Industry vs. Regulator - aviation heavyweights spar in Dublin

FILE PHOTO: IATA Director General Walsh attends interview with Reuters in Doha

By Joanna Plucinska

DUBLIN (Reuters) - Two of the leading figures in aviation sparred publicly about sustainability, airport disruption and how the war in Ukraine is impacting Europe's skies in a rare interview-turned-debate at an industry conference in Dublin on Monday.

Willie Walsh, outspoken head of the world's biggest airline trade body, IATA, joined the European Union's top permanent transport official Henrik Hololei on stage at the Airline Economics conference in the world's aviation finance capital.

In a heavily regulated sector, airlines and others typically save their lobbying for discreet, closed-doors meetings. But the two influential figureheads brought their frank views to the stage, arguing in front of hundreds of financiers.

Here were some of their main points:

ON UKRAINE

Hololei, who is originally from the Baltic nation of Estonia, once part of the Soviet Union, repeatedly pointed to the impact of Russia's full-scale invasion of Ukraine and the disruption caused by the closure of Russian airspace to many Western countries.

But Walsh wanted to know what could be done to lift that closure, which threatens to penalise some Western airlines at the expense of Chinese and other carriers that continue to fly over Russia.

Hololei was blunt: "Russia to lose the war, to start with. That would help for sure."

He added there would be no "business as usual" if Russian airspace did reopen.

"If one day we will have the opportunity to see the opening up of Russian airspace, one thing has to disappear: the Siberian overflight royalties, " he said, referring to fees collected from airlines by Moscow for routes that fly over Siberia.

ON AIRPORTS

Walsh held nothing back on one of his favourite targets - airports. Airlines accuse airports of overcharging carriers, while airports say they have to fund huge capital investments.

"Let's just talk briefly about airports, the bandits out there," he said. "Their performance in 2022 was appalling and yet the (European) Commission tends to be very, very soft on airports, hard on airlines."

Hololei defended the Commission's approach, but offered Walsh a rare public concession.

"(The airports) were also very much affected by COVID, but unlike a lot of the airlines, they got much more limited support from the state."

He added: "We haven't forgotten about the airports as well and we will continue to be tough on them."

ON SUSTAINABILITY

Hololei in turn pulled no punches when demanding that Walsh explain why aviation is now seen as an anti-environment bad boy to the average consumer.

"What did the sector do wrong in the past in order to end where it is today in terms of the public perception?" he asked.

Walsh conceded the industry hadn't managed its image well enough. "We allowed those who wanted to find the poster child for environmental damage to pick on aviation," he said.

ON SAF

The two did agree that all sides need to cooperate to ramp up the production of sustainable aviation fuel (SAF) to progressively replace kerosene and help make aviation greener more quickly.

"We shouldn't be standing back waiting for traditional oil producers to produce SAF," Walsh said.

Hololei agreed, adding: "Otherwise we will be failing very short of the targets have been set."

(Reporting by Joanna Plucinska Additional reporting by Tim Hepher; Editing by Mark Potter)