Airlines 2020-02

2020 – 02

airlines.iata.org

AIRLINES.

READY FOR TAKE-OFF Aviation’s restart will use evidence-based processes to ensure passenger and staff safety

2020 – 02

Digest How has COVID-19 affected the industry | CEO Interviews IATA, Airports Council International, Eurocontrol | Cargo The value of air cargo | Weather Effects on meteorology as airlines were grounded

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09/07/2020 09:40

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Airlines.

Contents 2020 – 02

Comment

30 Value is in the system

5 Alexandre de Juniac, Director General

The aviation industry is resilient enough to get through the coronavirus pandemic

Eamonn Brennan, DG of Eurocontrol, says cooperation across aviation sectors is key to restarting the industry

Digest

Features

8 IATA and industry update

20 INDUSTRY RESTART: A multi-layered approach

COVID-19: A long road ahead, First signs of recovery, Passenger and crew safety paramount, Financial relief needed for recovery, Testing for air travel

The aviation industry cannot simply pick itself up from where it left off. A coordinated set of health and safety measures will help the sector take off

14 Data: In numbers

3

Impact of COVID-19 on aviation

28 Overcoming every obstacle

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CEO Interviews 16 A very different industry

IATA Director General and CEO Alexandre de Juniac talks about the effects of the pandemic on the industry

33 COVID-19 hits weather data

Weather forecasters are facing an unexpected and worrying downside of COVID-19’s impact on flying

24 Time to grow up

Angela Gittens, DG of Airports Council International, on the aviation community entering a new phase of life

IATA Corporate Communications Vice President Anthony Concil Creative Direction Richard McCausland Assistant Director Chris Goater www.iata.org Editorial Editor Graham Newton Head of content production DeeDee Doke Assistant editor Patrick Appleton Senior designer Gary Hill Picture editor Claire Echavarry Production Production manager Jane Easterman +44 (0)20 7880 6248 jane.easterman@redactive.co.uk Publishing director Aaron Nicholls

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The value of air cargo to the world has never been more apparent, but there are many challenges ahead

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2020 – 02 Airlines

09/07/2020 09:41

Aviation Is a Key to Global Economic Recovery Fly to a “New Normal�

TAMURA Akihiko President & CEO Narita International Airport Corporation

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We congratulate IATA on its 75th anniversary.

Resurgence of the aviation industry is vital for the recovery of the world economy.

Narita International Airport, Tokyo, is resolved to join hands with our airline partners and stakeholders more strongly than ever before to overcome this challenge.

We will restore and further expand the global air network together.

30/06/2020 10/06/2020 09:39 13:48

Comment: Director General and CEO, IATA

Propelling aviation forward The impact of COVID-19 has had a devastating effect on aviation worldwide but the industry is resilient to get through the crisis and come out #readytofly

ILLUSTRATION: SAM KERR

A

world without aviation is a bleak place. We are at the height of the summer season when people should be reuniting with friends and family; or exploring the world on a well-deserved holiday.

But, in the midst of the COVID-19 crisis, airports are largely empty and what planes are flying do so half full. The impact of not flying goes beyond human connections and foregone vacations. Millions of jobs have gone away—at least temporarily— and the consequences for our society and the economy are huge.

Governments need to help protect their citizens from the virus. And they need to try to mitigate the impact of the economic hardship it is causing. We know that re-starting aviation can help them achieve their economic goals. But they need to have confidence that opening their borders can be managed without leading to further contagion.

Today’s situation is exceptional even for an industry that is familiar with crises. While there is very little clarity of the future, four things should give aviation’s leaders cause for optimism.

First, many governments understand the important role that aviation will play in the eventual recovery; and they are providing relief to help keep it viable.

Second, governments are also working together to support the restart. The ICAO Take-off Guidance for re-starting aviation was put together in record time with great support from all corners of the industry and from governments. And with its progressive implementation by an industry that has always put safety above all else, we are creating a safe flying experience.

Third, more governments are lifting border restrictions. The removal of Europe’s internal borders is a sign of hope. The next step is re-opening the external borders. This is being done more cautiously; but each step moves us in the right direction and helps airlines.iata.org

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give others the confidence to do the same—without adding quarantine measures that keep travel and tourism in lockdown.

Fourth, medicine is rapidly advancing. Even if we don’t have a guarantee of a vaccine, indications are that fast, accurate, and large-scale testing could soon be a reality. And that has the potential to be a game changer for opening up aviation even in countries that are perceived to be high-risk.

Of course, optimism about the future does not take away the pain that we are experiencing today. The first six months of this crisis have taken their toll. Industry losses are heading towards $84 billion this year. Jobs are disappearing, as are some airlines.

We must rely on our resilience and ingenuity in a crisis. It’s why we were able to keep cargo moving when the passenger business collapsed. It’s what enabled thousands of repatriation flights. It’s why our people are able to instantly adapt to whole new ways of working, to keep our industry safe, to keep smiling.

And it motivates us to work with governments and our industry partners to implement the global standards needed for this new—and hopefully temporary—age of travel.

We still have a long way to go on this journey. But we should have every confidence that we will get through to the other side, undeterred in our mission to connect the world. And when we do that, a great realization from this crisis—that there is no wholly satisfying substitute for being there—will propel aviation forward.

Flying is freedom, and travel is freedom. #Readytofly

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Alexandre de Juniac: Director General and CEO, IATA 2020 – 02 Airlines

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Air cargo was on the frontline in the fight against COVID-19, delivering vital equipment and medicines to those that needed it most. As the world transitions to a new normal, capacity has become the critical issue due largely to the loss of bellyhold cargo. Governments must ensure that vital supply lines remain open and efficient by facilitating the flexibility airlines need to meet demand.

The Big Picture

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2020 – 02 Airlines

09/07/2020 09:41

Digest A long road ahead Airlines are expected to lose $84.3 billion in 2020, according to IATA. Total revenues will fall 50% to $419 billion. In 2021, losses will reduce to $15.8 billion as revenues rise to $598 billion.

“Financially, 2020 will go down as the worst year in the history of aviation,” said Alexandre de Juniac, IATA’s Director General and CEO. “On average, every day of this year will add $230 million to industry losses. It means that—based on an estimate of 2.2 billion passengers for 2020—airlines will lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash.”

The main driver of the losses is the

Cargo volumes will drop 10.3 million tonnes to 51 million tonnes. However, a severe shortage in cargo capacity due to the unavailability of belly cargo on (grounded) passenger aircraft is expected to push rates up some 30% for the year. This means cargo revenues will reach $110.8 billion in 2020 and contribute around 26% to industry revenues—up from 12% in 2019.

With open borders and rising demand in 2021, the industry is expected to cut its losses to $15.8 billion. Total passenger numbers are expected to rebound to 3.38 billion and overall revenues should reach $598 billion, still 29% below 2019’s $838 billion.

IMAGES: GETTY/ISTOCK/SHUTTERSTOCK

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evaporation of passenger demand as international borders closed, and countries locked down. In April, global air travel was roughly 95% below 2019 levels.

Unfortunately, costs are not falling as fast as demand. Though expenses of $517 billion are 34.9% below 2019 levels, revenues will see a 50% drop. Non-fuel unit costs will rise 14.1%, as fixed costs are spread over fewer passengers. Lower utilization of aircraft and seats because of restrictions will also add to rising costs.

Fuel prices offer some relief. In 2019, jet fuel averaged $77/barrel whereas the forecast average for 2020 is $36.8. Fuel is expected to account for 15% of overall costs (compared with 23.7% in 2019).

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airlines.iata.org

09/07/2020 09:42

Digest

“A tough future is ahead of us. Containing COVID-19 and surviving the financial shock is just the first hurdle” Alexandre de Juniac, IATA’s Director General and CEO

After disastrous April, first signs of recovery for aviation After plunging 94.3% in April 2020 compared with April 2019, demand for air travel is now on the rise.

Recent IATA figures show that daily flight totals rose 30% between the low point on April 21 and May 27. Though this rise is primarily in domestic operations and off a low base (5.7% of 2019 demand), it does suggest that the industry has seen the bottom of the crisis, provided there is no recurrence of the pandemic.

“April was a disaster for aviation as air travel almost entirely stopped. But April may also represent the nadir of the crisis. Flight numbers are increasing. Countries are beginning to lift

mobility restrictions. And business confidence is showing improvement in key markets, such as China, Germany, and the United States.

These are positive signs as we start to rebuild the industry from a stand-still. The initial green shoots will take time—possibly years—to mature,” said Alexandre de Juniac, IATA’s Director General and CEO. IATA calculated that by the first week of April, governments in 75% of the markets tracked by IATA completely banned entry, while an additional 19% had limited travel restrictions or compulsory quarantine requirements for international arrivals.

FIVE POINTS TO RESTART INDUSTRY IATA announced a commitment by the airline CEOs on its Board of Governors to five principles for re-connecting the world by air transport.

These principles are:

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1 Aviation will always put safety and security first.

2 Global debt: Governments around the world are providing aid to keep the aviation industry afloat

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AIRLINE DEBT THREATENS RECOVERY An IATA analysis revealed that the airline industry’s global debt could rise by almost $120 billion to $550 billion by year-end. $67 billion of the new debt is composed of government loans ($50 billion), deferred taxes ($5 billion), and loan guarantees ($12 billion). $52 billion is from commercial sources including commercial loans ($23 billion), capital market debt ($18 billion), debt from new operating leases ($5 billion), and accessing existing credit facilities ($6 billion).

“Government aid is helping to keep the industry afloat. The next challenge will be preventing airlines from sinking under the burden of debt that the aid is creating,” said

Alexandre de Juniac, IATA’s Director General and CEO. In total, governments have committed to $123 billion in financial aid to airlines. Of this, $67 billion will need to be repaid. The balance largely consists of wage subsidies ($34.8 billion), equity financing ($11.5 billion), and tax relief/subsidies ($9.7 billion).

“Over half the relief provided by governments creates new liabilities,” said de Juniac. “Less than 10% will add to airline equity. It changes the financial picture of the industry completely. Paying off the debt owed to governments and private lenders will mean that the crisis will last a lot longer than the time it takes for passenger demand to recover.”

Aviation will respond flexibly as the crisis and science evolve.

3 Aviation will be a key driver of the economic recovery.

4 Aviation will meet its environment targets.

5 Aviation will operate to global standards that are harmonized and mutually recognized by governments.

2020 – 02 Airlines

09/07/2020 09:42

QUARANTINE PROPOSALS RISK RECOVERY

83%

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IATA believes quarantine measures on arrival would further damage confidence in air travel.

IATA’s June survey of recent air travelers showed that: 83% of travelers will not travel if there is a chance of being quarantined on arrival.

“Even in the best of circumstances this crisis will cost many jobs and rob the economy of years of aviation-stimulated growth,” said Alexandre de Juniac, IATA’s Director General and CEO. “To protect aviation’s ability to be a catalyst for the economic recovery, we must not make that prognosis worse by making travel impracticable with quarantine measures.”

IATA’s proposal for a temporary risk-based layered approach to provide governments with the confidence to open their border without quarantining arrivals includes preventing travel by

of travelers will not travel if there is a chance of being quarantined on arrival those who are symptomatic with temperature screening among other measures.

It also advises addressing the risks of asymptomatic travelers with governments managing a robust system of health

declarations and vigorous contact tracing.

The mutual recognition of agreed measures is critical for the resumption of international travel. This is a key deliverable of the COVID-19 Aviation Recovery Task Force (CART) of the International Civil Aviation Organization (ICAO).

“The universal implementation of global standards has made aviation safe. A similar approach is critical in this crisis so that we can safely restore air connectivity as borders and economies re-open. ICAO's Takeoff guidance document was built with the best expertise of government and industry.

Airlines strongly support it.

Now we are counting on governments to implement the recommendations quickly, and we must do this with global harmonization and mutual recognition of efforts to earn the confidence of travelers and air transport workers,” said Alexandre de Juniac, IATA’s Director General and CEO.

PASSENGER AND CREW SAFETY PARAMOUNT IATA supports the onboard wearing of face masks for passengers and crew but does not agree with mandating social distancing measures that would leave middle seats empty.

Mask-wearing by passengers and crew will reduce the already low risk, and avoid the dramatic cost increases to air travel that onboard social distancing measures would bring.

“The safety of passengers and crew is paramount,” said Alexandre de Juniac, IATA’s Director General and CEO. “We must arrive at a solution that gives passengers the confidence to fly and keeps the cost of flying affordable. One without the other will have no lasting benefit.”

In addition to face coverings, IATA recommends

Airlines 2020 – 02

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layers of temporary biosecurity measures to include: Temperature screening of passengers, airport workers, and travelers Boarding and deplaning processes that reduce contact with other passengers or crew Limiting movement within the cabin during flight More frequent and deeper cabin cleaning Simplified catering procedures that lower crew movement and interaction with passengers.

The long-term solutions for COVID-19 depend on medical science. “We need a vaccine, an immunity passport or an effective COVID-19 test that can be administered at scale,” de Juniac continued. “Work on all of these is promising. But none will be realized before we will need to restart the industry.”

45%

Digest

45% anticipate a return to travel within one to two months of containment of the COVID-19 pandemic but 36% indicate that they could wait six months or more airlines.iata.org

09/07/2020 09:42

Digest

A BEAUTIFUL SPRING AWAITS...

In some places, China Express is the only airline service. So, if we stopped operations, local air transportation will be totally disrupted.

Who’s going to transport any medical care personnel and supplies to the destination in a rapid fashion? The local people need

us, and we proved our unique value during the virus outbreak.

I strongly believe that the tourism demand suppressed by the epidemic will be released, especially domestically. The airlines which survived the cold winter will enjoy a beautiful spring. Longjiang Wu, CEO, China Express Airlines

Financial relief needed for a balanced recovery Airports Council International (ACI) World and IATA have called on governments to grant financial relief to airport operators and airlines and so support the essential connectivity the industry will provide for economic recovery.

“The financial impact of the current crisis is unlike anything we have ever seen and requires urgent action by governments to assist the aviation industry to protect jobs, ensure essential operations, and plan for recovery,” said ACI World Director General Angela Gittens. “Preserving the continuity

Financial relief: Aviation will help lead the global economic recovery once the pandemic is finally over

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of operations for airports and airlines and protecting aviation jobs today will result in a faster economic recovery tomorrow.”

IATA’s DG and CEO Alexandre de Juniac said the situation could not be more dire.

“Governments will depend on aviation to be ready to lead an economic recovery when this pandemic is behind us,” he said. “Governments must act now with financial lifelines that only they can provide for airlines and airports to see them through these extraordinary times.

Airlines and airports are in this together.”

Slow recovery: Confidence-boosting measures will be needed from governments to bring back passengers

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IATA EXPECTS SLOW RECOVERY An anticipated slow recovery in demand for air travel means confidenceboosting measures are needed, according to IATA. “Passenger confidence will suffer a double whammy even after the pandemic is contained—hit by personal economic concerns in the face of a looming recession on top of lingering concerns about the safety of travel.

Governments and industry must be quick and coordinated with confidenceboosting measures,” said Alexandre de Juniac, IATA’s Director General and CEO. An IATA-commissioned survey of recent travelers found that: 45% anticipate a return to travel within one to two months of containment of the COVID-19 pandemic but 36% indicate that they could wait six months or more 64% indicated that they could delay a return to travel until their personal financial situation stabilizes.

“As countries lift restrictions, confidence-boosting measures will be critical to re-start travel and stimulate economies,” said de Juniac.

2020 – 02 Airlines

09/07/2020 09:43

Digest

CONVINCING CUSTOMERS The challenge is to convince customers that it is safe to travel.

When terrorism struck… the industry and governments worked together to build reassurance back into the system and flying grew faster than ever. I am confident we will work through this setback as well. The fact that people love to travel is also critical to economic growth. Ronojoy Dutta, CEO and Whole Time Director, IndiGo

AIRLINES TO LOSE MORE THAN $400BN

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IATA estimated that the COVID-19 crisis could see airline total revenues drop $419 billion in 2020, a 50% decline compared with 2019.

“The industry’s outlook grows darker by the day,” said Alexandre de Juniac, IATA’s Director General and CEO. “The scale of the crisis makes a sharp V-shaped recovery unlikely.”

IATA proposes a number of relief options for governments to consider, including: Direct financial support to passenger and cargo carriers to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of COVID-19 Loans, loan guarantees, and support for the corporate bond market by governments or central banks.

Tax relief in the form of rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other government-imposed levies.

COVID-19 testing for air travel IATA has called on governments intending to introduce COVID-19 testing for travelers to deliver test results quickly, accurately, and to scale.

Ideally, COVID-19 testing would be required in advance of the arrival at the airport and within 24 hours of travel.

Passengers arriving ‘ready-to-fly’ reduces the risk of contagion in the airport and enables early re-accommodation for any traveler who tests positive.

If testing is required as part of the travel process, it is recommended at departure.

Should a passenger test positive, airlines have been offering re-booking or refunds in line with their commercial policy.

If testing is mandated on arrival and a passenger tests positive, then the

Testing travelers: Passenger tests need to be processed quickly

passenger should be treated according to the requirements of the receiving state.

Airlines should not be required to repatriate the passenger(s) or be punished in any way.

AIR CARGO VITAL IN FIGHT AGAINST COVID-19

Losses: IATA estimated the COVID-19 crisis could see airlines lose more than $400 billion in 2020

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Air cargo carriers, freight forwarders, truckers, and all involved in the logistics supply chain are working to ensure essential equipment and supplies reach their destination.

“Air cargo is on the front line, not only fighting COVID-19 but ensuing that global supply chains are maintained for the most time-sensitive materials including food and other products purchased online in support of quarantine and social distancing policies implemented by states.

But we can only continue to do this if we work together with the

support of governments.

Keeping supply lines open also supports jobs in local economies for example producers of perishables in Africa and Latin America. We are stronger together,” said Glyn Hughes, IATA Global Head of Air Cargo.

airlines.iata.org

09/07/2020 09:43

Advertising Feature: Hexaware

Post-COVID-19 technologies As the airline industry works towards a new normal, Hexaware considers the technologies that can overcome the challenges ahead

The global pandemic has created a horizon of uncertainty for the aviation industry. Air transport has to re-invent, re-imagine, and accelerate technological innovation to drive continued recovery and unlock future value for sustainable growth.

The new processes that are necessary to make safety primary and paramount for staff and passengers come with costs and complexity. Technology has to become the armor to plan for future all-weather scenarios; the critical pivot for air travel to become economically viable and efficient.

But what technologies will come to the fore as we head towards the new normal?

To begin with, online check-in will become the norm, including the home printing of bag tags. Kiosks will be difficult to keep sanitized if usage goes back to pre-COVID levels. Indeed, touchless technology will win out wherever it is possible. Fingerprints will likely lose out to facial recognition. The latter requires no physical interaction with a scanner and has proven reliable in aviation settings already.

RFID is the perfect investment One area where previous investment will be returning dividends is baggage. With radio frequency identification (RFID) and home delivery, there are now ways to know exactly where a bag is or even take it to a passenger’s house or hotel. This should stop the carousel crush and allow for a far smoother baggage process that also keeps passengers safe.

The other key part of the passenger journey—boarding and deplaning—will also follow new rules. Though deplaning will

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these, Hexaware is here to help. We can assess your needs and find the right technologies for your situation.

largely rely on manual instruction and cooperation, boarding could benefit from enhanced display systems, with passengers called forward by row to ensure as much social distancing as possible.

Ensuring passenger health A new element will be checking a passenger’s health to protect them, fellow travelers, and staff. Almost certainly, at some point in the travel process there will be temperature checks. A hand-held temperature gun is the obvious answer, with the gun giving a readout when in close proximity to a passenger.

Digital health passports are another idea, as a number of countries have suggested quarantine for air travelers, so these may well come into force should there be a renewed outbreak in the winter. New technologies will help keep airports clean, with robotics used for cleaning, and ultraviolet light technology may be used to disinfect hand luggage.

The challenges with new processes Three challenges concerning the use of new technologies and processes spring to mind: finding the money, getting countries to agree and making sure data is protected. For all of

A three-pronged approach Hexaware continuously aligns itself to provide disruptive solutions based on three cornerstones: Automate Everything™: we help reduce manual effort and intervention using a whole range of new-age technologies from robotic process automation (RPA) to AI technologies such as cognitive OCR, machine learning, natural language processing (NLP), speech recognition and image analytics.

Cloudify Everything™: we provide cloud services such as re-platforming or migrating to cloud native application architectures, which help in cost savings, scalability and real-time accessibility. Hexaware uses its intelligent smart automation re-platforming product ‘Amaze’ to help migrate monolith mainframe applications to the cloud.

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In the current scenario, Hexaware can help the aviation industry maneuver uncertainty by the digitization of core business processes, thereby reducing IT infrastructure and cost, building stakeholder confidence, and enhancing the passenger experience.

Read a full version of this special industry analysis at https://bit.ly/379epSR

2020 – 02 Airlines

09/07/2020 09:43

Data

In numbers

I M PAC T O F COV I D - 1 9 A I R L I N E I N D U S T RY E C O N O M I C P E R F O R M A N C E

Forecast 2020 Regional Performance. All regions will post losses in 2020 as airlines have not been able to match capacity cuts with the massive drop in demand.

North America

Europe

Asia-Pacific

-$23.1bn -$21.5bn -$29.0bn

Middle East

Latin America

Africa

-$4.8bn

-$4.0bn

-$2.0bn

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Airlines will lose a record $84.3 billion in 2020 as a result of the COVID-19 pandemic.

34.9%

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Industry costs will fall 34.9% compared with 2019 but revenues will see a 50% drop.

50%

32m jobs (including tourism) are estimated to be at risk. airlines.iata.org

09/07/2020 09:44

Data

Demand for air cargo/travel will rise in 2021

Gvt aid available to airlines due to COVID (US$)

2021 will see much stronger volumes but demand remains well below 2019 levels

As of mid-May, airlines worldwide are estimated to have received $123bn of government aid.

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Global passenger kms (RPKs) and cargo tonne kms (CTKs) flown 100

1

2

1

123

11 12

+25% vs 2020 +3% vs 2019

Cargo tonne kilometers flown

90

3

Total

110

Fuel taxes

Index to 100 in 2019

35

50

70

2007

2009

2011

2013

2015

2017

2019

2021

Cash injections

Operating subsidies/ Route funds

30

Equity financing

Passenger kilometers flown 40

Loan guarantees

50

Wages subsidies

Loans

60

Corporate taxes

Reimbursable/defferal only Non-reimbursable/waiver/discount

+55% vs 2020 -29% vs 2019

Ticket taxes

80

$110.8 billion (2020) vs $102.4 billion (2019). Cargo revenues will increase thanks to rates 30% higher. Limited capacity is available due to the lack of belly cargo space on passenger flights.

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Passenger numbers will roughly halve in 2020 to 2.25 billion, approximately equal to 2006 levels.

550billion Airline debt will increase by $120 billion to reach $550 billion or 92% of forecast 2021 industry revenues. airlines.iata.org

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14% Non-fuel unit costs will rise as fixed costs are spread over fewer passengers.

2020 – 02 Airlines

09/07/2020 09:44

DG interview

A very different industry IATA’s Director General and CEO Alexandre de Juniac says the complexity of restarting air transport demonstrates how much the industry could change as a result of COVID-19 WORDS: GRAHAM NEWTON

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C

OVID-19 has had a global effect on the air transport industry, touching every country. Director General and CEO of IATA Alexandre de Juniac talks about the effects of the pandemic on the industry, what air travel may look like short term, and his hope for the future.

Where does the COVID-19 pandemic rank in terms of industry crises?

This is completely different to any other crisis the industry has faced. The scale of the impact is at least an order of magnitude more severe than anything we have experienced before.

And the damage is operational as well as financial. This is not only about the enormous economic hit but also the potential far-reaching effects on business models and operational processes. We have never faced a challenge like it.

Have governments fully understood the extent of the impact on aviation? What more can they do?

IATA has been in direct contact with governments around the world asking for rescue packages for the industry. They have responded with an open, supportive attitude and many have announced significant measures, including the Airlines 2020 – 02

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United States and governments in Asia-Pacific and the Middle East.

There are three elements to our lobbying. First, we are asking for a softening of regulations, such as a waiver on slot rules and the ability to offer vouchers alongside refunds for cancelled flights.

Second, we are asking for all possible cost reductions, such as flight charges, parking fees for aircraft, and taxes. Most governments have answered this call.

Third, we need financial support of any kind.

This might be a direct capital injection or government-backed loans or loan guarantees; and tax relief.

All these elements are aimed at getting cash on the balance sheet. The cash burn rate is unbearable. Airlines will get through more than $60 billion in the second quarter alone.

If we can’t get enough cash flowing, then the entire industry faces bankruptcy.

How will the industry change following the crisis?

Certainly, some airlines will go bankrupt. That is inevitable. And for others to survive, consolidation will most likely happen around the larger carriers.

But how the industry will look will be largely dictated by how and when we restart the industry.

And that is the major challenge facing us. airlines.iata.org

09/07/2020 09:44

DG interview

80% Short haul needs about an 80% load factor to break even. If that is impossible to achieve then the consequences are enormous

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2020 – 02 Airlines

09/07/2020 09:44

DG interview

Will governments or airlines take responsibility for these measures?

I think that will depend on the measure. Clearly, if we are talking about testing for COVID-19 at every airport, it will need to be done by governments.

It involves specialists and specialist equipment and airlines can’t be expected to organize that.

Cleaning aircraft, on the other hand, is an area that airlines understand and can control.

But if we need to de-densify the aircraft—for example, by leaving the middle seat open in a row of three seats—that would be an immensely difficult business challenge that would need to be discussed. It would mean entirely new business models. Short-haul flights and low-cost carriers depend on volume. Short haul generally needs about an 80% load factor to break even. If that is literally impossible to achieve then the consequences are enormous.

Airlines 2020 – 02

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Of course, one way out is for any measure to be temporary. Some or all these factors may not be permanent. It could be that within a year or two, we will get back to “normal.” But we can’t assume that. We will need some clarity on the duration of measures to make the right decisions.

60bn

18

At the technical level, though it is a massive and complex project, we know what to do. We have the expertise and we can work through it.

But how to restart the market—stimulate demand, deal with new regulations, and evolving customer requirements—is far more difficult because we are dealing with unknowns.

Will health screening for COVID-19 need to be done at the departure or arrival airport or both, for instance? And will it be a simple temperature test or something more involved like a throat swab or blood test for immunity? Then we have to think about the equipment we may need to hand out to passengers, including masks, gloves or hand sanitizer. And if we need to maintain social distancing during travel, what will that mean for aircraft seating and for airport processes, such as the security checkpoint and boarding? Finally, there is the cleaning of aircraft. If that needs to be more extensive then turnaround times could be longer and schedules would need to change.

Individually, any of these factors would have a significant impact on previous operational practices. Taken together, we could be talking about a very different industry. We would not be restarting the same industry that was locked down.

Airlines will get through more than $60 billion in the second quarter alone.

How can airlines build in greater resilience to survive future challenges?

There are several points. Most obviously, we need to be much stronger in terms of cash reserves. Even when the industry was profitable, we kept emphasizing the overall structural weakness. Some airlines and some regions made up for shortfalls elsewhere. There needs to be a greater focus on being financially strong.

But aside from that, there are many areas to consider going forward. Airlines might decide to have reserves of equipment that limit the spread of a virus so that it can be rolled out at the first sign of a problem. We may need to update crew training to include more emphasis on areas such as hygiene. And we will learn lessons from all the other factors that may be involved in the restart of the industry.

What is IATA doing to help airlines through these exceptional times?

We are doing everything we can. As mentioned, we are lobbying governments worldwide to ensure airlines have enough cash to survive.

That is the primary concern.

But we are also managing the BSP [Billing and Settlement Plan] as carefully as possible to protect everybody who uses it. That is a complex, day-to-day challenge. We have postponed IATA membership fees that were due in the second quarter and also deferred a number of other costs where possible.

We are practicing what we preach and trying to ensure airlines have access to as much cash as possible right now.

What do you think will be the most crucial IATA initiatives to help airlines through the recovery phase?

airlines.iata.org

09/07/2020 09:45

DG interview

IATA’s key initiatives will show their worth in the recovery phase. Whether it is New Distribution Capability (NDC) or New Experience Travel Technologies (NEXTT), these initiatives have always had the customer and cost efficiency at their core. These drivers will be more important than ever.

But we have to get to the recovery phase first.

Right now, lobbying governments to keep airline cash flowing and working out how to restart the industry is the most important work we are doing.

Air cargo f lights are crucial to keeping the global economy ticking over and to delivering vital equipment and medicines in the fight against COVID-19.

How important is it to keep the entire industry structure healthy, including ANSPs and airports?

We are advocating for the entire aviation value chain because that chain gets its strength from airlines. We have pointed out that 32 million jobs dependent on aviation are at risk, for example.

And we acknowledge the help being given by air navigation service providers and airports.

We have to take the broader view because only together can we provide the connectivity that will help the global economy regain its strength.

And only by working together can we overcome the challenges in restarting the industry.

32m Do you think environmental pressure will increase once flying resumes, given many stories about lower pollution during the many national lockdowns?

IMAGES: ISTOCK

Has the crisis raised air cargo’s importance in terms of airline revenue and its role in the global economy?

Air cargo flights are almost the only flights right now. The sector is doing a very important job. It is crucial not only to the airlines but also to keeping the global economy ticking over and to delivering vital equipment and medicines in the fight against COVID-19.

Governments do understand that and in general have been very helpful in facilitating air cargo flights. They have reduced costs, worked on cargo crew regulations, and ensured the relevant flight permissions.

There is still some work to do but governments have been responsive. And it is another area where IATA has played a vital role. For example, we issued guidance on using passenger aircraft for all-cargo flights in just a few days. airlines.iata.org

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32 million jobs dependent on aviation are at risk

We are lobbying governments worldwide to ensure airlines have enough cash to survive. That is the primary concern

There have been lots of stories and plenty of statements from various parties about the CO2 reduction.

Even though airlines are under enormous financial pressure, we won’t give up on our environmental commitments. We will continue to reduce CO2, continue to reduce noise, and continue to invest in new, environmentally friendly technologies and sustainable aviation fuels. There will be no change in our targets.

What is your message to the industry and the millions of workers who depend on it for their livelihood?

Stay strong, have hope, and continue to work hard. Aviation is the business of freedom. We have a job to do to restart this industry in the safest and most efficient way possible so that together we can connect the world again.

2020 – 02 Airlines

09/07/2020 11:48

Industry restart

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“We had seen after 9/11 what could happen if the industry wasn’t properly consulted and prepared”

Airlines 2020 – 02

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airlines.iata.org

09/07/2020 09:45

Industry restart

A multi-layered approach A coordinated set of health and safety measures drawn up by the aviation industry’s international regulatory body will help the sector to take off again WORDS: GRAHAM NEWTON

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s COVID-19 hit its peak worldwide, aviation delivered vital aid, including equipment and medicines. Now, attention is turning to another cornerstone of air transport—supporting jobs and economic activity around the world.

Specifically, aviation is needed to kickstart a global economy that has slipped into a recession that many fear will bite deeper than that experienced in the financial crisis of 2008-09.

Long-term gain

However, it has become clear that restarting the industry will not be a simple matter of picking up where it left off.

“At first, the global lockdown was viewed as short-term pain for long-term gain,” says Nick Careen, IATA’s Senior Vice President, Airport, Passenger, Cargo, and Security. “But even in March it became apparent that there would be a need for a structured restart. We had seen after 9/11 what could happen if the industry wasn’t properly consulted and prepared and we wanted to make sure that didn’t happen again.”

After 9/11, security rules surrounding liquids and gels, removing shoes and taking items out of hand baggage proliferated, not necessarily in a harmonized manner. Subsequent improvements

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in security technology and data provision have made many measures obsolete, but governments are loathe to recalibrate. The result is a patchwork quilt of security measures.

Avoiding a similar patchwork of health and safety measures is at the heart of ICAO’S Takeoff guidance document, issued by the COVID-19 Aviation Recovery Task Force (CART).

Takeoff proposes a phased approach and a set of generally applicable measures, including: Physical distancing where feasible, and risk-based measures where it is not, for example in aircraft cabins The wearing of face coverings by passengers and aviation workers Routine sanitation and disinfection of areas that could potentially harbor the virus Health screening, that could include pre- and post-flight self-declarations, as well as temperature screening and visual observation, conducted by health professionals Contact tracing for passengers and aviation employees: updated contact information should be requested as part of the health self-declaration, with any interactions made directly though government portals Passenger health declaration forms, including self-declarations in line with the recommendations of relevant health

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2020 – 02 Airlines

09/07/2020 09:45

Industry restart

Principles guiding industry restart The CEOs of airlines on IATA’s Board of Governors have agreed that, as air transport restarts, aviation will Always put safety and security first Respond flexibly as the crisis and science evolve Be a key driver of the economic recovery Meet its environment targets Operate to global standards that are harmonized and mutually recognized by governments

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“Even as the pandemic continues, the foundations for an industry re-start are being laid through close collaboration of the air transport industry with ICAO, the World Health Organization, individual governments and other parties,” said Alexandre de Juniac, IATA’s Director General and CEO. “Much work, however, remains to be done. By committing to these principles, the leaders of the world’s airlines will guide the safe, responsible and sustainable re-start of our vital economic sector. Flying is our business. And it is everyone’s shared freedom.”

authorities. Electronic tools should be encouraged, to avoid the use of paper; and Testing, if and when real-time, rapid and reliable testing becomes available.

“The universal implementation of global standards has made aviation safe,” says Alexandre de Juniac, IATA’s Director General and CEO. “A similar approach is critical in this crisis so that we can safely restore air connectivity as borders and economies re-open.

The Takeoff guidance document was built with the best expertise of government and industry.

Airlines strongly support it.

“Now we are counting on governments to implement the recommendations quickly, because the world wants to travel again and needs airlines to play a key role in the economic recovery. And we must do this with global harmonization and mutual recognition of efforts to earn the confidence of travelers and air transport workers.”

Layered biosecurity

IATA played a key role in developing Takeoff and has also issued Biosafety for Air Transport: A Roadmap for Restarting Aviation, designed to guide the implementation of Takeoff recommendations. The roadmap outlines a multi-layered, evidence-based biosecurity approach using existing technologies.

The aim is to give governments and passengers the confidence that air travel is ready to resume. “The vital element is coordination,” says de Juniac. “If we don’t take these first steps in a harmonized way, we’ll spend many painful years recovering ground that shouldn’t have been lost.”

Pre-flight, governments will need to collect passenger data, including health information.

This can be done using well-tested channels already in place for eVisa or electronic travel

“Now the industry has restarted, we are in a much better position to advocate for One ID and a host of associated initiatives” Airlines 2020 – 02

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authorization programs. As IATA’s Careen stresses, the key here is for governments to share the data. To address privacy concerns, data will only be referenced when necessary and purged after a certain period of time.

Layers of protective measures need to be implemented at the departure airport. In the first instance, the hope is that the airport, landside as well as airside, can be kept as sterile as possible to reduce the possibility of aviation being a meaningful spreader of the virus.

Access to the airport will therefore be limited, and temperature screening in place.

Importantly, this must be a job for trained government staff. As Careen notes, “responsibility cannot be offloaded, and an airline agent is not a nurse.”

Meanwhile, social distancing will be enabled where possible to manage queues, and face coverings will be in use for passengers and staff in line with local regulations.

Contact points will be reduced, so check-in should be done online, including the selfprinting of bag tags. Bags drops will be automated, and self-boarding implemented.

Seat changes will not be permitted at short notice to ease contact tracing efforts.

Of course, cleaning and sanitization will be a priority, and hand sanitizers widely available.

Face coverings

In flight, IATA foresees several layers of protective measures: Face coverings will be required for all passengers and non-surgical masks for crew.

Simplified cabin service and prepackaged catering to reduce interaction between passengers and crew.

Reduced gathering of passengers in the cabin, for example by prohibiting queues for washrooms.

Enhanced and more frequent deep cleaning of the cabin.

At the arrival airport, there may be further temperature screening if required by the authorities. Customs and border control airlines.iata.org

09/07/2020 09:45

Industry restart

should be automated and include the use of mobile applications and biometric technologies. An accelerated processing and baggage reclaim will enable social distancing by reducing congestion and queuing.

Finally, health declarations and robust contact tracing should be undertaken by governments to reduce the risk of imported chains of transmission.

Careen says that COVID-19 testing and immunity passports would be integrated once the science is proven. Testing at the start of the process would create a sterile travel environment that would reassure travelers and governments and make some other measures unnecessary.

It is also the case that most measures are viewed as temporary. IATA recommends all measures are regularly reviewed, replaced when more efficient options are identified or removed should they become unnecessary.

Importantly, IATA remains opposed to social distancing on board aircraft—leaving the middle seat free—and quarantine measures on arrival. The former is not necessary with face coverings in place and the proven low risk of virus transmission inflight, while the latter are obviated by the combination of temperature checks and contract tracing.

IMAGES: SHUTTERSTOCK/ISTOCK

Global recognition

In addition to publishing the Roadmap, IATA has made the recommendations part of its Operational Safety Audit (IOSA) so airlines will need to show they can implement them.

Regulatory bodies have asked for this move, and IATA is confident that IOSA is the right vehicle to ensure that best practices are followed.

“This should provide a set of globally recognized measures,” says Careen. “There are a lot of recommendations to consider but without these measures passengers would not travel.

What we are proposing is the right compromise between minimizing the risk of contamination and a seamless system for passengers.”

But this is not a time for governments to regard it as a job done. Slots remain an issue and airlines.iata.org

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Travel corridors Air travel is already happening. Load factors for domestic services in China are up to about 60% and various countries are establishing travel corridors, such as between the Baltic states and between Australia and New Zealand “We will learn from the implementation of travel corridors,” says Nick Careen, IATA’s Senior Vice President, Airport, Passenger, Cargo, and Security. “For example, what is the risk-matrix governments are using to allow travel? We would like to understand how and why they are doing things and, if appropriate, leverage their ideas.

Most travel corridors implement measures consistent with our recommendations.”

there will need to be assurances that airlines will not lose slots in the recovery phase when demand is still limited.

Insurance is another area where there is a huge role for governments to play.

More thought also needs to be given to the entire logistical value chain. It was estimated that 100,000 ship crew needed to move freely around the world when lockdown hit, for example. Without crew being able to fly to fulfil new assignments, the maritime industry would have shut down, causing irreparable damage to world trade. And there are still countries where delivering vital supplies is problematic for air cargo, due to regulatory restrictions.

As for cost, Careen suggests that this will be shared by the various stakeholders. Most measures are simply process changes, rather than technological implementations.

23

Passenger experience

Although the work has been challenging, the opportunity is there to rewrite the passenger experience, according to Careen.

“Hindsight is always 20/20, but it is now clear why we have been pushing One ID,” he says of IATA’s effort to establish a single biometric identifier for air travel. “If we had a faster uptake of One ID, a touchless, seamless process would already be in place.

“Now the industry has restarted, we are in a much better position to advocate for One ID and a host of associated initiatives,” he adds.

The Roadmap’s recommendations will be an essential part of future travel even if they are not always in use.

“We want to get to the point where these measures can be turned on or off,” Careen concludes. “It would mean that in any similar crisis, we can prevent the grinding halt of the industry that we experienced in March 2020.

“A year from now, face coverings might not be necessary, but we should never be in a position where these measures can’t be implemented immediately. Having them as part of IOSA means they should always be active and available.”

2020 – 02 Airlines

09/07/2020 11:48

Opinion

Time to grow up Angela Gittens, Director General of Airports Council International (ACI) World, says the aviation community is entering a new phase of life WORDS: GRAHAM NEWTON

24 How badly has the coronavirus pandemic affected the airport community?

It has been devastating. We haven’t seen anything like it before. In April, ACI forecast a 3.3 billion reduction in passenger numbers, as measured by our figures, leading to a $76 billion shortfall in revenue. Just a month later, we estimate passenger numbers will be down 4.6 billion and airports will lose $97 billion.

It is a significant change. And it gives you a sense of just how fast and how far the industry has fallen. We are still in the tunnel and we can’t see the light at the end yet. The situation is bleak.

Small airports in particular are in huge trouble. Some will have lost all traffic and it’s likely to be a long time before flights land at such facilities even when the industry restarts.

What do you think will be the lessons learned from this crisis?

Obviously, we need to improve resilience.

That was being worked on anyway and I think operators know what they need to do. Airports need to have stronger balance sheets because the loss of an airport can have terrible consequences for a community.

Aviation also needs to think about the relationships it has with other expert bodies.

Airlines 2020 – 02

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In brief…

Angela Gittens 2008 Angela Gittens begins tenure as Director General of Airports Council International

June 2020 Succeeded by Luis Felipe de Oliveira, ALTA’s Executive Director & CEO

Highlight “The highlight has to be how ACI is helping its members and creating a sense of community. Our Airport Excellence program is about airports helping airports to improve safety, for example …

Airport Excellence now tackles security as well. There is nothing better than having an idea that works well enough for people to ask for more. The enthusiasm of members to help each other makes me very proud”

We have been engaging with health authorities on COVID-19 but what other relationships do we need to cultivate to be prepared for other potential problems in the future? We need to understand what others can offer and in turn help them to understand the aviation industry.

It is important for regulators to learn lessons too. The emphasis was on keeping airports lean and mean with a just-in-time approach. But there needs to be a change in strategy. Though you hope never to see such a crisis again, you have to plan for it. We need greater reserves in future.

How will airport management change as the industry restarts?

Travel will be a different experience. Social distancing won’t be possible at many airports— they would run out of capacity pretty quickly if we had to enforce that. Masks are one way to help with that and so masks will be commonplace for air travel until a vaccine is found.

There will be changes in hygiene regimes too.

Surfaces will have to be disinfected regularly.

More attention will have to be paid to air filtration and its maintenance. And we will have to look at how and whether we reuse items.

For those staff that are in direct contact with customers, airports will need to supply personal protective equipment and the right training. How do you deal with customers that need wheelchair assistance throughout the airport, for example?

[They are] likely to be elderly or vulnerable and you must ensure their safety and the safety of staff.

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he outgoing Director General of the ACI Angela Gittens would have relished helping restart the industry post-COVID-19.

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09/07/2020 09:46

Opinion

Though you hope never to see such a crisis again, you have to plan for it. We need greater reserves in future

25

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2020 – 02 Airlines

09/07/2020 09:46

Opinion

On top of this, touchless processing will come to the fore. Face recognition technology may well dominate in future. That could mean a huge cost even though the investment in fingerprint technology has not yet had time to deliver a return.

So, costs will escalate, and revenues will continue to be low. The question is how long these changes will last. Are we witnessing a permanent change in customer behavior and the travel process? Nobody can answer that with any confidence right now.

Are you happy to be stepping down at this time or would you have welcomed the challenge of restarting the industry?

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Definitely the latter! I feel bad to be leaving the industry that I love and that has been so good to me when it is in a moment of real need. The consolation is that I have a great successor, Luis Felipe de Oliveira. He has the right background, incredible energy, and I know I am leaving the airport community and aviation in good hands.

How can the airline-airport relationship be improved and what are the main points of contention?

I hope the airline-airport relationship has matured during my 12 years in charge. In the old days, so many of the entities were public companies and governments managed the relationships according to their needs at the time.

Slowly, a business outlook took hold and where companies remained in public hands they at least had to be self-sufficient and not a drain on the taxpayer. All relationships moved on to a commercial footing and it became time for our parents to step aside. Of course, some parents won’t let go but I think we’re getting there.

This crisis will help us grow up even more. It has emphasized how we all need each other, airlines, airports, and air navigation service providers.

Charges will continue to be a difficult subject.

Costs are going up for all of us and revenue will be scarce for some time yet. The solution though is simple: talk. What neither side will want is a surprise.

Airlines 2020 – 02

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$97bn

ACI forecast…

April: 3.3 billion reduction in passenger numbers, $76bn shortfall in revenue May: 4.6 billion reduction in passenger numbers, airports will lose $97bn

What more can the industry do to encourage diversity and is there a danger the issue will lose momentum given the circumstances?

Topics like diversity will become even more critical to the future of the industry.

We will see even more innovative solutions as the industry adapts and offers a new customer experience. Customer interaction will be totally different. That means different skills will be needed and that will encourage diversity.

What was the highlight of your time in charge?

The highlight has to be how ACI is helping its members and creating a sense of community.

Our Airport Excellence program is about airports helping airports to improve safety, for example.

Every airport has something to learn and every airport has something to teach. You can’t have just one airport, so our members understand that they need each other to thrive to create a network that appeals to airlines and travelers.

Airport Excellence now tackles security as well. There is nothing better than having an idea that works well enough for people to ask for more. The enthusiasm of members to help each other makes me very proud.

Who has been the biggest influence on your career or strategies?

Lou Turpen, the former CEO of Greater Toronto Airport Authority and San Francisco Airports Commission. He taught me about leadership. I love to get involved and do things. But Lou once deliberately gave me so much work that he forced me to delegate. That changed my whole attitude and taught me how to be an executive.

Any final words of wisdom for the industry?

Don’t be trapped by the past. The old days are gone and we have to act like adults. For airlines and airports, the biggest problems will be external.

We will only overcome them by working together.

We will have our differences, but these can be sorted out internally. What is really important is presenting a united face to external challenges.

Anything other than that weakens us all. airlines.iata.org

09/07/2020 09:46

Aviation Is a Key to Global Economic Recovery Fly to a “New Normal�

TAMURA Akihiko President & CEO Narita International Airport Corporation

IATA.JUNE20.027.indd Tokyo Narita FP.indd 1 27

We congratulate IATA on its 75th anniversary.

Resurgence of the aviation industry is vital for the recovery of the world economy.

Narita International Airport, Tokyo, is resolved to join hands with our airline partners and stakeholders more strongly than ever before to overcome this challenge.

We will restore and further expand the global air network together.

30/06/2020 10/06/2020 09:40 13:48

Cargo

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any airlines have been involved in life-saving flights during the COVID-19 pandemic ensuring, together with their partners in the logistics chain, that personal protective equipment (PPE) and urgent medical supplies were able to reach their destinations.

“Without air cargo, there is no doubt that the impact of the global coronavirus outbreak would have been far worse,” says Glyn Hughes, IATA’s Head of Cargo.

Keeping logistics open

IMAGES: GETTY

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The industry’s performance is all the more remarkable considering all the challenges it has had to face. In the early days of the global pandemic, the temptation was to shut all travel down, including cargo flights. But IATA worked with ICAO to urge governments to keep global logistics open. Generally, governments responded and supported the industry’s efforts.

But that still left a lot of work to be done.

Alternative airports needed to be kept functioning, for example, as part of flight safety is having these available in case of emergencies.

But many of these secondary facilities had lost all service and so were effectively shut down.

Major hubs, meanwhile, were still operating with existing slots and curfews. These had to be changed or waived to allow cargo flights to operate and, as most were chartered, permits needed to be fast-tracked to allow them to fly.

Another operational issue was resolving difficulties with crew regulations. Many countries were insisting on a 14-day quarantine for individuals coming from abroad. Clearly, this would not allow cargo to operate efficiently and also would put enormous strain on crews.

Exemptions were therefore needed, while taking into account all possible safety measures.

Unfortunately, there are still many examples of delays in each of these areas, and so IATA continues to urge governments to: Cut the paperwork for charter operations Exempt cargo crew from quarantine rules that apply to the general population Airlines 2020 – 02

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Overcoming every obstacle The value air cargo brings to the world has never been more apparent, but challenges remain WORDS: GRAHAM NEWTON

airlines.iata.org

09/07/2020 09:47

Cargo

Ensure there are adequate staff and facilities to process cargo efficiently.

Extra capacity

90% of passenger flights were grounded, taking out 40%-45% of cargo capacity.

In March 2020, demand fell 15% compared with March 2019 airlines.iata.org

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Although air cargo was soon flying, it became clear that the demand for its services was outstripping supply. Some 90% of passenger flights were grounded, which took out about 40%-45% of cargo capacity. In March 2020, demand fell 15% compared with March 2019, but capacity was reduced by 23%.

The solution—to use passenger aircraft for all-cargo flights—brought a fresh set of issues, as cargo cannot be carried on seats, for example, unless approval is granted by the civil aviation authorities. Further approvals are required if airlines decide to remove seats entirely, with the primary focus being on flight safety.

Of course, being able to use the passenger cabin does make a big difference to the amount of cargo that can be carried. Around 1,000–1,500 extra boxes can be accommodated, although getting them in through passenger doors and packing them is a further obstacle that can only be overcome with a human chain.

IATA published guidance early on to help convert passenger aircraft into cargo carriers.

Dangerous goods cannot be packed in the cabin, for example, because of the difference in fire detection and suppression systems. And the weight restrictions in the overhead compartments must be respected.

“But the need to get urgent medical supplies and equipment to where they were needed was too important,” says Hughes. “So the industry united to find solutions.”

Evolving challenges

Other challenges appeared. Where to fly to and from illustrates the case in point. Paracetamolbased products—the main home treatment— are predominantly manufactured in India and China. But as these countries experienced lockdowns and as the virus took hold elsewhere, supply and demand shifted and has been doing so constantly ever since.

“Without air cargo, there is no doubt that the impact of the global coronavirus outbreak would have been far worse” Glyn Hughes, IATA’s Head of Cargo “It will probably be a long time yet before flight networks resemble their pre-COVID-19 look,” says Hughes, “as everybody wants to avoid a second wave of the virus. Simply, the gradual build-up of the passenger network won’t meet the demand for cargo, such as moving fresh fruit and flowers.”

However, exactly how demand will play out is difficult to assess. Undoubtedly the global recession will bite deeply, and global trade is a significant driver of air cargo fortunes. But pent-up demand is expected to balance this dip, at least initially. This spike in consumer retail could be particularly beneficial to air cargo as maritime cargo struggles to react quickly enough to market movements.

The World Trade Organization scenarios envisage a drop in cargo tonne kilometers of between 13% and 32% for 2020. An IATA business confidence survey with airline heads of cargo is slightly more optimistic. Although volumes are expected to fall, respondents believed the impact won’t be as great as in the 2008-09 financial crisis.

Hughes also points to the positive. As the industry reassesses the way it operates, digitization and automation will doubtlessly move up the agenda, bringing greater efficiency.

Most importantly of all, though, is an appreciation of the global logistics network, truckers, and handlers as much as air cargo.

The work done by the air cargo supply chain has made the public and governments aware that the network is about far more than just getting the latest gadget on the shelves.

Hughes concludes: “The hope is that this appreciation transfers to harmonized, smarter regulation, and effective procedures that enhance the value air cargo brings to the world.”

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2020 – 02 Airlines

09/07/2020 09:47

Opinion

Value is in the system Eamonn Brennan, Director General of Eurocontrol, says cooperation across aviation sectors is the key to an effective restart of the industry WORDS: GRAHAM NEWTON

urope’s air traffic has been decimated by the COVID-19 pandemic.

Eamonn Brennan discusses the way forward to ensuring seamless air traffic management of the European skies coming out of the crisis.

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How badly has air traffic been affected by the outbreak?

The coronavirus pandemic has been catastrophic for European traffic. There was a 90% reduction in air traffic across the network at the worst point of the crisis. Virtually everything in the sky was cargo with just a few passenger flights.

The system has been decimated and, most importantly, all the cash has been taken out of it.

The Network Manager will become extremely important and help Europe move toward a seamless, digital sky.

Airlines 2020 – 02

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What have ANSPs been doing to survive?

Eurocontrol has been working closely with all 41 of its member states to ensure service. But, of course, they have all had to cut back and what we’re seeing is effectively a night service.

As of mid-March, the majority of our air navigation service providers (ANSPs) had about three months of cash reserves. That’s why we worked together with states to ensure they have funding for another four months beyond that.

Our hope is that by September 2020 there will be enough of a recovery in traffic for them to survive.

We are only as strong as the weakest link. If one ANSP fails, then it will affect the whole system and the aviation value chain.

Why did you decide to assist airlines?

It was apparent that airlines were suffering a meltdown in bookings before the entire system more or less went into lockdown. There were flights with very few people on them, partly because airlines were at this stage still trying to preserve their slots at key airports.

But they were losing money fast. As I mentioned, there is just no cash in the system.

We organized a payment deferral scheme, worth about €1.1 billion, so airlines don’t have to give our ANSPs any money for four months, from March to June, inclusive. They don’t have to start paying these fees back until November 2020.

This affects the ANSPs too, which is why we came up with the second phase of the plan to provide them with a loan to see them through.

The simple fact is airlines couldn’t pay even if we demanded it. And it was better to have a structured process in place than a complete collapse of the system. Everyone will have to take some pain as a result of the crisis. But it is critical that we support and not cannibalize each other.

Are there any lessons for ATM to learn from the crisis?

I think the main lesson we have learned is that ATM is not scalable. We can’t easily scale up or down according to demand because too many of the overheads are fixed for a number of years.

In 2018, the network was being overloaded and in 2019 we took some drastic measures to keep

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Opinion

€1.1bn Eurocontrol organized a payment deferral scheme from March to June, worth about €1.1 billion, so airlines don’t have to give ANSPs any money for four months

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Opinion

There was a 90% reduction in European air traffic across the network at the worst point of the crisis

traffic flowing, such as moving flights into Poland from Germany. Now, we have just 10% of those flights but it has been difficult to scale down in any meaningful way in such a short space of time.

That has consequences for the Single European Sky. There has been some excellent work on the project in terms of bringing down cost and harmonization, but we have not seen any real consolidation of service.

To react quicker and to be scalable to a degree, the Network Manager in Europe will have a much bigger role to play. That should bring the seamless European sky a little closer.

How difficult will be the industry restart be, particularly as individual nations are at different points in the crisis?

It’s going to be a lot tougher and slower than we imagined at first and we will not see a V-shaped bounce back. The key is that it must be a coordinated restart. There must be agreement on social distancing, temperature checks, crew licensing and so forth. Otherwise, we will have a haphazard and disjointed restart that will be reflected in weaker demand.

We estimate that if the restart is coordinated then we will get to an appropriate level of capacity in September. But if we fail to reach agreement then demand and capacity will suffer and be some 50% lower than possible at the end of the year.

The Network Manager will issue updates to its recovery plan on a weekly basis so we achieve a safe and smooth recovery phase for all operational stakeholders. This will allow network actors to ramp up activities progressively as traffic returns.

But it won’t be easy. All our 41 jurisdictions value their decision-making freedom and data privacy and so we are operating with some significant constraints. Other parts of the world will find it easier to restart than Europe.

Are you concerned countries would see even greater value in maintaining their own services?

Nothing good will happen if we don’t have a network that is being managed properly. We are seeing some states making their own rules, but I Airlines 2020 – 02

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believe all will start to see the value and the economic power in ensuring the overall network is strong. The Network Manager will become extremely important and help Europe move toward a seamless, digital sky.

All partners in the aviation value chain face higher costs even though revenues will remain low. Are ATM charges a battle waiting to happen or can we avoid it? We are not going to go back to the same industry. This will not be a resumption of business as usual.

Already we have seen some governments provide significant bailouts of airlines because it is not fair to have airlines pay for what is essentially a force majeure. Doubtless there will be many airline casualties too.

The airline landscape will therefore change. But we need to find a way to get back to a level playing field. If we don’t have a competitive industry, then prices go up and demand will fall. To begin with, fares and charges will be kept low as the industry attempts to stimulate demand. But capacity will be kept in check by the airlines and costs will be high for all partners. Inevitably, prices will go up and demand could suffer as a result.

So, we all have to remember to be competitive.

If we can do that then the conversation about charges will not hamper the industry.

Will any particular technologies or strategies jump to the fore or will the industry be stuck in survival mode for several years yet?

Three things jump to mind. The first is a greater emphasis on virtual centers. These virtual centers could have an enormous impact on service capability while lowering costs. And the systems are open, which brings all manner of benefits and opportunities.

The second is Free Route Airspace (FRA). If we can get FRA throughout Europe, then effectively have a seamless sky. We have managed to implement it in certain areas already, but the real value of FRA is having it across the entire system.

The third is dynamic airspace configuration.

That will give us the flexibility to handle traffic demand in the most effective way. airlines.iata.org

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Weather data

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Weather forecasts lack data due to COVID-19 With the northern hemisphere hurricane season only weeks away, forecasters are facing an unexpected and worrying downside of COVID-19’s impact on flying WORDS: ANDREW STEVENS

C

rucial weather observations supplied by commercial aircraft have been drastically cut after the grounding of most of the global fleet. Just a quarter of the average 800,000 daily readings of temperature, wind strength and direction are being sent automatically from aircraft during flight.

The impact on weather forecasts is “significant,” says the Geneva-based World

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Meteorological Organization (WMO). “Aircraft contribute a lot to the accuracy of forecasting of most weather systems and phenomena, including forecasts associated with systems like hurricanes,” says WMO Scientific Officer Dean Lockett.

Lockett co-ordinates the international activities of the WMO Aircraft Meteorological Data Relay (AMDAR) system, which supplies weather data to the organization’s Global Observing System. It is the backbone for all 2020 – 02 Airlines

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800,000 There are just a quarter of the average 800,000 daily readings of temperature, wind strength and direction being sent automatically from aircraft during flight

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“Aircraft contribute a lot to the accuracy of forecasting of most weather systems and phenomena, including forecasts associated with systems like hurricanes” Airlines 2020 – 02

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15% The center estimates that if all data provided by aircraft was cut off, the accuracy of weather forecasts would fall about 15%

weather and climate-related information for the 193 WMO member states.

“Even though aircraft fly around hurricanes to avoid the worst of the weather, the data they collect is still critical, because it feeds into forecasts for the intensity and future track of such systems,” he said. “This data is very important, affecting computer-based modeling and the prediction of those types of systems.”

The Atlantic hurricane season runs from June 1 to November 30, with the eastern Pacific season covering May 15 to November 3.

Information from commercial planes is one of several sources that meteorological bodies use to predict the weather. Altogether millions of readings from aircraft, satellites, ships, ground stations, and weather balloons go into modeling Numerical Weather Prediction (NWP) systems that provide the basis of global weather forecasts.

In normal times, observations from aircraft increase the accuracy of weather forecasts about 10%. Without that information the model is significantly degraded, says Lockett.

The WMO is still assessing how seriously the loss of data will be to the accuracy of weather modeling. Through AMDAR about 250 million observations a year are fed into computer models at the US National Weather Service.

As at the end of March, data provided by US

aircraft had dropped by half. At the European Centre of Medium Range Weather Forecasts (ECMRWF), readings provided by aircraft across the continent has been cut by 80%.

The center estimates that if all data provided by aircraft was cut off, the accuracy of weather forecasts would fall about 15%.

Airlines themselves also lose out.

Information on wind strength and direction is used to calculate wind shear, the location, and strength of the jet stream and conditions that can cause icing. It is used by pilots to plot the quickest and safest route around bad weather.

Less than 18 months ago, IATA launched the Turbulence Aware program using turbulence measurements from aircraft to improve the safety for crew and passengers and optimize fuel burn.

Airlines use these reports collected and disseminated by IATA in real time to make operational decisions about turbulence mitigation. The program has gained strong industry support with 35 airlines participating in the operational pilot in 2019. The program became fully operational in 2020.

Meanwhile, IATA is also working with the WMO to expand the global coverage of AMDAR. Currently 43 airlines support the system. On average, an aircraft will send around 100 or more observations per flight, most coming during the ascent and descent.

“We are trying to capture a snapshot of the atmosphere in the vertical and the first five to six kilometers are particularly important,” says Lockett. “And the more readings we have, the more accurate the modeling is.”

The information is particularly important for a 24-hour snapshot of the weather, but the WMO is also building a database that could be used in climate change modeling.

But for now, there will be significant holes in both short and long-term readings as COVID-19 shuts down the global airline industry. More concerning is that it could take years before the industry returns to its pre-coronavirus levels and same level of accuracy in weather forecasting.

IMAGES: ISTOCK

Weather data

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