As part of the management changes instigated by Willie Walsh, for the ﬁrst time Environment has been made an independent IATA Division. It is my honor to have been appointed as the Senior Vice President for this new Division. This means that environmental considerations will now be at the heart of the strategic discussions governing everything IATA does. These changes aim to turbo-charge our ability to assist our members in their pathways to sustainability. IATA’s traditional strengths of building industry consensus and awareness, driving global standards, and advocating for smart government policies will be crucial, for we have a huge challenge before us. Commercial aviation CO2 emissions in 2019, the prepandemic peak, were over 900 million tonnes. They fell to a low of less than 500 million in 2020 but if the industry returns to growth as we hope it will do, we are likely to exceed the 2019 peak in 2023. The plain fact is that despite the good environmental work being done, we will be an industry growing its emissions during a period where the expectation is on business to reduce carbon. Aviation relies on jet fuel and zero-emissions ﬂight is not
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Increasing the value of travel Yuji Akasaka, President, Japan Airlines spoke to Graham Newton about the need to understand the balance between the risk and value of travel
he rise in demand for passenger journeys for tourism purposes among other reasons heralds the signiﬁcant growth in recovery for airlines such as Japan Airlines, and oﬀers even more opportunities for the airline market.
What is your strategy to recover from the pandemic?
First and foremost, our customers will need to feel conﬁdent and comfortable to resume traveling. To provide this, we will continue to expand and enhance speciﬁc services that provide safety and security to our customers throughout their journey with us. For example, we will further enhance our hygiene measures and customer comfort through antiviral and antibacterial treatments at airport counters, lounges, and on board. We will also promote and innovate contactless and automated services using the latest technology and introduce digital health credential capability at an early stage to ensure safe, secure, and smooth air travel. In addition, in cooperation with other travel and associated hospitality businesses, such as Airlines 2021 – 03
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travel agents, tour operators and hotels, we will lobby governments and local authorities to focus on stimulation measures to recover passenger travel demand. How important will your low-cost carrier subsidiary be? Are LCCs still viable in the current crisis with low load factors and extra health requirements?
We believe the overall market environment will change signiﬁcantly post-pandemic, and from the current indications it looks like the recovery in demand for business related travel may be delayed. On the other hand, we believe that the pent-up demand for discretionary or leisure travel, such as for tourism and visiting friends and relatives (VFR), which are the main targets of LCCs, will see a quicker recovery and outpace the growth of the rest of the markets. In this environment we believe that the LCC model will have even more importance to meet the diverse needs of this market segment shift. We have been focusing on being a full-service carrier (FSC) so far, and though we will continue to do this, we will also strengthen our LCC business as our second pillar.
“We will lobby governments and local authorities to focus on stimulation measures to recover passenger travel demand”
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2021 – 03 Airlines
How about alliances? Will they remain important post-pandemic or must airlines concentrate on their own survival?
JAL and the entire 14 members of the oneworld Alliance oﬀer customers a high-quality, seamless travel experience for the whole of their journey throughout the world. We recognize that alliances remain extremely important for FSCs. In the post-COVID-19 period, the recovery of overall demand for FSCs on international ﬂights is expected to be depressed and this may result in many airlines being forced to reduce overall capacity until demand increases suﬃciently. With reduced overall networks worldwide, we believe that international alliances and particularly joint ventures are eﬀective in maintaining and improving consumer convenience while simultaneously improving proﬁtability, eﬃciency, and maintaining a competitive environment. Has cargo become more important for you? Can we make cargo processes more eﬃcient?
In the current situation where passenger ﬂights continue to operate at reduced schedules and shipping demand networks are tight, we are responding to increased demand by operating passenger aircraft for cargo ﬂights and forming alliances with other companies. In the future, demand for items that are suitable for high-speed transport, such as e-commerce, pharmaceuticals, and perishables products, is expected to increase, and we would like to meet this demand. In addition, to ensure the stable operation of the air cargo business in the future, we recognize the need to standardize various formats using new technologies and to improve productivity through labor saving and automation in the cargo handling area. Did the Olympics impact your business?
As the host country’s airline and as an oﬃcial airline partner of the Games, we believe that we were able to contribute to the safe and secure Airlines 2021 – 03
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transportation of oﬃcials and participants, which helped lead to the success of the Games amid the ongoing pandemic. Of course, demand for ﬂights to the Olympics and Paralympics was signiﬁcantly lower than initially expected, partly due to the fact that the Games were held without spectators, and partly due to the unique environment related to quarantine measures enforced at the time of entry to not just Japan but also when returning to the home country. Are Narita and Haneda working well or do you need improvements from these airports?
Haneda functions as a domestic hub, while Narita functions as an international hub.
“Of course, demand for ﬂights to the Olympics and Paralympics was signiﬁcantly lower than initially expected, partly due to the fact that the Games were held without spectators” airlines.iata.org
Moving forward, Haneda is expected to further improve the convenience of inbound and outbound connections, and Narita is expected to improve convenience with the third runway planned for 2029.
Maximizing the customer experience is particularly signiﬁcant and we will continue to provide new value and services to customers. Just as important is maximizing the employee experience by creating a comfortable working environment for employees and improving operational quality and safety. We believe both are necessary to achieve sustainable growth and development and so will continue to invest in digital technology. In particular, for safe ﬂight operations, it is necessary to make more investments in online digital marketing and IT technologies, using big data analysis. As a new ﬁeld, next-generation air mobility, which is expected to be more commonplace in society in the future, is expected to utilize safety technology cultivated from airlines. Furthermore, to reduce CO2 emissions from aircraft, it is extremely important to upgrade to fuel-eﬃcient aircraft designed with new technologies and to invest in sustainable aviation fuels (SAF). What more can be done to reduce aviation's environmental impact?
In response to climate change, in addition to the aforementioned upgrades to fuel-eﬃcient aircraft and the use of SAF, the airline will aim to use renewable energy in its ground facilities. Also, to reduce other environmental impacts, JAL will reduce the amount of single-use plastic used and take measures to minimize the amount of on-board food waste. Furthermore, then increased operation of quieter aircraft will also reduce noise levels in areas in close proximity to airports. airlines.iata.org
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How important is it for the industry to continue investing in technology and what technologies excite you most?
What is your view on the industry’s future? Will it be back to normal in a few years or will there be changes in passenger requirements, networks, ticket prices and so forth?
Haneda functions as a domestic hub, while Narita functions as an international hub. Narita is expected to improve convenience with the third runway planned for 2029
Post-COVID-19, we believe that there will be a portion of business-related travel that will be replaced by remote/virtual solutions and it will take some time to completely return to pre-pandemic levels. However, we believe that the industry as a whole will recover and grow, in the shorter term the need for tourism and VFR is expected to increase with the growth of the global economy. In the future, as the needs of customers become more diversiﬁed, by oﬀering safe and secure ﬂights, we will build networks and set prices to meet such diversiﬁcation. What are the lessons learned for the industry from this crisis and have you learned anything personally about leadership in a crisis?
In a global society where people frequently move across borders, the recent pandemic has led many people to recognize or become aware of the risk of movement. But it has also triggered a new awareness of the importance of human interaction and the need to meet face-to-face and the value of movement. There are things that can only be done by moving. Both the risk and the value of movement have become conspicuously apparent. Under these circumstances, the aviation business must ﬁnd the balanced solution of how to reduce the risk and increase the value of travel. As for leadership in a crisis, this requires many skills including the ability to promptly and accurately share information while events and situations are simultaneously evolving and changing on many fronts. It is thus important to create multiple models and scenarios of what is likely to happen in the future and the processes and vision to overcome it. I believe that this will keep the team members highly motivated and enable them to face this and future crises as one. 2021 – 03 Airlines
Sponsored Feature: SGI
Paolo Lironi, Chief Executive Oﬃcer, SGI Aviation
Aircraft returns and redelivery made easy by SGI
SGI Aviation Services provides technical consulting in the areas of aircraft and engine asset management
The pandemic has forced many airlines to restructure their ﬂeet. For leased aircraft, this involves not only renegotiating contract conditions, but also returning the asset to the aircraft owners and managers. Whatever the circumstances, it is essential for an airline to know that the aircraft and its engines stay in optimal technical condition. This maintains the asset’s value and reduces the risk of unexpected costs. SGI Aviation Services has expert knowledge that supports aircraft owners and ﬁnanciers advising on the return, management, and remarketing of returned aircraft. SGI CEO Paolo Lironi states: “Any repossession, either friendly or unfriendly, is often a complex mixture of process steps, further challenged by the commercial and ﬁnancial pressure to make the aircraft re-marketable. SGI is proud to have experts in advising and driving the process to a successful result.” Completeness During redelivery or repossession, aside from the need for speed, completeness in back-to-birth traceability is paramount. This can be assessed while the asset
Airlines 2021 – 03
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remains under continued airworthiness. But because continued airworthiness diﬀers according to the jurisdiction, project management is vital to ensure no detail is unmanaged, or missed, and progress is maintained. The completeness, availability, and quality of aircraft documentation, although under strict guidelines, is understandably varied. There can be insuﬃcient details, missing, or unreadable documents, all ending in signiﬁcant cost. Every component on the aircraft should be traceable back to origin, its maintenance history clear, and its current condition veriﬁable. “You have to be highly experienced and have detailed knowledge to be able to assess the documentation and address what is required to rectify any shortfall,” says SGI Senior Project Manager Serge Vrancken. “This can be a diﬃcult and complex process, but records specialists know exactly where to check.” Onsite teams create a redelivery binder containing all master documents and the many small details necessary for completeness. The team
usually consists of a Senior Technical Representative, a Records Specialist and, on requirement, an Engine Specialist. Generally, the Senior Technical Representative is a generalist team leader responsible for onsite project management and physical inspections. The Records Specialist is focused mainly on document traceability and the Engine Specialist is active on any item concerning engine documentation and also witnesses engine borescoping.
Sponsored Feature: SGI
“You have to be highly experienced to be able to assess the documentation and address what needs to be rectiﬁed” Serge Vrancken, SGI Senior Manager provide a timely and detailed analysis of the choices available. “A project must be managed in such a way that, if a sequence changes, or a completely new item arises, the details are shared immediately with the owner and choices presented to resolve the issue along with the cost and time requirements,” says Chris Water, SGI Project Manager. Water says the big six of project management are: Compliance Quality Predictability Complexity Turn Around Time Cost Continued airworthiness Continued Airworthiness persists even when the aircraft is under parking or storge conditions. Because time limits are also part of maintenance and replacement, the clock never stops ticking. Maintenance and repair is therefore constant and should be considered even if an aircraft is due to be returned. There can be serious consequences if a heavy maintenance check is delayed or even if an aircraft needs repainting.
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When this is combined with the need for speedy redelivery, project management skills become essential. Aircraft owners and ﬁnanciers need clear and predictable information. All scenarios and their consequences must be made obvious, with an emphasis on the ﬁnancial, legal, and commercial aspects. Making the right decisions depends on having the right information or knowing what it will take to obtain the right information. Only an expert in the ﬁeld can
A good project manager should also understand the bigger picture, and that takes time, knowledge, and experience. SGI has a detailed roadmap for aircraft and engine repossession that it updates with every experience. It stands ready to share its knowledge base with the industry. For more information: If you want to ﬁnd out how SGI Aviation Services can help, visit https://www.sgiaviation.com/
2021 – 03 Airlines
IATA Opinion: Muhammad Albakri
Digital builds back better Muhammad Albakri, IATA’s Senior Vice President, Financial Settlement and Distribution Services, says the digital transformation must be customer centric
ILLUSTRATION: SAM KERR
or the industry recovery to take hold as quickly as possible we need to speed up the digital transformation of our ﬁnancial and distribution systems to deliver more value. They must be more eﬀective, less costly, and customer centric. This is not just about implementing technology. Regulators must accept the need for digital processes and eliminate paper requirements. But, of course, industry legacy systems are still the main roadblock. The data exchange standards are hardwired into these systems and some date back 50 years or more. New digital data exchange standards, such as New Distribution Capability (NDC) and ONE Order, are absolutely essential for the industry to progress. It will encourage a win-win situation, where both consumers and airlines beneﬁt. Of course, it is diﬃcult to commit to new projects at the moment with funds so limited and rules and guidance regarding travel changing constantly. But what we do know is that the industry continues to burn through cash. And the debt burden is becoming greater by the day. Improving ﬁnancial resilience— ensuring whatever revenues are generated are processed in a timely, reliable, and eﬃcient fashion while reducing delays and costs—and providing greater ﬂexibility to handle new payment methods are therefore essential. There are a number of elements to this work. First is the need for cooperation throughout the aviation value chain. This is the fundamental takeaway from the crisis to date. Airlines cannot bring change in isolation. It requires all stakeholders, including governments, to work together to look for opportunities to transform the industry through the use of technology and data. airlines.iata.org
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IATA is working through three advisory councils—the Distribution Advisory Council (DAC), the Financial Advisory Council (FINAC), and the Digital Transformation Advisory Council (DTAC)—in search of these opportunities. The aim is to not only support airlines through new standards and tools but also to bring new stakeholders to the table. Understanding areas as retail, dynamic pricing, and consumer behavior could make all the diﬀerence, especially to those airlines that are struggling. Consumers want choice and the ability to pay in a manner that suits them. But we can’t add costly processes. The fact is it costs airlines more than $10 billion to process payments in a normal year, which is more than the cost of distribution. We must reduce that amount. IATA Pay is a new initiative that supports ticket purchases via direct bank transfer. We expect it to produce signiﬁcant industry savings and greater security for all. Another area for improvement is the Cargo Accounts Settlement System (CASS). The new version will be developed in phases in 2022 and be fully functional in 2023. Cargo has been a shining light throughout the crisis and has evolved new business models. Shipments go through a number of players, and we need to give all of them digital options for exchanging information and payments. The new CASS will include far more functionality. We have put the customer at the front of our thinking in all areas. Oﬀering customers greater choice is the way forward but it will be a step back if we create cumbersome processes to service their choices. Introducing new data exchange standards, new payment initiatives, and more eﬃcient settlement systems will lower the cost of supply. In a time of crisis, the value this will bring to all parties cannot be ignored.
2021 – 03 Airlines
sharp fall in demand for aviation fuel saw the industry bill go down from $186 billion in 2019 to just $78 billion in 2020. Supplies built up, and ﬁxed and ﬂoating storage facilities were quickly ﬁlled. This caused a price drop and May 2020 futures contracts for WTI crude actually hit a negative rate. But this proved temporary. Prices returned to about $70 per barrel by mid-August 2021 as key domestic aviation markets started to improve. Even so, Sustainable Aviation Fuels (SAF)— the future of the aviation fuel market—remain more expensive than conventional fuel. SAF are an extremely eﬀective tool for reducing CO2 emissions. They are delivered as a drop-in solution, meaning that they are blended into conventional fuel outside the airport and thus require no additional infrastructure. Nevertheless, insuﬃcient supply and high prices mean that SAF uplift has been just a small fraction of the 0.1% of total fuel volume that airlines would consume in a normal year. SAF need governments’ support to scale up production and bring down the price. Airlines are striving to reduce emissions but also coming out of the biggest crisis ever with empty coﬀers. Despite this, in Europe, the “Fit for 55” package proposes additional fuel taxes for intra-European ﬂights that could have a massive impact on all future fuel prices and will certainly increase costs for airlines. IATA opposes fuel
Managing fuel concerns as the industry recovers Fuel presents a diverse picture as airlines strive to recover from the devastating impact of the pandemic.
$78 billion Industry’s fuel bill fell from $186bn in 2019 to $78bn in 2020 Airlines 2021 – 03
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taxes to solve environmental concerns and instead emphasizes the need for governments to promote the roll-out of SAF. “Aviation is committed to decarbonization as a global industry,” says Willie Walsh, IATA’s Director General. “We don’t need persuading, or punitive measures like taxes to motivate change. In fact, taxes siphon money from the industry that could support emissions’ reducing investments in ﬂeet renewal and clean technologies. To reduce emissions, we need governments to implement a constructive policy framework that, most immediately, focuses on production incentives for SAF and delivering the Single European Sky.” Fit for 55 proposes a mandate to increase SAF utilization to 2% of jet fuel use by 2025 and at least 5% by 2030. It does not, however, suggest any speciﬁc measures to reduce SAF costs. Hedging
The industry’s pandemic-induced ﬁnancial struggles are even aﬀecting airlines’ ability to manage conventional jet fuel. “Hedging requires a reasonably safe forecast of volumes and credit lines with the banks,” says Alexander Kueper, IATA’s Director, Fuel. “Both are a challenge at present for some airlines, which makes it extremely diﬃcult for them to protect themselves against price increases through hedging.” The outlook for the fuel market is aligned with the recovery of air travel. Although domestic traﬃc looks strong, international travel presents a more complicated picture. Fuel for international travel made up around 65% of total fuel used pre-COVID-19, so demand is due to remain unpredictable for the foreseeable future. Some reﬁners have even raised diesel production. It remains to be seen how many will switch back to jet fuel once demand returns. Supply issues
At least no signiﬁcant supply bottlenecks are expected as the industry returns to strength. In fact, the pandemic eased a few infrastructure pain points. airlines.iata.org
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“Aviation is committed to decarbonization as a global industry. We don’t need persuading, or punitive measures like taxes to motivate change” Willie Walsh, IATA’s Director General
Digitalizing the refueling process Fuel orders, delivery tickets, receipts, and the suchlike have been paper-based since inception and in some locations that remains the case. But a digitalized process saves time and money, avoids errors, and simpliﬁes the interaction between cockpit crew and refueling staﬀ. “We must accelerate this journey to beneﬁt from substantial eﬃciency gains and increased transparency,” says Alexander Kueper, IATA’s Director, Fuel. To ease the implementation of digital solutions, the IATA Fuel Data Standards Group (FDSG) has already incorporated the use of digital signatures for compliance with diverse local regulations. At Boston Logan Airport, i6, a startup in the JetBlue Technology Ventures portfolio, has implemented its full suite of tools to aid the refueling process for the entire fuel supply chain. “Our technology provides a comprehensive platform for the into-plane operator so that they can better plan, allocate, and track the entire refueling process,” says Steve Uhrmacher, CEO, i6 Group. “This includes the moment that the fuel order is ﬁrst placed through to post-event reconciliation.”
Some airport fuel depots in Europe were facing capacity problems before the pandemic, but now have suﬃcient capacity to cover demand peaks without additional weekend deliveries, for example. Also, the European NATO (CEPS) pipeline had more demand than capacity before the pandemic, which is no longer the case. There are some challenges though. In the United States, a shortage of truck drivers is causing supply issues at smaller airports while larger facilities worldwide are seeing sharp increases in infrastructure unit cost, which is being passed on to the airlines. “We acknowledge the need of infrastructure operators to cover the cost and keep the infrastructure running, but there has been a lack of transparency in quite a few cases,” says Kueper. “IATA is advocating for more transparency, which, at least for the European locations, is a legal requirement set by the EU Ground Handling Directive.” In Africa, meanwhile, the drop in fuel volumes initially eased pressure on fuel infrastructure challenges at certain locations. But volumes are improving, and concerns remain. In addition, the fuel price on the continent continues to be, on average, higher than in other regions. Some airports lack competition and others have fuel prices set artiﬁcially high by governments. How the various factors aﬀecting fuel will play out as the industry returns to normal is diﬃcult to ascertain. Fuel has always been a signiﬁcant cost for airlines. But the pandemic and subsequent recovery has blurred the picture as digitalization, new aircraft, and environmental mitigation, both mandated and voluntary, add new pressures to supply and demand.
2021 – 03 Airlines
wenty years’ ago, the tragedy of 9/11 was a pivotal moment in modern civil aviation history. An industry that had built peace by connecting nations had been used as a weapon of terrorism. Traﬃc plummeted temporarily and the approach to protecting aviation from terrorism took on a completely diﬀerent dimension. Most visibly for air travelers, it led to the transformation of the airport security checkpoint and—together with subsequent foiled plots, such as the shoe bomber—fostered an array of measures intended tow ensure that such events could never be repeated.
As the industry begins its recovery in a post-pandemic world, the lessons learned from the 9/11 response should not be ignored. WORDS: GRAHAM NEWTON
The positive aspect of the security changes
48 brought about by 9/11 is that there has been no repeat of an attack on that scale. “That is thenumber one KPI (key performance indicator),” says Matthew Vaughan, IATA’s Director, Aviation Security and Cyber. “Aviation has become too diﬃcult a target for terrorists and from an aviation security performance perspective that means the counter measures have largely worked.” But there are caveats to this assertion. Questions surrounding risk assessment, secure passenger facilitation, and collaboration throughout the value chain must be answered. Risk assessment is an aviation strength but can be a less precise science in the public arena. After 9/11, for example, many people in the United States took to their cars for long journeys, either owing to terrorism fears or to avoid long waits and hassles at airport security. The unintended consequence was higher automotive fatalities. Without a risk assessment, blanket measures necessarily cover every eventuality. Post 9/11, every airport forced passengers to divest certain articles, causing long queues until process maturity could be achieved. Fortunately, aviation has evolved the primary security layer to strike a balance between getting the overwhelming majority of low-risk passengers Airlines 2021 – 03
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Learning the lessons from 9/11 airlines.iata.org
through the airport while providing a protection layer for high-risk (or untrusted) passengers that is both physical and digitally based at the airport main gateways. This balance has been principally aided by predictability. Of course, there needs to be an unknown element to any checkpoint, so the passenger does not entirely know what to expect. But Vaughan says this cannot come at the expense of a large degree of predictability. “Otherwise, queues would be out the airport door because people would not come to the airport prepared,” he says. “The holy grail is getting the passenger from curb to aircraft, based on informed risk assessment, without needing to unnecessarily stop them. “Security risk varies according to the origin, destination and numerous other factors,” continues Vaughan. “The guidance is there to ensure harmonized but scalable solutions. A proper risk assessment and implementing appropriate time-sensitive responses should not be an insurmountable obstacle.” Parallels with COVID
Vaughan accepts that security still isn’t seamless, and the passenger experience has suﬀered. “This shouldn’t be repeated with [COVID-19] health protocols,” he says. There are, however, parallels. Just as security measures increased enormously
“Aviation has become too diﬃcult a target for terrorists and from an aviation security performance perspective that means the counter measures have largely worked” Matthew Vaughan, IATA’s Director, Aviation Security and Cyber
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Known Traveler Programs Biometrics is often touted as the solution to managing facilitation and good security and border controls. The technology is a nearperfect way of managing identity that should generate trust between diﬀerent parties in the aviation travel chain, including border control, airports, and airlines. Some 70% of the world have subscribed to e-identiﬁcation guidelines endorsed by ICAO and the pandemic has only served to emphasise the opportunity. But the technology alone is the not the answer. Vaughan turns to known traveler programs to illustrate the point. “Twenty years’ on from 9/11, it’s really only the United States and Canada that have developed known traveler programs,” he says. “A major problem is that the programs mean little outside home jurisdictions. And there are limited risk-based processes when it comes to security. “We learned that these programs are border-controlfocused and not necessarily security-focused,” continues Vaughan. “For example, Australia was one of the ﬁrst countries to establish interactive API post-9/11 but didn’t leverage that to correlate it with the risk a passenger represents to ﬂight.” In health safety terms, therefore, it means vaccination and testing status must be aligned with a passenger’s biometric ID. A secure method of exchanging passenger health information will be a necessary element of the industry recovery.
2021 – 03 Airlines
after 9/11, the industry is now faced with blunt tools such as quarantines which is going to take time to roll back or modify based on viable risk-based compromises. Though some government leaders imply international travel has contributed to the spread of the virus, it is not as important a factor as many would perceive. And over the past 18 months of experience much has been done to reduce the risk. Studies have concluded that the onboard environment is among the safest enclosed spaces, and the correct vaccination and testing protocols add further preventative layers. “There are diﬀerent epidemiological situations across the world and that will continue to be the case,” says Vaughan. “There should be risk assessments in place just as there should be in security.” Risk assessment simply ensures measures are usefully applied where the risk is greatest or largely unknown. The key to achieving good security and managing health protocols while ensuring passenger throughput at pre-COVID traﬃc levels is collaboration and speciﬁcally stakeholder exchanges borne of trust. In some respects, 9/11 improved collaboration signiﬁcantly. Intelligence agencies worked together to stop further threats and a security culture involving governments, airports, and airlines developed that has persisted. The same can be achieved with health authorities and there is already evidence of this with the sharing of knowledge regarding variants. IATA security initiatives have helped to progress the security situation too and establish best practice. Similarly, the IATA Travel Pass oﬀers a ready-made format for presenting health information. Lack of trust
Despite this, Vaughan believes the level of bi-lateral and multi-lateral trust that had enabled international aviation to grow has not been so evident in the security arena since 9/11. “We have been stuck with onerous and, for transit passengers, repetitive security Airlines 2021 – 03
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After 9/11, many people in the United States took to their cars for long journeys, either owing to terrorism fears or to avoid long waits and hassles at airport security
70% Some 70% of the world have subscribed to e-identification guidelines endorsed by ICAO and the pandemic has only served to emphasise the opportunity
requirements because each country essentially wants to secure its own borders,” says Vaughan. “They don’t trust another government to do it for them. And in truth, universally, there has been little pre-decisional consultation with the industry on implementation, on what security measures mean for risk and what they mean to air connectivity and passenger facilitation. The same has happened for health protocols in the pandemic too.” For Vaughan, the way forward for both security and health safety is clear. “After 9/11, we saw a reaction to speciﬁc threats that then became ingrained,” says Vaughan. “The regulatory response was designed to bring conﬁdence back, but certain aspects should have been temporary and not permanent.” It means innovation has been focused on solving problems that need not exist. Furthermore, given the parlous state of aviation ﬁnances, it is unlikely that there will be a great deal of security innovation in the near future. Added to this is a seeming lack of political will to develop and/or endorse speciﬁc industry solutions. Today’s measures—for both security and health protocols—will have to stand the test of time in terms of investment and maintenance cost. “We do need the funding for research and development and to run pilots,” Vaughan concludes. “But we are not walking away from innovation. We have a vision for seamless passenger travel. And with the lessons learned from the security arena since 9/11, it makes aviation an ever-growing area of opportunity for solutions that leverage technology to balance excellent security or health safety with strong passenger throughput.” airlines.iata.org
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