IATA: Managing Operations in a Changing World

Tony Tyler, IATA’s Director General and CEO, spoke at the IATA Ops Conference event in Copenhagen, Denmark today. In his remarks, he urged aviation stakeholders to take advantage of the numerous opportunities to communicate with policymakers on developments that are vital to enabling aviation to support economic growth and job creation in the areas of:

• Infrastructure
• Regulation and
• Emerging Safety Challenges

"There is no question that we are adept at talking to each other and making our views known on the technical ins and outs of things like Performance-Based Navigation, and Required Navigation Performance. We’ve been less successful in advocating with politicians who ultimately control the purse strings for essential infrastructure investments and structural changes," said Tyler.

Details of Mr Tyler's speech are below on the three topics:

Infrastructure

Let’s look at infrastructure first. By 2034, the number of air travelers will reach 7 billion annually. We can only accommodate this doubling of demand for connectivity if we have adequate infrastructure in place. Yet progress is lagging in many parts of the world.

We have found the technical answers to delivering greater efficiency and safety with big change programs like the Single European Sky (SES) and the Federal Aviation Administration’s (FAA) NextGen. But we have not been able to muster the political will or funding to achieve either in a meaningful timeframe.

The European Commission has understood the importance of SES to an industry that supports 12 million European jobs and contributes 4.1% to European GDP. But it seems to be taken for granted that this industry will somehow just deliver on these benefits, even if treated by governments with, at best, benign neglect. And at the state level, the narrow and misguided interests of controllers have prevailed over those of the hundreds of millions of European travelers and the broader economy.

This year we have launched a new approach with a study outlining the economic costs of failing to deliver much needed airspace modernization in Europe. And it’s a big number—some EUR 245 billion in 2035 alone. It’s our collective duty to make sure that number is top of mind with politicians, consumers, chambers of commerce and individual businesses. If this continent reaches 2035 missing that EUR 245 billion, it will be a quality of life issue for every European.

Modernizing European air traffic management represents the biggest challenge, but in the US, FAA’s NextGen program is a decade behind schedule and will cost two or three times more than the initial estimated $40 billion in public-private investment, according to a recent government study. The reality is, that as it is currently structured, FAA has been unable to keep NextGen on schedule, although much of the problem lies outside the agency’s control. It is subject to the vagaries and shifting priorities of the annual federal budget process.

Given the importance of the US market, a modernized and efficient US ATC system is critical to the future growth of global commercial aviation. It is for that reason that IATA and other stakeholders supported modernizing the system through the creation of an independent, corporatized non-profit entity to perform air traffic services.

Unfortunately, despite efforts by some far-sighted lawmakers, it appears most likely that this effort will not succeed this year. There are grounds for future optimism, however, based on the broad coalition of stakeholders who came together to support the initiative.

Regulation

Regulation is another area where our industry has an opportunity to help shape the discussion. Let me be clear that the industry does not oppose sensible, well thought-out regulation, developed with participation from all stakeholders. Indeed, regulation, advanced in partnership with industry, and based on global standards developed through the International Civil Aviation Organization (ICAO) process, is a cornerstone of our success in making aviation so safe. But over the past few years we have seen states introduce new requirements that are not based on a data-driven, risk-based approach and that create little or no added value.

This is particularly a problem in matters involving an airline’s Aircraft Operator Certificate (AOC) and Ops Specs, in which regulators in one state issue new requirements affecting operators from another. The result is an increasingly bureaucratic and lengthy process when airlines apply for new routes, additional overflights or simply a reissuance of their Foreign AOC. Recognizing the challenges this is posing, in 2013 ICAO, with industry support, launched the AOC Registry. This initiative has drawn participation from over 100 states. Unfortunately, two key bodies have yet to join: the European Aviation Safety Agency and FAA. Taking advantage of this gathering, I will do some proactive communication in making it clear that we would welcome their participation to enable the Registry to achieve its promise.

A related concern is the rising number of states introducing operational audits. One of the intents of IOSA was to cut down on the number of redundant and overlapping audits, while creating a single globally-accepted operational safety standard.

To achieve that, IOSA was built in cooperation with safety regulators and they participate in our advisory panels. In doing so we can all be confident that IOSA faithfully reflects ICAO standards reinforced by global best practices.

So it is truly unfortunate that a growing number of States are introducing their own audit programs that are not necessarily harmonized with global standards and recommended practices. The technical answer is clear—global standards are the way to go. And I would not question the motivation of any regulator with respect to safety. So the solution rests with industry making a convincing argument.

Lest we all get too depressed, I should also recognize some successes. The Abuja Declaration was a political success in Africa. Working as a united industry we captured the attention of the continent’s governments and they committed to achieving world-class safety using a number of means—including IOSA.

The accident rate in sub-Saharan Africa has improved significantly. In 2010 the continent’s jet hull loss rate was 8.7 per million flights. But the average for the 2010-2014 period was 3.69. And this is particularly true for sub-Saharan carriers on the IOSA registry whose jet hull loss rate over the period was 0.62. The problems of safety in Africa have not been solved. Working in partnership we need to help the continent’s governments improve oversight, adopt IOSA and upgrade infrastructure. The technical to-do list is very clear. And we need to continuously remind states of their Abuja commitments. And similarly, it is equally important that our friends in Europe recognize improvements and so refine the list of banned carriers.

Another piece of good news for recognition of global standards is that today IATA and TRAFI, the Finnish Transport Safety Agency, will sign a memorandum of understanding to use IOSA as a tool to complement their oversight of the Finnish operators. This will reduce redundant audits while maintaining adherence to the global standards and recommended practices that are the basis of IOSA. Finland will become the first—but I hope not the only—EU member to take advantage of the ability to use IOSA to improve the efficiency of their safety oversight process.

And one last positive note is a victory in preventing commercial re-regulation of the industry disguised as a safety initiative. Recently, the US Senate rejected a proposal for the FAA to regulate seat size attached to the agency’s Reauthorization Act. But we can only take limited comfort in the result. For everyone in this room, safety is the top priority. That commitment extends to the entire industry. So we must be vigilant in ensuring that safety measures are guided by structured risk assessments—not political agendas that would reverse the nearly four decades of mounting benefits from commercial deregulation.

Emerging Safety Challenges

That is not to say that safety regulation should remain static. Along with learning more about safety with each and every flight, we also have emerging challenges to deal with.

One example that is regularly in the news is drones, or as ICAO refers to them, Remotely Piloted Aircraft Systems. Speaking as someone who has spent his entire adult life in aviation, it’s great to see the joy of flying reach a new audience. We are only beginning to discover the many potential commercial applications of this technology. And it would be naïve to think that States and military forces will reduce their use of drones. They are here to stay. But we must not allow them to become a drag on the efficiency of the airways or a safety threat to commercial aviation.

Of course, the great majority of drone operators pose no risk. But we do need a sensible approach to regulation and a pragmatic method of firm enforcement for those who disregard rules and regulations and put others in danger. We are joining with other stakeholders to ensure our views are understood. IATA welcomes FAA’s activity in this regard and is supporting the “Know Before You Fly” campaign in the US to educate prospective users about the safe and responsible operation of drones. We would like to see similar campaigns undertaken elsewhere. And we are working closely with ICAO as well as stakeholders representing airports, ANSPs and pilots, to agree a common approach.

Another example is the carriage of lithium batteries. The industry has worked long and hard to ensure that lithium batteries can be carried safely. The vast majority of shipments are in full compliance with appropriate aviation regulations including the dangerous goods regulations (DGR) and IATA Lithium Battery Shipping Guidelines. But with 400 million lithium batteries being produced each week, ICAO has acknowledged the risks of improperly manufactured batteries and placed a temporary ban on lithium battery shipments in the bellies of passenger aircraft.

Let’s be clear that banning lithium batteries from air freight does not solve the issue of counterfeit or non-declared goods and it is important that we convey that message to policy makers. We need to speak with one voice to urge governments to redouble their efforts to enforce the regulations and close the loopholes that prevent prosecutions of serial offenders.

Conclusion

“Aviate, Navigate, Communicate” is an old pilot saying. At the industry level, we have done a superb job on the first two. Managing operations in a changing world will also require us to communicate most effectively about the priorities that will enable aviation to meet future demand even more safely, securely and sustainably. I wish you a successful conference.