Remarks of Philip Goh - Regional Vice President, Asia Pacific, IATA at the Airline Industry Day in Vientiane, Laos on 6 September 2023.
It gives me great pleasure to be in Vientiane today for the Airline Industry Day in Laos. IATA is delighted to partner with and support Lao Airlines to organize this event.
The theme of today’s event is Tapping on Lao Aviation's Potential – it is an important idea to explore, especially as the aviation industry emerges from the devastating impact of COVID-19.
The last three years have been the most challenging in the history of aviation. Never have we seen governments shut their international borders and for such extensive periods.
We have never seen so many airplanes grounded and parked at airport tarmacs all over the world, going nowhere. And almost overnight, the disappearance of passenger traffic at international airports. We were all shocked.
Between 2020 and 2022, the global airline industry recorded massive losses totalling about $180 billion US dollars. Airlines in our region, the Asia-Pacific, accounted for about 40% of worldwide losses – or over $70 billion US dollars.
But fast forward three years. The good news is that a strong recovery is underway.
As of June 2023, total global passenger traffic has reached 95% of 2019 levels, led by domestic traffic recovery, which has already exceeded pre-pandemic levels. International traffic has lagged domestic recovery but is still very encouraging, having reached 88% of June 2019 globally.
The reopening of international borders in the Asia-Pacific region lagged the other regions, so does our recovery. In June, international traffic for the Asia-Pacific region was at 71% of pre-pandemic levels whereas traffic for the North American region has already exceeded pre-COVID levels.
We are slower in recovery, yes. But we are moving in the right direction. We expect the global airline industry to record a cumulative profit of $9.8 billion US dollars in 2023.
However, profitability for Asia-Pacific carriers will not come early - we expect our region’s airlines to report a collective loss of $7 billion US dollars this year. There are some airlines in the region that have reported good performance improvements in the past quarters and the past year. But not everyone is out of the woods yet.
In Laos, your aviation sector was not spared from the impact of the COVID-19 pandemic. But there is good news as our projection shows Laos’ passenger numbers should recover to pre-COVID levels in 2024.
Aviation is a key contributor to a country’s social and economic development. So, as we emerge from COVID-19, we believe that aviation and connectivity can play an even bigger role in Laos’ economic development and social advancement.
The agenda for today’s event covers the key areas that need to be considered as the Laos aviation industry moves forward. I will elaborate on a few key considerations.
First is digitization.
Aviation infrastructure must facilitate the growth of the air travel market with contributions and inputs from all players in the industry ecosystem.
It means having an updated infrastructure masterplan to ensure timely readiness of airport capacity, be cost-effective and sustainable, in order to meet anticipated and projected traffic growth.
At the same time, planning ahead, the authorities must look to digitize passenger handling processes to replace time consuming paper processes and unlock the convenience and speed that modern technology can bring to this industry.
Unfortunately, many of today’s air passenger and air cargo processes are still very paper-based. As passenger traffic grows, we will run out of space and resources to cope with the growth. It is unrealistic to assume we can keep building larger airport terminals and increase manpower to handle more passengers. We must use technology to move more people, more baggage, and more cargo through airport terminals faster.
IATA has a One-ID initiative that aims to digitize passenger processing with digital admissibility, improve passenger handling at airports, and enhance travel experiences, while delivering efficiency and maintaining data security and privacy. Biometric solutions using a common standard and language for inter-operability between different systems and jurisdictions are part of the One-ID program.
This same digital transformation program can also be applied for air cargo handling through the IATA One Record project implementation. It seeks to transform the heavily paper based air cargo processing into more efficient digital processes.
Governments and regulators have important roles to play to facilitate policy development and regulations to enable the automation and modernization of these processes, in line with industry best practices.
Next, I like to talk about safety.
Safety underpins everything that we do in aviation. It is therefore paramount that Laos’ aviation sector grow in a safe manner.
The global aviation industry has a good safety record. In 2022, we saw a reduction in the number of fatal accidents and the fatality risk, compared to 2021 and compared to the five-year average from 2018-2022.
Safety is not something we can take for granted. The IATA Operational Safety Audit (or IOSA) is the global standard for managing operational safety. IOSA is helping to improve safety, and there are currently more than 400 airlines on the IOSA registry, including Lao Airlines. In 2022, IOSA-registered airlines outperformed those that are not on the registry by a factor of four.
In ground handling, IATA also actively strives to lead the industry towards improved safety and operational efficiency. We do this by setting standards, driving sustainability, and promoting the implementation of standardized global solutions. We encourage the authorities here to explore how both the IATA Safety Audit for Ground Operations (ISAGO) and the IATA Ground Operations Manual (IGOM) can contribute towards enhancing ground safety performance in Laos.
Another important subject on the safety agenda is cargo safety; particularly the shipment of dangerous goods and lithium batteries.
Around 80% of lithium batteries are made in Asia. They can be shipped safely by air cargo if they are packed, handled, and labeled correctly. However, while steps have been taken to prevent lithium battery incidents, they remain one of the greatest threats to flight safety if preventive measures are not properly implemented.
With the increased use of lithium batteries in our everyday lives, and the increasing air transport of lithium batteries, IATA is running a campaign in our region to raise the awareness of transporting lithium batteries appropriately.
Everyone in the aviation value chain – whether airlines, shippers, agents and forwarders, airports, regulators, and others – everyone has an important role to play to safeguard lithium battery shipments and eradicate threats and risks.
The third and final key topic I like to highlight is sustainability.
As our industry gets back to a growth trajectory, it needs to grow more sustainably. As an industry, airlines committed in 2021 to achieve Net Zero carbon emissions by 2050. This was matched last year by ICAO at its 41st Assembly when the 193 ICAO member States agreed on a Long-Term Aspirational Goal (or LTAG) to achieve the same target of net zero emissions by 2050.
This year, IATA published a series of Roadmaps presenting the pathways to achieve net zero by 2050. These Roadmaps are the first detailed assessments of the key steps needed to make net zero by 2050 a success. It covers technology, fuel infrastructure, operations, finance and policy.
The journey to net zero not only concerns airlines. Governments, suppliers and manufacturers, airports, financiers, all have a role to play. Each must deliver the products, the policies or the investments needed to decarbonize our industry. Government policy must create a level playing field for all airlines operating to and from Lao to transition progressively to the use of more sustainable aviation fuel and to do so more easily.
My team and I at IATA look forward to working with the government to achieve aviation’s goal of net zero by 2050.
The discussions and presentations from today’s Airlines Industry Day in Laos can help inform how we can go about tapping on Laos aviation’s potential to contribute well to the country’s economic and social goals and targets.
The IATA team looks forward to working with the Laos aviation community – airlines, airports, government, regulators, and other partners – to make this potential become a reality for the good of the Laos people.
Thank you.
