Ladies and gentlemen, thank you for such a memorable evening and such a wonderful honor. Mr. Welch Pogue is a legendary visionary who helped build the foundation of our great industry. As aviation was struggling to define its post-war form, Mr. Pogue had a vision beyond his times. He could see an industry where airlines connected the planet in skies that were kept safe and open with global standards. That was the premise of the Chicago Convention which Welch Pogue signed on behalf of the US. IATA’s first Director General Sir William Hildred was also instrumental in the Chicago Convention on behalf of the United Kingdom. So it is not coincidental that throughout IATA’s history, we have shared and contributed to the same vision.
I would like to extend my sincere thanks to the International Aviation Club of Washington, Aviation Week and Jones Day for partnering to remind us all of this extraordinary man and thanks also to the Pogue family for their continued support of the aviation industry.
During my time at IATA, I hope that I have been able to play even a small part in furthering Welch Pogue’s vision. First, I believe that we can be proud of being the safest way to travel. In 1945, the year after the Chicago Convention was signed, we had 9 million passengers and 247 fatalities. Last year, we carried 2.4 billion passengers with 786 fatalities. Every fatality is human tragedy reminding us that safety is a constant challenge.
The IATA Operational Safety Audit (IOSA) is rising to that challenge. Many of our partners in developing IOSA are here in this room, proof that safety is a common commitment to our top priority. In line with Welch Pogue’s global vision, IOSA is an open standard for all the industry. The global Western-built jet hull loss rate in 2010 was its best ever with one accident for every 1.6 million flights. And IATA carriers, for whom IOSA has been a requirement since 2008, also had their best year ever with one accident for every 4 million flights. Our ultimate goal must be zero accidents, zero fatalities for all airlines. That means constantly evolving the cooperation between industry and government, certainly as Welch Pogue would have wanted.
Unfortunately our success on safety is not matched by our record on profitability. Mr. Pogue would not be impressed with a 0.1% margin over the last 40 years. In the decade to 2009, airlines lost almost $50 billion and that was despite an enormous re-engineering of the business. Since 2004, IATA worked with airlines and partners to achieve over $55 billion in cost savings. E-ticketing and the Simplifying the Business Program have saved over $18 billion. IATA has worked with industry partners to shorten over 2,000 routes, spread best practice in fuel management and reduce operating costs to save another $18 billion. Finally, we challenged our monopoly providers to deliver greater efficiency contributing $19 billion in savings from charges, taxes and fuel fees.
I believe that sustainable profitability will come with normal commercial freedoms. The US has taken a leadership role with deregulation and open skies and the US supported IATA’s Agenda for Freedom initiative that laid a foundation for eliminating national ownership restrictions. Part of the curse of being such a wonderful and exciting industry is that political emotion can stand in the way of building a sustainable business. But I am confident that change will eventually come as it did over the last decade in the industry’s approach to environment.
IATA and the industry have taken a global leadership position by working with governments, including the US, to set global targets to mitigate climate change. We are committed to improve fuel efficiency by 1.5% per year to 2020, to cap emissions with carbon-neutral growth from 2020 and to cut emissions in half by 2050 compared to 2005.
The decade also challenged us on security. I took office at IATA as the industry was recovering from the tragic horror of 9/11. I spent much time working with successive Department of Homeland Security (DHS) Secretaries to build a global approach on security. With Secretary Napolitano, DHS is now working with industry to set an agenda for global leadership on security. To solve this long-term challenge, all governments must action the principles of cooperation outlined in the Chicago Convention with globally coordinated measures.
Despite the challenges, this is the world’s most exciting industry. I could talk about our great past and promising future at much greater length but I will keep my remarks brief and conclude by humbly accepting this great honor. I share it with many people who have helped in the accomplishments of the last decade. This includes governments and industry partners who have worked with IATA through ten challenging years of crises and shocks and the global IATA team, especially our Washington office, who work with all of your on a day-to-day basis. We are all part of a great, fascinating and wonderful industry that can only be successful, as Welch Pogue understood, with global cooperation between industry and government.
As you know this is my last visit to Washington as IATA’s Director General and CEO. After nearly 10 years at IATA, I am looking forward to seeing the industry from the perspective of boards and teaching. And I am confident that my successor, Tony Tyler, will take IATA to even greater heights, contributing to the industry and to Welch Pogue’s vision. Thanks again for this great honor.