An Interview with IATA’s Director General

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As the seventh person to lead the International Air Transport Association (IATA), Alexandre de Juniac had a tough act to follow in succeeding the passionate and outspoken Tony Tyler as Director General and CEO.

Mr. de Juniac brought his own lengthy set of credentials to the role: almost three decades of experience in the private and public sectors in senior positions in the airline and aerospace industries and the French government. He served as Chairman and CEO of Air France-KLM (2013-2016) and Air France (2011-2013). He also served on the IATA Board of Governors since 2013 and spent 14 years at French aerospace, space, defence, security and transportation company Thales and its predecessor companies. He also held positions in the French government at the Conseil d’Etat, the department of Budget and in the Ministry of Economy, Industry and Employment as Chief of Staff to then-Minister Christine Lagarde.

ICAO Journal Editor Rick Adams interviewed Mr. de Juniac after he took on his new role at IATA, as part of a series of interviews with world aviation leaders.

 

What challenges have you found in your IATA role thus far, and what experiences in your background do you think prepared you for this position?

Over my career I have seen the industry from various perspectives. While at Thales the focus was on infrastructure and aircraft equipment manufacturing. When in government I viewed the industry from the perspective of public policy and economic issues. And then five years at Air France and Air France-KLM gave me a good grounding in how airlines operate and the challenges that they face. I also served on the IATA Board of Governors, so I was involved in industry issues. The job of leading IATA is truly unique. You see the whole industry from 40,000 feet – 265 airlines and the collective challenges that they face.

From that perspective, the importance of global standards really comes into focus. IATA’s job is to work with stakeholders to make it easier for airlines to provide the connectivity that the world needs. When we are working with our members to position the industry for future success, the focus is squarely on global standards – getting governments to adopt or conform to global standards. You know these things inherently when you work in the industry. But you get a very clear view of this at IATA – and at ICAO as well.

In taking on the leadership of IATA, you can expect some continuity and some change. My predecessor, Tony Tyler, saw the industry as a force for good in the world. I fully agree, but I have a different way of expressing the point. For me, we are in the business of freedom. Aviation makes our world a much better place. It gives people the means to better their lives. So I plan to strongly argue against proposals that would restrict the freedom to travel or to trade. It’s a worrying trend for air transport and, more broadly, for the world which grows stronger and more prosperous when we interact with others across borders.

I must also confess that I am not very patient. The pace of change in our world is accelerating. That’s a challenge for many governments – which move more slowly. And it’s a challenge for air transport. In 2016 we were driving a change to common XML electronic communication standards for cargo handling. It is something that most others did a decade ago!

Our strong track record on safety is, of course, not the result of winning a race. We can never lose our focus on what it takes to provide ever-safer air transport and take whatever time is needed to do so. But on pretty much everything else I think that we need to accelerate.

Now that the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) was adopted at the ICAO Assembly, what are the next steps for IATA’s airline members with regard to monitoring, offsetting, and continuing to reduce carbon emissions? And what role might IATA play in convincing reluctant States to participate in the voluntary phase?

The new global market-based measure, CORSIA, is not the only solution to aviation and the environment that we are pursuing. It is a part of a solution or package of measures that also involves improvements in technology, modern infrastructure and more efficient operations. Together with CORSIA, these are the elements of our four-pillar strategy to combat climate change.

Over the next few years we will continue to work with ICAO on the technical side of CORSIA. This includes important things like the definition of carbon units and the kinds of credits that can be applied to CORSIA. We will also closely monitor the discussion among governments on how the system can fairly accommodate the special circumstances of fast-growing airlines or those that have already made significant investments to mitigate their climate change impact.

IATA will also be working with our member airlines to build the needed capacity for monitoring, reporting and verification. They have a bit of a head-start because airlines already report much of the needed data to IATA. And, while many of our members have experience in the carbon markets, the industry’s level of understanding is not uniform.

So there will be some capacity building in this area as well. As an industry, we want the broadest participation possible by governments in the voluntary phase. There is an impressive mix of developed and developing nations among them. When you have nations as diverse as the US, China, Zambia and the Marshall Islands agreeing to participate, you know that you are on solid ground. It is a pretty strong argument to encourage the participation of others – which I plan to do tirelessly.

Security continues to be a concern – inconsistent application of airport security procedures around the world, cybersecurity concerns, terrorism at airports such as Brussels, unruly passengers. What solutions would IATA like to see emphasized in the new ICAO Global Aviation Security Plan in development?

The issue of security is hovering over our industry. Terrorists are targeting aviation. That was clear from the terrible attacks at airports last year. And travel is impacted, even when aviation is not the specific target. But let’s also remember that terrorism has very few boundaries. We have seen attacks in community centres, shopping malls, office buildings, supermarkets, night clubs, public streets, bars, stadiums and so on. The threat of terrorism must be addressed as part of national security strategies under the leadership of governments supported by their national intelligence, policing and military capabilities. The new UN Resolution 2309 on aviation security signed in September is reinforcing that point.

It is also clear that keeping aviation secure needs the combined efforts of industry and government. We welcome ICAO’s commitment to lead the development of the ICAO Global Aviation Security Plan (GASeP) and IATA is committed to be a part of the process by contributing the industry perspective.

I would not want to pre-judge the GASeP development process by making very specific demands when we are at the beginning of the journey involving many partners with unique and legitimate perspectives on our common goal – keeping flying secure. But I hope that the GASeP can be an effective guide for governments to implement clear, simple, nimble, sustainable and smart regulation to manage and mitigate security threats. Security is a global challenge that must be met with the effective implementation of global standards. But it must avoid hard-wired prescriptions that are sure to be obsolete before the ink is dry if not constantly adjusted to the threat environment and appreciative to the security improvements already in place. This is the equivalent of a “performance-based” approach that will allow industry players and governments alike to effectively align and adjust their actions to achieve effective results rather than tick boxes.

How can we deliver that? Conceptually, I would like to see the principles of a risk-based approach at the core of GASeP. And the plan should be sufficiently flexible to effectively mitigate threats that emerge and evolve very quickly, minimize the impact of any successful attack and develop greater resilience capabilities. The GASeP also needs to enable greater speed than we currently are able to deliver. And I hope that there will be a great deal of emphasis on capacity building so that governments can have confidence in the security systems of their partners – in normal operations and in their ability to scale-up (or down) as threat levels change. Alongside that, it is also critical that information sharing is more effective than it is today – among governments and with industry. We must address what information is exchanged and the exchange mechanism or process.

Aircraft tracking has slipped off the front page for the moment, but there has been progress. How are some of IATA’s members implementing 15-minute and one-minute tracking systems?
Many airlines already track their aircraft through a variety of methods. The ICAO Council has adopted a normal aircraft tracking standard, making all operators responsible for tracking their aircraft throughout their area of operations. It has established a tracking time interval of 15 minutes required in oceanic airspace and recommended elsewhere. The Standard and associated SARPs will be applicable from November 2018. In a few years, new systems and technology, if adopted universally by air navigation service providers, will allow for global surveillance coverage. The adopted Standard takes this into account. I would say that it is happening as fast as could be hoped for in view of the challenges involved in developing a global Standard that will be acceptable to all the members of ICAO.

 

 

How are the world’s airlines faring currently? In what regions is there strength, and where are members still struggling?

We are headed for a record year in terms of industry profits. With airlines expected to show a combined global industry profit of nearly $40 billion this year, we are in record territory. And for only the second year in a row and the second in the history of aviation, the industry’s return on invested capital (9.8%) is exceeding the cost of capital (6.8%). On a net profit basis, we are looking at a 5% return. Mind you, we have to keep this in perspective: what is a record performance for the airline sector is the bare minimum of what is expected in other industries.

Airlines are in very different circumstances depending on where they are located. For example, about half of the industry’s profits are being generated in North America. Our colleagues in Europe have seen improvements, but they still suffer under the burdens of high taxes, inefficient and inadequate infrastructure and onerous regulation. Brazil is in crisis. The Asian carriers are the biggest players in cargo – so even if passenger demand is growing strongly, an important part of their business is suffering. Even the carriers in the Middle East have moderated their growth, reflecting the impact that lower oil is having on their region, as well as the weaker economies.  I am an optimist by nature – business people always see the next opportunity. There is still tremendous growth potential out there. But it is also a time for some prudent caution given the slowdown in world trade, weak economies and significant political risk.

What is your view on progress toward the next-generation ATM system, i.e. ADS-B, PBN, Next Gen, SESAR, etc.? Where is greater emphasis needed?

When I look at the growth projections for air traffic – a doubling in passenger demand by 2035 — I get concerned that we may be heading for an infrastructure crisis. In Europe, the Single European Sky initiative is failing because of a lack of will at the state level. Billions of euros are being spent on new technology, but without political pressure to reform, the inefficiency will not improve. In 2016 we did a study showing that the foregone benefits to the European economy resulting from this failure could exceed 245 billion euros in 2035.

In the United States, the NextGen air traffic management modernization is being delayed by a politicized budgeting process and special interests. This is preventing much-needed improvements agreed to by nearly all airlines and air traffic controllers. There are also challenges in the fast-growing regions as well, including the Gulf and China.

Of course, we also face huge challenges in terms of airport infrastructure. We have bottlenecks in many major markets such as New York, London, Bangkok and Mumbai. In 2016, the UK addressed their need for a third runway at Heathrow airport, and that is a positive development, but the cost of building it must be kept at a competitive level and its usefulness must not be crippled from the start by draconian operational restrictions.

 

A French citizen, Alexandre de Juniac is a graduate of both the Ecole Polytechnique de Paris and Ecole Nationale de l’Administration.  He took office at IATA on 1 September 2016, working  from both the association’s main offices in Montreal, Canada and Geneva, Switzerland. You can read some of Alexandre de Juniac’s thoughts on issues affecting the aviation industry here on his IATA blog.

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