Skip to main content

Test Home

Search

You are here: Home » Pressroom » Speeches
  • Print this page
  • Share this page

Date: 16 April 2007

IATA OPS Forum, Montreal

After 6 years and over US$40 billion in losses we can see a small profit on the horizon: US$3.8 billion. Hard work is turning the industry around. Non-fuel unit costs reduced by 15%, simplifying the Business will save US$6.5 billion a year. IATA negotiated US$2.1 billion of savings with monopoly partners last year and airlines pushed load factors to nearly 75%. But there is still a long way to go. US$40 billion profit is needed just to cover the cost of capital.

The conference theme is “Managing Growth Safely and Efficiently.” Let me offer a fundamental reminder: airlines are businesses and shippers and travellers are our customers. Long-term profitable growth means meeting their expectations. Customers expect to travel safely and securely. These are the top priorities. But they also expect to travel comfortably, efficiently and on-time in a cost-effective manner that is environmentally friendly. Your conference mission is to align the industry players with a common vision for the future that reflects the critical role of operations in delivering on customer expectations. And you are the people who can meet these expectations.

Safety

The industry is safer than ever. Our new 2006 Safety Report shows a 2006 hull-loss rate of 0.65 globally and 0.48 for IATA carriers. This shows our members’ commitment and the value of IATA’s efforts. But let me be completely honest. With more planes than ever flying and growth of 5-6% per year, we have an enormous challenge. The accident rate must decrease just to keep these same results is not enough. The ultimate target is ZERO accidents. Clear goals and strategy are needed—and in place.

IOSA

First IOSA is now a condition of IATA membership. The results are impressive. 97.5% met the first deadline. And I terminated 6 member airlines that did not commit. The next deadlines will be more difficult – to complete the audit and join the registry. IATA is a quality association, committed to safety. Our greatest satisfaction is to have all of our members on board. But we will not compromise. Our members must achieve the standard and as a result IOSA has credibility. It is available for all airlines and 25% of those audited are not IATA members.

Moreover, there is a growing list of governments using IOSA. Egypt, Chile, Madagascar and many States in the Arab Region have mandated IOSA, while the US, France, Switzerland, Canada and Australia use IOSA in their own safety oversight programmes. More governments need to take this on board.

ISAGO (Ground Handling Audits)

I am pleased to announce that we are taking the IOSA concept and applying it to ground handling. To mitigate the US$4 billion direct cost to industry property, a figure that grows to US$11 billion if you add in the human costs of compensation, healthcare and so on. The standards for IATA Safety Audit for Ground Operations (ISAGO) are currently being developed. The programme will roll-out next year. Standard development is underway and the first audits will take place in 2008.

Integrated Approach

Safety requires a team effort with individual airlines and with global stakeholders. With airlines, we are leading with implementation of Integrated Airline Management Systems—Integrated AMS. They bring together 5 key areas: safety, security, risk management, internal quality management and quality management of outsourced functions such as maintenance, repair and overhaul.

The initiative incorporates ICAO guidance on Safety Management Systems. Already we have incorporated Integrated AMS into IOSA and we will release the Integrated AMS Toolkit today. At the global level we worked to align all stakeholders with a common vision to take safety forward: The Aviation Safety Roadmap.

Insurers

As a result we are confident that we will make our next target – a further 25% improvement in the accident rate by 2008. Transparency is always key. For example IOSA registered carriers are available on the IATA website. So I challenge insurers to transparently respond to our efforts and to recognise and reward the industry - not for our efforts, but for our results.

Security

Hand in hand with safety is security. Global standards guide our work on safety. Security is still an uncoordinated costly mess. This reduces the effectiveness of our measures and frustrates our customers. ICAO has a clear and critical role to bring governments on board with a common approach. I’ll be frank. We are well behind in the process and ICAO must step up its efforts. We are much more secure than in 2001 but the system is far from seamless. And too often carriers are left to explain to their customers the gaps in the global system.

There are two main issues that must be addressed with urgency. First, we must make better use of technology in processing passengers. Simplifying the Business is improving the process prior to the security check-point. We must make better use of technology in facilitation and biometric identification is part of the solution. Second, we need to sort out cargo security. Governments are focused on screening often ignoring that we must make the supply chain secure. In many cases, governments don’t recognise each others’ standards. Almost 6 years after 9.11 it is time to look at the big picture. We have made the industry more secure but we do not have a common vision to move forward together. We must apply what we have learned from our safety success to make security even better—with global standards and harmonisation.

Air Traffic Management

And let’s not stop there. Air traffic management is also too fragmented and growth will be limited by the weakest links in the system. Through ICAO, we agreed to an air traffic management roadmap so there is no excuse to get lost. We must work together to implement it. Air Navigation Service Providers must understand what airlines need, at what cost and on what timetable. And airlines must communicate with a common voice. Two elements are key:

Aircraft Capabilities

First, let aircraft operate using the technology that already exists in the cockpit. Airlines invest enormous amounts of money for avionics and on-board systems designed to integrate with the air traffic system. On a single aircraft this could be up to US$ 5 million. But we are not making full use of their capabilities because air traffic management is a patchwork of different plans, strategies, capabilities and technologies. So when we fly from one provider to another we are forced to operate at the lowest common denominator with maximum spacing between aircraft. Letting aircraft operate more independent of ground infrastructure is safe, efficient and cost effective.

A simple example: ground-based systems direct traffic to navigation beacons. This creates congestion. Area Navigation (around for 30 years) allows flexibility and avoids congestion by providing parallel flight paths. Today’s area navigation is backed up with GPS technology so ground based navigation aids are no longer required and Datalink capabilities that make communication more accurate. Moreover, the datalink network can interact with Automated Dependent Surveillance (ADS).

Pragmatic Measures

ADS is here and ready. It is a tenth the cost of traditional radar and it gives greater accuracy, improving safety. ADS is the agreed technology for the ATM roadmap. The US, Europe and others are all looking at next generation systems. This is important but let’s not get distracted with the bells and whistles. If we wait for the perfect technology we will never implement. As we implement the roadmap, we must focus on pragmatic measures that deliver results. So, let’s implement the agreed ADS basics quickly and drive further benefits with cost effective software upgrades.

Environment

Finally let’s keep in mind that environmental responsibility must remain one of our guiding principles. And we should be proud of our environmental results. Aircraft are 70% more fuel efficient than 40 years ago. Traffic is growing at 5-6% but efficiency measures are limiting emissions growth to 3%. By 2020, investments in new aircraft will improve global fuel efficiency by 25%. In total we are 2% of global carbon emissions and by 2050, the UN expects that we will be 3%. Considering that we support 8% of the global economy the performance is good. But, like all industries, we must do better.

Everyone in this room knows that improved efficiency means less fuel burned and this is positive for the environment. IATA’s environment policy is based on that reality and requires the cooperation of all of our partners. First, focus on technology to drive improvement. That means everything from more fuel efficient aircraft to alternative fuels. The A380 and Boeing 787 will drive fuel consumption below 3.0 litres per 100 passenger kilometers.

The European aerospace industry is committed to having technology available in 2020 – that is 50% more efficient that what is available today. And we must think beyond that to further improvements. Second, air traffic management must improve. The UN estimates that there is a 12% inefficiency in air traffic management. That means 73 million tonnes of unnecessary CO2 emissions. What needs to be done? The list is long: make a Single European Sky a reality, fix the Pearl River Delta, upgrade the overloaded US ATM system or simply eliminate delays wherever they exist. And solutions are possible. Last year alone IATA’s work on over 300 routes resulted in up to 15 million tonnes of CO2 savings. But there is much more that needs to be done.

Third, we are fighting taxes and charges. They have no environmental benefit and rob us of the cash needed for environmental investment. We are also working with governments—and ICAO—on emissions trading. We must achieve a global solution that is open and fair with other industries, globally harmonised and that recognises our achievements with effective incentives to do even better.

As with security, ICAO’s role is critical and there is some catching up to do. CAEP gave us the technical guidance but we are behind on the political dimension. IATA and its membership is supporting the process. Now governments need to step in with ICAO and show some leadership to move the September Assembly to a conclusion. And finally we are communicating to ensure that governments and our customers understand the industry and the good results that we continue to deliver.

Conclusion

As you can see, the challenges are many and effective solutions must be team efforts. You have a great opportunity – the leadership in global operations is in this room. The industry—and our customers are depending on you to improve safety and security, drive efficiency, make better use of air space and deliver even better results on the environment.

ADVERTISEMENT


Additional information

© International Air Transport Association (IATA) 2014. All rights reserved.