Catastrophes and crowded skies set Iata’s airlines thinking

Even without missiles being test-fired into the sky by a hostile regime 35 miles to the north, airline executives might be a little tense next weekend. More than 1,000 of them will gather in the South Korean capital, Seoul, for the big event in the industry’s calendar, the International Air Transport Association’s general meeting.

Many Iata members have a degree of protection from turbulence thanks to deep pockets, airline alliances, sheer size, or national loyalty. But the big issues to be discussed in Seoul may still keep some jet-lagged executives awake at night.

The bottom line

Globally, the industry is still turning a profit. It is on course for a 10th straight year of positive returns, after racking up losses in the financial crisis. Jet fuel is still far cheaper than the $120-plus per barrel airlines had to pay until 2013 but, bar a sharp plunge in late 2018, the price is heading upwards. European carriers in particular are looking shaky, with a combined loss in early 2019 ten times worse than last year’s first quarter – although the collapse of smaller airlines may allow survivors to increase fares. Behind the low yield from passengers is another statistic that might spook the industry: a tailing-off in demand for air freight. If the Trump trade war escalates, storm clouds could appear.

Aircraft safety

More than once this decade, Iata has proudly reported the safest year on record for aviation. Drilling down into the statistics to separate out old turboprops from international commercial flights, the organisation has spoken of “zero western-built passenger jet hull losses”. These modern planes, conventional wisdom had it, did not fall out of the skies. Now the two Boeing 737 Max crashes, with 346 fatalities, have shaken that complacency. The repercussions for an industry that has ordered hundreds more 737 Max aircraft, expecting to retire its older planes and fly further and cheaper, are not clear. Some fear passengers will refuse to fly on 737 Max planes if and when regulatory approval is restored, with a breakdown in trust in the whole process of certification.

Infrastructure

Back in the days when Britain was a key part of Europe, even international airlines were clamouring for access to Heathrow: tearing down the opposition to a third runway became a key objective. With that one in the bag, the discussion has largely moved on from airports – although Mexico’s decision to scrap plans for a new international hub at the capital has provoked some airline consternation. The new “infrastructure” issue is airspace: airlines see the highways in the skies, in Europe in particular, getting clogged, and the traffic lights malfunctioning due to a lack of staff and strike-happy controllers. Plans for an efficient, pan-European traffic control system, which could both straighten flight paths to save fuel and dampen the impact of local industrial action, have stagnated.

Environment

As growing protests declare a climate emergency, and other sectors clean up their act, transport looks ever more the problem. And within the sector, aviation has yet to identify even the potential solutions that land-based transport can envisage. “Only a highly [greenhouse gas] emitting volatile fuel has the weight-to-power density that allows you to fly,” says aviation consultant Andrew Charlton. Airlines have clung to a “sustainable roadmap” that looks an ever weaker response to the climate emergency, largely reliant on carbon offsetting. The main plank of that, the Corsia scheme agreed in 2018 via the UN, whereby international airlines will voluntarily report and offset emissions above current levels, has started but not been secured. And, says Charlton, “what seemed like a clever idea is now … looking a pretty relaxed timetable. The airlines think it’s a fantastic win, so you can guess from that it’s not very demanding.” A technological breakthrough will be sorely needed for aviation to continue as is. But schemes to produce clean fuels or electric planes for the mass market are, at best, in their infancy.

Gender and diversity

An eyecatching conference highlight is the presentation of Iata’s diversity and inclusion awards – sponsored by Qatar Airways. Rather than a satirical attempt to rival Henry Kissinger’s Nobel peace prize, insiders stress that this is a serious attempt at redemption after Qatar’s colourful chief executive, Akbar al-Baker, last year stole conference headlines by insisting that only a man could do his job. Only two women, including Flybe’s Christine Ourmières-Widener, sit on the Iata governing board of 31 – but even that figure is better than the ratio of female chief executives, or even pilots, at major airlines.