Resilience is critical to the air transport system. Our networks connect 20,000 routes, with over 100,000 flights daily serving over 4 billion passengers annually. When things go wrong, we need to recover quickly.
In my remarks today, I would like to focus on systemic disruptions to air transport, rather than individual airline events. In dealing with these, we can rely on some core principles that have guided aviation for decades.
- First, as a global business, aviation relies on global standards and best practices, never more so than in a crisis.
- Second, aviation is built on partnerships which builds resiliency into the system.
With these principles in mind, let's look at the 2010 volcanic ash cloud crisis—the most disruptive event of the last decade. Authorities closed airspace over northern Europe for more than a week, leading to tens of thousands of flight cancellations.
Authorities were concerned about the safety impact of ash on aircraft engines. But they reinvented the wheel—ignoring that aviation has a long history of safely managing through volcanic eruptions, without closing off continents to the benefits of aviation connectivity. Global standards and best practices were not followed and the result was economic catastrophe. Airlines lost $1.7 billion because of the shutdown and the total economic impact was almost incalculable.
Fortunately, we learned from that disaster. Government and industry stakeholders formalized procedures, based on existing standards, to ensure that such events are better managed in future. And we have seen them work very well in more recent eruptions.
Another example, where a working together approach is vital to business resilience, is the aftermath of terrorist attacks. The attacks in Europe in 2015-16 reduced European international passenger traffic by 1.6% and cost airlines and the economy – particularly the tourism economy – billions in lost revenue. Terrorists target aviation and tourism because it is a highly visible target, but such actions affect us all. Experience shows, however, that if we stand together, then the desire to travel overcomes the fear terrorists attempt to sow.
But it is important that we work together with a measured policy response to such attacks. We all remember the atrocities in Brussels two years ago. We can never pay enough tribute to the heroic efforts of the airport and airline staff to resume operations.
But the political decision to place additional screening at the airport entrance was not in keeping with industry experience and best practices. It created a new and more vulnerable area—as well as extensive delays.
Unilateral actions, particularly on security, create a huge challenge to system resilience. Last year's partial ban on large portable electronic devices (PEDs) introduced by the US and UK contributed to slower growth in the Middle East.
In the wake of these actions, we opened a dialogue with the US Transportation Security Administration (TSA). The focus was on achieving their security goals, while minimizing the impact on operations and passengers. Ultimately, the PEDs ban was lifted, but airlines struggled mightily to achieve alternative measures acceptable to the TSA in a short timeframe.
What did we learn from this? First and foremost, we were reminded that we share a common goal of security with governments. And it was clear that we are more successful when we work together and keep lines of communication open. Governments have the information about potential terrorist activity. But airlines have the experience in implementing regulations. We need to work together to ensure the resilience of the system.
To conclude, I turn to the topics of airline bankruptcy and industrial action. The economic pressures on airlines can unfortunately result in some going bankrupt. If that happens in Europe, we have established a voluntary agreement to offer rescue fares to bring people home. This shows that airlines have their eye on the bigger picture and the resilience of the air transport network.
These same economic pressures are sometimes the cause of airline strikes. For example, when management are unable to convince unions of the need to make difficult staffing or salary decisions, when operating in an extremely competitive marketplace. But this is not an excuse that can be made for the continual strikes we see in the air traffic management sector.
Air traffic controllers enjoy stable employment and healthy wages, yet strikes continue, costing millions of minutes of delay and billions in lost economic activity. It is an unacceptable situation. The solution lies in working together. In Europe, for example, it is technically feasible for another country to manage the skies over a country undergoing an ATC strike. It is politically difficult. But we owe it to the world's air travelers to improve this situation. We shouldn't be testing our passengers' resilience to the same extent as the air transport network!
Thank you and I look forward to your questions.