Good afternoon and thank you for the invitation to speak to you today. This is my second time to address this club. I only wish that it was in-person and in happier times.
Considering the virtual format and assuming that we have all spent too much time in Zoom, Webex and Teams calls this year, let me get directly to what I want to say today. And then I will look forward to taking your questions.
The first point is to emphasize the urgency of opening borders with testing and without quarantine measures.
We expect to end 2020 with passenger traffic down 66% on 2019. And that is largely because of travel restrictions like border closures or quarantine measures. If people could travel, they would. We saw that throughout the year with spikes and falls in reservations as countries entered or left the UK’s quarantine list. And that is consistent with our research which tells us that over 80% of people will not fly if it involves quarantine.
Nobody disputes the motives of any government in their attempts to keep their people safe and get ahead of the pandemic. I will say that following the logic of the UK’s continuously evolving approach has been beyond challenging. Extreme frustration is a better characterization.
The economic cost of effectively sealing the country is high. London has lost 67% of its connectivity. At the beginning of the pandemic it was the world’s best-connected city. Today it ranks at number eight. And jobs and livelihoods have been lost as a result. We estimate that some 850,000 aviation-dependent jobs in the UK have either disappeared or are at risk.
The government’s attempts to re-start travel have not worked
- The constantly changing “travel corridors” make it impossible for people to plan and travel.
- And the reduction of quarantine from 14 days to 5 still makes it too difficult for most people’s schedules.
Quarantine must be completely removed for air travel to recover and jobs to survive. And that can be achieved with systematic COVID-19 testing integrated into the travel process.
Testing is effective: Detailed modelling done by OXERA and Edge Health looked at the risks. They concluded that test-and-release without quarantine found all but 0.01% of arrivals potentially infected with COVID-19.
Testing has public support: 65% of travelers we surveyed agreed that there should be no quarantine for people who test negative for COVID-19.
And, testing can be effective and affordable: Rapid antigen testing can deliver results in as little as 15 minutes. And they are a fraction of the cost of PCR tests which can be as high as GBP 150. For a family of four, that’s a GBP 600 cost before they even get to the airport.
We are so confident in testing that we are working with IAG to develop a holistic approach to managing testing results—the IATA Travel Pass. This will have accurate information on entry requirements and testing centers. And it will securely store verified test data linked to a traveler’s digital passport. As the data are only stored on the passenger’s phone, they will be able to share it with relevant authorities as easily as they use mobile boarding passes today.
My second point is to say congratulations on starting mass COVID-19 vaccinations in the UK. But I remind everyone that we cannot wait for vaccines to be the solution to reviving the industry.
Vaccines are good news. And IATA is helping air transport to perform the critical task of delivering them globally. This is the start of a months-long air lift. But the travel and tourism sector cannot wait that long. A job-saving testing solution could be implemented almost immediately. We see that with the many testing trials already underway—including for the critically important US-UK market.
The third point that I want to make is that the recovery process will be long.
Our economic forecasts do not see a recovery to 2019 traffic levels before 2024. That has two important implications.
- The first is that airlines will continue to need government support. A viable airline sector will be needed to lead the economic recovery. Each aviation job supports 29 others. So, the $173 billion in support that Governments globally have given the industry is a major investment in the recovery. It has also seen debt levels rise by 50% to a staggering $651 billion. With the potential to safely re-connect the word with testing, it’s time for governments to shift towards market stimulation measures.
- The second is that we will need continued flexibility on slot allocations until the demand for air travel stabilizes. In fact, the British government have an opportunity to take a leadership position here as they have now ‘taken back control’ of their slot policy from the EU.
That leads me off the topic of the pandemic to Brexit.
After four years of intense scrutiny, effort and debate, there is not much left to say. At a personal level, as a European, I feel a sadness that Britain has chosen to leave the EU project. As I speak, negotiations continue on a free-trade agreement which would give airlines the certainty we need to grow the connectivity between the UK and the rest of Europe. At a professional level, it is heartening to see that maintaining air connectivity is considered critical whatever the result of the trade negotiations. We must not forget that point.
No matter the frustrations with the EU, there is no doubt that the EU has been a positive force for aviation. And aviation is one of the EU’s greatest success stories. The liberalization of the European market has provided enormous opportunities for airlines new and old to bring air travel connectivity to millions who had never flown before.
If Brexit is the topic of the moment, environment is the challenge of the century. And the aviation industry’s commitment to sustainability is stronger than ever.
I am personally proud that one of my first tasks as IATA Director General was to see the CORSIA scheme agreed at the 2016 ICAO Assembly. Today, that agreement is a reality that will ensure that aviation meets its target of carbon neutral growth from 2020.
In another ground-breaking result of industry cooperation, through the Air Transport Action Group, we have mapped the way to cut our net emissions to half 2005 levels. And the recent IATA AGM agreed in a resolution to explore pathways to net zero.
We will reach our goals through a combination of CORSIA, electric and hydrogen propulsion, innovative air traffic management procedures and sustainable aviation fuels. I welcome the Prime Minister’s warm words about “jet zero”. These now need to be matched with concrete deeds to develop a commercial sustainable fuels industry.
Sustainable aviation fuels will be the biggest enabler to meeting our environment targets. The pandemic has demonstrated what a world without the freedom to fly is like. Environmental sustainability is our licence to ensure that this freedom is enjoyed by our generation and all to come.
After months in the virtual world of lockdown, I am sure that I am not alone in the desire to meet real people, share real experiences and travel to real destinations. We must never take aviation connectivity for granted. Reminding governments why a world connected by aviation is important has been my focus since joining IATA in 2016. When we fly economies prosper and people are better off. And that has never been clearer than in this pandemic.
In a few months, the responsibility to represent, lead and serve the global airline industry as Director General of IATA will fall to my successor Willie Walsh. As Willie has particular experience of the UK government, I am sure that you and the UK government will hear from him often and without ambiguity.
Representing “the business of freedom” is an honour. It is also a labor of passion for what flying can bring to people. My sincerest hope for 2021 is the return of the freedom to fly for us all.
Thank you very much.