Airlines 2022-01

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RISE IN AVIATION CYBERCRIME Airlines take cybersecurity to the next level

2022 – 01

CEO Interviews TAP Air Portugal, Hawaiian Airlines | Finance IATA Pay Diversity Dr. Harpreet A. De Singh | IATA Opinion Aviation and global economy | Wellbeing Spotlight on cabin crew | Americas Collaboration vital

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THE WORLD IS BEAUTIFUL PLACE

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airbus.com

Keeping it that way is at the centre of all we do. That’s why, with our unwavering commitment to decarbonisation, Airbus is paving the way for sustainable aerospace. Today, our technological developments are already helping to safeguard our precious planet. Discover more about how we’re leading the journey, shaping a brighter future for generations to come.

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21/02/2022 16:05 17/01/2022 10:22

SUSTAINABILITY A CLEAR AMBITION Sustainability is at the heart of our business.

From the beginning, we have invested in technologies to make our engines cleaner, quieter 1>4§=?B5§56 395>DÁ§ EB§3<51B§1=29D9?>§9C§D?§@EC8§D85§ <9=9DC§?6§9>>?F1D9?>¿§45=?>CDB1D9>7§E>3?=@B?=9C9>7§ D538>?<?795C§D81D§G9<<§85<@§@1F5§D85§G1I§6?B§1>§ ever more sustainable future. A common mission, extraordinary together.

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Airlines.

Contents 2022 – 01

Comment

26 Restoring the network

5 Willie Walsh, Director General

Time for governments worldwide to ease restrictions for travelers

22

Peter Ingram, CEO at Hawaiian Airlines, on creating a rich experience for travelers

Features 38 IATA Opinion: Marie Owens Thomsen, Chief Economist at IATA

22 Cybercrime

Taking aviation cybersecurity to the next level to prevent cyber attacks

Highlighting the role that aviation plays in global economics

30 Diversity & inclusion

Digest

Inspirational Role Model at the IATA D&I Awards, Dr. Harpreet A. De Singh

10 IATA and industry update

Omicron hits improving passenger demand, Cargo still sending strong signals, HML is step forward for One ID

5

32 Finance

IATA Pay solution moves payments forward for customers and airlines

14 Data: In numbers

Demand for aviation

34 Wellbeing

CEO Interviews

Cabin crew face a stressful time as momentum for recovery struggles

16 Keeping in step for recovery

CEO at TAP Air Portugal, Christine Ourmières-Widener, says all stakeholders need to be in alignment

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 Production editor Vanessa Townsend 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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36 Americas region

16

Advertising Business development manager +44 (0)20 7324 2763 airlines@redactive.co.uk

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For Airlines. subscription requests, or change of address notifications, email Airlinesint@iata.org We welcome feedback and content ideas

36

Collaborative decisions are vital to aviation progress in the Americas

Airlines. ISSN 1360-6387 The opinions expressed in this publication are those of the individual authors or advertisers and do not necessarily reflect those of Redactive, IATA or its members. The mention of specific companies or products in articles or advertisements contained herein does not imply that they are endorsed or recommended by IATA or Redactive.

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2022 – 01 Airlines

28/02/2022 14:47

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21/02/2022 16:08

Willie Walsh: DG Insight

Time to ease travel restrictions The current situation of travel restrictions is a mess. There is one problem—COVID-19. But there seem to be more unique solutions to managing travel and COVID-19 than there are countries to travel to. Indeed, research from the Migration Policy Institute has counted more than 100,000 travel measures around the world that create complexity for passengers, airlines, and governments to manage.

IATA is calling for all travel barriers to be removed for those fully vaccinated with a WHO-approved vaccine. And non-vaccinated travelers should enjoy quarantine-free journeys with proof of a negative pre-departure test.

Because travelers, with very few exceptions, present no greater risk than exists in the general population. A study

by Oxera and Edge Health demonstrated that because Omicron is highly prevalent in the United Kingdom, if all travel testing requirements were removed the country would not see any impact on Omicron case numbers or hospitalizations. airlines.iata.org

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We need simple, predictable, and practical means of living with the virus that don’t constantly default to de-connecting the world. We must aim at a future where international travel faces no greater restriction than visiting a shop, attending a public gathering, or riding the bus.

This aligns with the advice from public health experts to shift the policy focus from an individual’s health status toward policies focusing on population-wide protection. Governments and the travel industry must be well-prepared for the transition and ready to remove the burden of measures that disrupt travel.

As the first quarter of the year is key to bookings for the peak-northern summer season, it is important to provide certainty to potential travelers as early as possible.

The escalation of events in the Ukraine is deeply saddening. We hope for an early and peaceful resolution.

For aviation, safety is always the top priority.

7

On US pre-departure testing.

“Removing the pre-departure testing requirement for fully vaccinated travelers will greatly support the recovery of travel and aviation in the US and globally without increasing the spread of COVID-19 in the US population.”

On the UK’s decision that airlines will need to use 70% of slots this summer.

“The UK government decision on slots, proposing the highest slot use threshold in the world, makes a mockery of their claims to support the airline industry recovery and to be champions of the environment.”

On strong cargo results for 2021.

Willie Walsh IATA Director General

“Air cargo had a stellar year in 2021.

Growth opportunities, however, were lost due to the pressures of labor shortages and constraints across the logistics system.”

2022 – 01 Airlines

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8

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IMAGE: GETTY

Airlines are hopeful of a positive northern hemisphere spring and summer to drive demand toward pre-pandemic levels. For that to happen, however, governments must remove all travel barriers for those fully vaccinated with a WHO-approved vaccine. A study has demonstrated the extremely limited impact of travel restrictions on controlling the spread of the virus.

The Big Picture

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28/02/2022 14:49

Digest Omicron hits passenger demand IATA announced full-year global passenger traffic results for 2021 showing that demand (revenue passenger kilometers or RPKs) fell 58.4% compared with the full year of 2019. But this was an improvement compared with 2020, when full-year RPKs were down 65.8% versus 2019.

International passenger demand in 2021 was 75.5% below 2019 levels.

Capacity (measured in available seat kilometers or ASKs) declined 65.3% and load factor fell 24 percentage points to 58%.

Domestic demand in 2021 was down 28.2% compared with 2019. Capacity contracted 19.2% and load factor dropped 9.3 percentage points to 74.3%.

around 56.5% below 2019 levels. Instead, volumes rose only marginally to 58.4% below 2019, from -60.5% in November.

“Overall travel demand strengthened in 2021. That trend continued into December despite travel restrictions in the face of Omicron,” said Willie Walsh, IATA’s Director General. “That says a lot about the strength of passenger confidence and the desire to travel. The challenge for 2022 is to reinforce that confidence by normalizing travel.

France and Switzerland [recently] announced significant easing of measures. The United Kingdom has removed all testing requirements for vaccinated travelers. We hope others will follow their important lead.”

IMAGES: GETTY/ISTOCK

10

Total traffic for the month of December 2021 was 45.1% below the same month in 2019, improved from the 47% contraction in November, as monthly demand continued to recover despite concerns over Omicron. Capacity was down 37.6% and load factor fell 9.8 percentage points to 72.3%.

Omicron travel restrictions slowed the recovery in international demand by about two weeks in December.

International demand has been recovering at a pace of about four percentage points/month compared with 2019. Without Omicron, international demand for the month of December was expected to improve to

Airlines 2022 – 01

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airlines.iata.org

28/02/2022 14:50

Digest

Cargo continues to send strong signals IATA data for global air freight markets shows that full-year demand for air cargo was up 6.9% in 2021, compared with 2019 (pre-COVID levels) and 18.7% compared with 2020.

This was the second biggest improvement in year-on-year demand since IATA started to monitor cargo performance in 1990 (behind 2010’s 20.6% gain), outpacing the 9.8% rise in global goods trade by 8.9 percentage points.

Global demand in 2021, measured in cargo tonne-kilometers (CTKs), was up 6.9% compared with 2019 (7.4% for international operations). Capacity, measured in available cargo tonne-kilometers (ACTKs), was 10.9% below 2019 (12.8% for international operations).

The lack of available capacity contributed to increased yields and revenues, providing

support to airlines and some long-haul passenger services in the face of collapsed passenger revenues. In December 2021, rates were almost 150% above 2019 levels.

Economic conditions continue to support air cargo growth. For instance, global goods trade rose 7.7% in November (latest month of data), compared to pre-crisis levels. And global industrial production was also up 4% over the same period.

Supply chain issues that slowed the pace of growth in November remain as headwinds.

Labor shortages, for example, partly because of employees being in quarantine, insufficient storage space at some airports, and processing backlogs all continue to put pressure on supply chains.

HEALTH MASTER LIST A STEP FORWARD FOR ONE ID IATA welcomed ICAO’s creation of a global directory of public keys required for authentication of health credentials. The directory— called the Health Master List (HML)—will make a real contribution to the global recognition and verification of government issued health credentials.

A public key enables third parties to verify that a QR code displayed on a health credential is authentic and valid. The HLM is a compilation of public key certificates signed by ICAO and regularly updated as more health

airlines.iata.org

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proofs are issued, and new public keys required. Its implementation will ease the global recognition of health credentials outside of the jurisdiction in which they were issued.

“For international travel today, it is critical that COVID-19 health passes can be efficiently verified outside of their country of issuance ,” said Willie Walsh, IATA’s Director General. “Though the keys for verification are available individually, the creation of a directory will significantly cut complexity, simplify operations, and improve trust in the verification process. ”

6.9%

As we went to press the Ukrainian government closed its airspace in response to Russian military activity. IATA Director General Willie Walsh said, BREAKING “Safety is always the top priority for aviation. We hope for an early and NEWS peaceful resolution.” IATA will continue to support airlines as the plan their operations around airspace closures in Ukraine and parts of Russia.

11

Health Master List: The new HML will improve the global recognition of COVID-19 health passes

IATA data for global air freight markets shows that full-year demand for air cargo increased 6.9% in 2021, compared with 2019 (preCOVID levels) and 18.7% compared with 2020.

2022 – 01 Airlines

28/02/2022 14:50

Sponsored Feature: Pribas/Nagarro

Arnulf A.C. Pribas CEO, pribas airlines solutions GmbH

Amit Chawla Global Business Unit Head, Travel & Logistics, Nagarro

Transforming airline distribution pribas and Nagarro are bringing together NDC Offer and Order Management with digital engineering capability pribas and Nagarro are transforming

12 airline distribution by bringing together NDC Offer and Order Management with digital engineering capability, enabling greater airline customer engagement.

IATA pushes for and expects a modern retailing ecosystem to substitute the legacy airline distribution world until the end of the current decade. Although the New Distribution Capabilities (NDC) and the ONE Order initiative define the new industry standard and deliver a robust blueprint, most airlines have found it challenging to embrace the change.

“From our point of view, if airlines want to regain control of their products and their customers, they should move away from outdated systems and processes as quickly as possible,” says Arnulf A.C. Pribas, CEO of pribas airlines solutions.

“To make this shift, it is important to use the appropriate instruments. The basis is an Offer and Order Management System that uses the new standards that can flexibly implement the airline’s requirements depending on the business model and customer groups. Couple this with an NDC middleware, which can choreograph the Offer and Order Management Systems with the remaining

Airlines 2022 – 01

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airline ecosystem such as CRM, airport systems, DCS, and revenue management, and we have a complete modern distribution ecosystem,” adds Pribas. pribas airline solutions was founded in 2018 as a spin-off of the pribas holding. Over the past three decades, it has earned a reputation for connecting airlines and touristic systems thought to be impossible to connect. Their cloud-based AirBrokerONE is the most mature Offer and Order Management System that includes reservation and inventory on the market, based purely on NDC and ONE Order.

Likewise, Nagarro is a reputable global digital engineering leader with more than 15 years of experience in the industry. The company’s offerings include digital product engineering, customer relationship management, customer experience, AI, ML, and cloud-based solutions. Nagarro is currently helping airlines build their next-gen distribution systems by providing NDC strategy, consulting, middleware development and system integration, as well as customer platforms.

The two partners believe that creating a middleware between all internal and external platforms will immensely simplify airline operations. Be it mobile or web-based interactions, interline or codeshare interactions, PSS-CRM-Revenue management system interactions, travel agents-revenue manager interactions, etc., a middleware will induce agility, faster time-to-market, and operational effectiveness. It will ensure replicability and reduce duplication, saving all the other APIs from constant changes. A middleware with the right capabilities will ensure airlines maximize all the benefits NDC has always promised.

Taking the leap “The next few years are going to be critical for NDC adoption, and we believe many

airlines.iata.org

28/02/2022 14:51

Sponsored Feature: Pribas/Nagarro

A fully NDC-compliant airline In 2021, Nagarro helped Norwegian start-up airline Flyr successfully launch a new, digital first-airline based on pribas’ OMS solution, AirBrokerONE, powered by an NDC middleware in less than ten months. The solution enables them to create new fare choices at will (recently launched UNG fare, completed 50,000 bookings) with a lean and agile operational setup.

“Getting the chance to help define one of the world’s first native IATA One Order & NDC airlines has been highly challenging and motivating at the same time. We take immense pride in playing such an important role in helping Flyr launch their operations and delivering an exceptional digital experience to their customers,” says Amit Chawla.

airlines will transition towards a modern NDC distribution,” says Amit Chawla, Global Business Unit Head for Travel & Logistics at Nagarro.

“The overall airline ecosystem is complex and has taken decades to reach its current state. Added to this is the complication of all the different ecosystem providers and partner airlines being in their own journey of NDC adoption. While a working Offer and Order Management Solution is the crux, airline managers should consider the challenges of combining different solutions from different providers to provide new distribution and retailing opportunities. This is critical for a smooth operational transition,” adds Chawla.

“A key challenge today while thinking about transition is to manage the co-existence/ status-quo of the legacy and NDC-based systems. But we can help airlines answer this question. Our Offer and Order Management

airlines.iata.org

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Solution offering is mature, and together with the integration capabilities from Nagarro, we have the experience to cater to these transition scenarios,” says Pribas.

“It is always convenient to maintain the as-is status,” he jokes. The changing market dynamics and evolution of passenger behavior have reiterated the need for airlines to move away from legacy systems to a modern distribution system that improves their ROI and meets the needs of the new-age passenger.

Realizing the benefits Upcoming technologies such as AI, AR/VR, and blockchain will be instrumental in helping airlines achieve the NDC vision of taking airline distribution to the next level.

13

“The impact of these technologies on retailing could be immense as already evident in other industries such as e-commerce.

Complementing the Offer and Order Management systems with these technologies would help airlines turn their end vision of hyper-personalized, contextualized and rich content into reality,” says Chawla.

“This would further build on the capabilities of the Offer and Order Management Solution as the digital engineering capabilities can create a personalized recommendation engine for ancillaries and flight bookings for passengers. They can also create an analysis of passenger preferences to share the offer in the right format with the passengers,” Pribas concludes.

For more information on pribas airline solutions, visit https://www.airline.pribas.com For more information on Nagarro, visit https://go.nagarro.com/travel-and-logistics

2022 – 01 Airlines

28/02/2022 14:51

Data

In numbers Domestic demand in 2021 was down 28.2% compared with 2019. Domestic RPKs were 62.4% of the total market in 2021.

28.2%

D E M A N D F O R A V I AT I O N

Capacity contracted 19.2% and load factor dropped to 74.3%

14

2.2bn passengers in 2021 This figure is 58.4% down on 2019 but represents an improvement compared to 2020, when full year RPKs were down 65.8% versus 2019.

Airlines 2022 – 01

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18.7%

International passenger demand in 2021 was 75.5% below 2019 levels. Capacity declined 65.3% and load factor fell to 58%

Full-year demand for air cargo increased 6.9% in 2021, compared with 2019, and 18.7% compared with 2020

6.9%

75.5%

6.9%

airlines.iata.org

01/03/2022 08:18

Data (Source: IATA Monthly Statistics)

RPKs recovered to 42% of 2019 levels in 2021

Airlines optimistic about travel recovery

Air cargo remained strong (up 7% vs. 2019), with both domestic and international revenue per kilometers heading northwards

Cargo growth is expected to ease from its record-high but to remain strong and grow over the next 12 months

RPKs & CTKs, % ch. vs. the same month in 2019

Source: IATA Monthly Statistics

20%

Source: IATA Business Confidence Survey (Jan 2022) 100 90

0% Full year 2021 vs. full year 2019: 6.9% -28.2% -58.4% 75.5%

80 70

-20%

60 Weighted score: >50 Improvement =50 no change <50 decrease

-40% 50 40

-60%

30 Global CTKs Domestic RPKs Total RPKs International RPKs

-80%

Dec-21

Oct-21

Nov-21

Sep-21

Jul-21

Aug-21

Jun-21

Apr-21

May-21

Mar-21

Jan-21

Feb-21

Dec-20

Oct-20

Nov-20

Sep-20

Jul-20

Aug-20

Jun-20

Apr-20

May-20

Mar-20

Jan-20

Feb-20

-100%

Passenger volumes Cargo volumes

20 10 0

Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-20 Apr-20 Jul-20 Oct-20 Jan-22

58.4% DOWN ON 2019

2021

150%

In December 2021, cargo rates were almost 150% above 2019 levels

15

2021

World share % of industry RPKs in 2021 Source: IATA Passenger demand recovery continued in 2021 but Omicron having impact

Africa

Asia-Pacific

Europe

Latin America

Middle East

North America

1.9%

27.5%

24.9%

6.5%

6.5%

32.6%

airlines.iata.org

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2022 – 01 Airlines

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CEO Interview

16

Airlines 2022 – 01

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airlines.iata.org

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CEO Interview

Keeping in step for recovery Christine Ourmières-Widener, CEO, TAP Air Portugal says the industry recovery requires all stakeholders to be in alignment.

INTERVIEW BY: GRAHAM NEWTON

C

OVID restrictions in the airline industry worldwide have varied so much that it has been extremely difficult to make concrete plans, but TAP Air Portugal’s CEO believes the airline can go into the summer season with more confidence and positivity.

How difficult has it been to manage day-to-day operations given ever-changing travel restrictions?

It is very difficult because it is an extremely complex situation. The biggest problem, of course, is the unpredictability. We are having new waves, new variants, and the impact is different in every country.

It is impossible for airlines or their customers to plan with any certainty.

One dimension that doesn’t often get mentioned in relation to airlines is the number of staff testing positive and having to selfisolate. Whether it is your ground staff or cabin crew, it can have a huge impact on the service you are able to provide and can have a considerable knock-on effect as you adjust network and schedules.

The European Commission also needs to keep any eye on how well the slot system is working.

Airlines must never be in the position of having airlines.iata.org

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to fly just to maintain a slot. The importance of that cannot be overstated.

17

How has your strategy changed from pre-pandemic aspirations?

There is no denying that TAP Air Portugal is a much smaller airline than it was in 2019. That is a simple fact, and it is the same for most airlines.

Still, at this point in time [January 2022], I think the summer season will be positive. The suggestion is that the evolution of the virus, together with vaccinations, means that we will no longer worry about stop-start operations and airlines will be able to plan with more confidence.

Yet it is essential that airlines remain flexible.

Not all stakeholders can adjust operations or even make decisions at the same pace. There is no point in saying we’ll have this many flights by this date if you don’t have your partners aligned.

Has the pandemic made governments realize the value of aviation or do the on-off travel restrictions show they have yet to understand how the industry operates and its social and economic benefits?

We have been fortunate that the Portuguese Government has supported us 100%. They understood the challenges we faced and have helped us throughout the pandemic.

2022 – 01 Airlines

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CEO Interview

But this is not only about national governments. All industry stakeholders and regulators have a different perspective, different interests, and a different balance sheet. What they think should be done and what they are able to do is extremely varied.

At the same time, other industries are shouting loudly to governments for assistance.

And you also have to remember that airlines have very different business profiles, from low-cost carriers to full-service legacy carriers so their requirements are unique.

So, how governments value aviation is another complexity. There are no easy answers.

What more can aviation do to improve diversity and why is it important?

Diversity and inclusion are always important.

18 These are not issues that have only come to the fore because of staffing problems caused by the pandemic. Everything we put in place should always consider diversity and inclusion.

Airlines must keep engaging with all people.

There is no magic recipe to change the current situation in aviation. You won’t get

“There is lots of room to grow so I am optimistic about the future of our airline and the industry”

2050 IMAGES: ISTOCK/SHUTTERSTOCK

2050 net-zero carbon commitment “We are big players in Brazil and so we take deforestation of the Amazon very seriously. We will continue to support efforts there” Airlines 2022 – 01

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sizeable female representation overnight, for example. It takes time and ensuring you think about diversity in everything you do.

We are seeing more women in aviation, but we are still an exception and there are not as many women as there should be.

For me, it was a challenge to be the only woman in the room. But you build resilience, and you learn to adapt. Most of all, though, you must remember to be yourself.

What more must airline partners do to help airlines achieve the 2050 net-zero carbon commitment?

The industry is making a tremendous effort to be green. But you have to remember that airlines are flying aircraft with engines that we don’t manufacture. We are flying aircraft that we don’t design or build. Nor do we have much say in how airports grow or operate or how air navigation service providers manage the skies.

Our partners are working hard and the improvements airlines need will take a lot of money. But even so, our partners must speed up their agenda. We need to go faster.

Of course, what airlines can do is reduce the weight on an aircraft and there are numerous workplace initiatives we can follow as a company. After all, sustainability isn’t only about the carbon footprint of a flight.

If you look at the United Nations’ Sustainability Goals you will realize that there are many ways to improve sustainability. These goals guide us at TAP Air Portugal. For example, we are big players in Brazil and so we take deforestation of the Amazon very seriously.

We will continue to support efforts there.

What needs to happen to make sustainable aviation fuels commonplace?

SAF are another huge investment and again, this is about ensuring alignment with all industry stakeholders and urging them to match the speed of airline requirements.

Airlines need solutions that are tested and certified. We simply can’t fly on SAF without that airlines.iata.org

28/02/2022 14:53

CEO Interview

approval. So, we have to rely on other people to improve SAF production and availability.

The demand from airlines is definitely there.

pandemic, passengers often want to speak to a human. And it would be hard to deal with the constantly changing requirements through contactless options. Airlines must think about the service they want to provide.

Aside from environmental responsibility, what else do airlines need to do to attract the passenger of the future?

We have to be honest and say that the expectations of passengers are very low at the moment. For them, travel is a painful experience.

What are the rules? What test do they need, how many, what paperwork? And will it all change tomorrow when they are away from home?

At the core of this problem is the way the pandemic is being managed. The first thing we need is consistency in regulations at the global level. Customers want to understand what is required. That is their main concern right now.

And if another crisis emerges, they need to understand how the industry will respond. For now, they view travel processes as a risk. And for many, it is too much of a risk.

In future, that will change, and technology will play an important role. We will need to get to the point where every customer has an individual experience. Their journey will be unique to them and their requirements.

What technologies particularly excite you, whether it is for serving the customer or improving operations?

Artificial Intelligence is interesting in bringing that individual experience but all technologies on the operational side are important too, such as those improving the maintenance of aircraft.

The great thing is that technology brings data as well as improving performance. And that data will help analyses and trend identification and enable airlines to further refine the passenger experience and operations.

Passengers always expect privacy regarding their data, but surveys have alsoo shown they are willing to share that data to get a bespoke experience.

All this doesn’t mean we don’t need humans.

In a difficult situation, such as the current airlines.iata.org

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“One dimension that doesn’t often get mentioned in relation to airlines is the number of staff testing positive and having to self-isolate ...

It can have a considerable knock-on effect as you adjust network and schedules”

Has the value of cargo been realized by airlines and what are the long-term prospects for this sector?

There is no doubt that cargo has a different reputation now. TAP only had a belly cargo business but it became very important, and we are now in the process of converting some passenger aircraft to freighter operations.

Cargo has become a serious revenue stream.

But it is important to consider the long-term prospects and what will happen to yields, the maritime industry, and so forth. That concerns me and we are looking very carefully at forecasts. We all know the industry goes in cycles, so cargo will struggle again. You can’t become too exposed.

19

What do you see the biggest challenges or trends in aviation over the next few years?

For TAP Air Portugal, we need to consolidate our network. We have not yet relaunched all our destinations in Brazil—that will happen in the summer—but our plan is to understand where we are strong and be stronger. There is lots of room to grow so I am optimistic about the future of our airline and the industry.

We are already seeing a lot of consolidation in the industry because it is a risk mitigator in times of crisis. Given what has happened to the industry in the last couple of years, I am sure airlines will continue to look carefully at that. TAP is a member of Star Alliance and that alliance and other codeshares will continue to be important. We are certainly studying opportunities for greater cooperation.

But nothing is certain. All airlines are restructuring, and we need to wait to see what will happen after that. This will become an opportunistic industry and airlines will make market-by-market decisions.

2022 – 01 Airlines

28/02/2022 14:53

Sponsored Feature: FLYR

Alex Mans, Founder and CEO of FLYR Labs

FLYR’s Revenue Operating System helps maximise passenger revenues

Next-generation revenue management and commercial intelligence solutions for today’s airlines

20

Airlines operate in one of the most complex and dynamic environments.

In the current climate, border closures, changing entry requirements, and lastminute passenger bookings and cancellations all take a toll on pricing strategies, with carriers unable to rely upon traditional methods to forecast buying patterns. These are just some of the challenges airlines face while seeking every opportunity to maximize revenue and keep costs under control.

Understanding how different decisions may impact an outcome is crucial to meeting any business objective. Even before the pandemic, adaptability was key for airline strategy, acting

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as the core driver of how FLYR Labs’ Revenue Operating System® was designed. Our aim has always been to help transportation leaders unlock total revenue optimization through ultra-accurate forecasts and a responsive, real-time pricing capability.

The Revenue Operating System® Instead of trying to forecast future events based on recent history alone—which is dependent on year-on-year consistency— FLYR is hyper-focused on context. This makes FLYR the first revenue management provider to dynamically optimize total passenger revenue under even the most complex market conditions.

FLYR’s Revenue Operating System enables airlines to maximize passenger revenues leveraging flight, ancillary, and fare family values. It does this by applying deep learning to manage revenue-optimal pricing decisions and by providing an easy-to-use interface with revenue management performance analytics and user inputs integrated in one place.

By identifying similarities across markets, origins, destinations, flight durations, departure schedules, and competitive pressure, FLYR’s deep learning algorithms identify trends before they are visible to even the best human analysts, even in data-sparse subsets of the airline network. With the right insights readily available and continuously

airlines.iata.org

28/02/2022 14:54

Sponsored Feature: FLYR

“As a true partner to airlines around the world, FLYR unlocks unmatched flexibility and revenue growth to automate businesswide decisions” Alex Mans, Founder and CEO, FLYR Labs

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updated, airline teams can, in real-time, start to resolve complex questions that used to be guesswork.

At FLYR, we’re going beyond revenue management, using our proprietary Cirrus software platform to enable improved performance across all commercial functions, clarifying commercial decisions that touch marketing, scheduling and planning, executive leadership, and air cargo.

Industry-leading revenue management software for every carrier FLYR’s cloud-based platform is configured to serve airlines of all sizes and operating models. Unlike legacy systems, FLYR’s

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solution does not limit start-up, low-cost, or network carriers to point solution capabilities. As a true partner to airlines around the world, FLYR unlocks unmatched flexibility and revenue growth to support and automate businesswide decisions, driving value and growth across pricing, planning, offer, order, and ancillary functions.

The FLYR difference FLYR’s Revenue Operating System includes four critical components: a single repository and unified data model to integrate all airline data, ultra-accurate revenue and load factor forecasts utilizing advanced deep learning AI technology, continuous class-agnostic

pricing algorithms, and end-to-end reporting, analytics, and controls for airline decision-makers.

Offering a fast and risk-free implementation, our system is compatible with airlines’ existing commercial solutions and requires no upfront investment to prove its benefits.

Implementation takes about 12-14 weeks, with no payment required until we see measurable results. Currently, our airline partners are reporting an uplift of about 4% in load factors and a 5-7% increase in revenue.

Visit us at flyrlabs.com for more information.

2022 – 01 Airlines

28/02/2022 14:54

Cybercrime

Taking cybersecurity to the next level Aviation cybercrime is on the increase as new airline systems and remote working increase the digital surface attack area.

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BY GRAHAM NEWTON

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88% of passengers will share immigration information prior to departure for expedited processing

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ombined with imminent cyber regulations in several jurisdictions, having appropriate aviation cybersecurity measures are more important than ever.

The industry faces threats from individual hackers and organized crime, up to statesponsored actors. There are three areas that airlines have to consider: passenger services, operations, and aircraft control.

Passenger services covers everything from the initial booking to identity management and a bespoke travel experience. Fraud, most particularly ticket sales, is the major concern and, in a normal year, costs airlines about $1 billion. But fake refund claims and exploiting airline Frequent Flyer Programs (FFP) have become just as prevalent as credit card crime.

Aside from dealing with fraud, airlines must work hard at securing passenger data. Everything the industry is trying to do to streamline and simplify the air travel experience involves the use of data. Everything collected must be balanced with data ethics and good practice calls for data minimization—only using the data that is needed.

Nevertheless, many of the advances in airport processes, such as biometric facilitation, require passengers to provide important personal details. Privacy laws, such as the European Union’s General Data Protection Regulation (GDPR), set high standards for securing this data and most passengers seem happy to share information where necessary.

The latest IATA Global Passenger Survey found that: 73% of passengers are willing to share their biometric data to improve airport processes (up from 46% in 2019).

88% will share immigration information prior to departure for expedited processing.

Just over a third of passengers (36%) have experienced the use of biometric data when traveling. Of these, 86% were satisfied with the experience.

However, data protection remains a key issue with 56% indicating concern about data breaches. And passengers want clarity on who their data is being shared with (52%) and how it is used/processed (51%).

“Privacy concerns are not unique to aviation but that doesn’t make any difference,” says Manon Gaudet, Assistant Director, Aviation Cybersecurity. “Aviation still has to address them and put cybersecurity measures in place.”

She insists, however, that this is not just about achieving compliance with regulations.

“We don’t want checklist security,” she says.

“Airlines must implement risk-based systems.”

Trust issues

Trust in data exchange is also at the heart of operational cyber issues. Data has to flow across the aviation value chain and that means systems talking to each other and all parties having confidence that the data is protected.

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Cybercrime

56%

1bn

Data protection remains a key issue with 56% indicating concern about data breaches

Fraud, most particularly ticket sales, is the major concern and, in a normal year, costs airlines about $1 billion

But trust is a concept that cannot be mandated by governments. Attaining it is therefore a challenge for the industry, especially as companies of all sizes, not to mention at varying cybersecurity levels, are involved.

Gaudet says that is critical for organizations to share vulnerabilities or fears so that the overall cyber ecosystem can be secured. Sharing knowledge helps prevent future attacks and creates cyber resilience. It means the weakest point in the end-to-end passenger experience can be brought up to a requisite level and keeps all companies ahead of attack trends and developments.

“Remember, attackers do not have trust issues,” says Gaudet. “Not only are they working with artificial intelligence and new techniques but also they offer services to each other to leverage different attack capabilities.”

As for aircraft systems, this is potentially the most serious aspect of cybersecurity efforts.

Aircraft are increasingly connected to the ground and that opens up the possibility of attackers seeking to interfere with aircraft onboard systems including flight critical systems. All cybersecurity strategies must start with securing these.

Cybersecurity strategy

For airlines looking to improve their cybersecurity, Gaudet’s advice is to “get in an expert. Don’t try to figure it out yourself,” she says. “There are lots of different attacks and lots

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of different ways an attack could impact an airline. You have to work through all the different scenarios especially those that could have an impact on safety.”

At the IATA Digital, Data and Retailing Symposium, Martin Ninnemann, Business Development Director at Unisys identified six key elements in implementing a cybersecurity strategy: 1. Cryptographic protocols to ensure end-toend protection of data flows.

2. Virtual Communities of Interest to limit accessibility to the data.

3. Cloaking, so that users can only see the infrastructure that they need to see.

4. Dynamic isolation, which means identifying and shutting down a point of entry, such as a particular PC or server, ideally within seconds not minutes or hours.

5. Integration with identity management systems to facilitate smooth operations.

6. Transparency with applications so that existing proprietary systems can continue as normal.

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All of the above, he suggested, can be done without changing existing architecture. There is no requirement to “rip out and replace.”

Gaudet adds a cybersecurity culture to the list. Fortunately, airlines do not have to create this from scratch. “A safety culture is already omnipresent throughout aviation and cybersecurity is just an extension of this,” she

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Cybercrime

“You can have all the technology in the world, but you must empower staff. Humans are one of airlines’ greatest defence against cyberattacks, but it can also be its weakness, so awareness and training is key”

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says. “It is not about creating a culture in isolation. It is connected to the idea of continuous safety improvement and airlines understand this completely.

“This will give airlines a human firewall,” she adds. “You can have all the technology in the world, but you must empower staff. Humans are one of airlines’ greatest defence against cyberattacks, but it can also be its weakness, so awareness and training is key.”

Passengers want clarity on who their data is being shared with (52%) and how it is used/ processed (51%)

Industry initiatives

To assist airlines, there are a number of industry initiatives underway. A common approach to cybersecurity is essential. Not only will cooperation make the overall information network stronger but also it allows organizations to speak the same cyber language. Terms such as authentication needs to mean the same thing to all companies.

IATA established the Cyber Management Working Group to assess industry needs and provide appropriate guidance.

IATA is also working with the International Coordinating Council of Aerospace Industries Associations on the Aircraft Cyber Security eXchange Restricted FORUM to help airlines better understand the risks associated with the introduction of new technologies and to

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52% 51%

share those concerns with the Original Equipment Manufacturers and Design Approval Holders.

At the ICAO level, the Secretariat Study Group on Cybersecurity and its different subgroups are busy revising the ICAO Cybersecurity Action Plan and the Trust Framework, including new Civil Aviation Secure Overlay requirement. The European Aviation Safety Agency and EUROCAE are also consulting with IATA on new regulations.

“There is no shortage of effort,” concludes Gaudet. “But we need more input from airlines to develop the right guidance so that we can meet the industry’s needs in this critical area.

All aviation organizations must get to a viable minimum level of cybersecurity because a single attack on one critical element could affect the entire industry.

“That doesn’t mean everybody has to implement the latest systems though. It is always about adapting because no airline can do a wholesale replacement of systems every year. The fact is we can never achieve 100% cybersecurity but we can lower the risk and it is essential that we do that. Critical digital systems that are part of the civil aviation infrastructure must be protected as best we can.”

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21/02/2022 16:09

CEO Interview

Restoring the network Peter Ingram, Hawaiian Airlines CEO, says the airline must be able to properly respond to the desire to travel and create a rich experience for Hawaiian’s guests.

INTERVIEW BY: PERRY FLINT

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ith tourism playing an important part of the Hawaiian economy—and a growing portion of Hawaiian Airlines’ business—it is vital that the global network recovers and the airline is not held back by restrictions on international travel.

How would you characterize your 2021 financial results and what do they tell us about the industry recovery?

Last year represented a substantial recovery from 2020 and the depths of the pandemic. At the end of 2020, we got relief from the strict Airlines 2022 – 01

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“By July 2021 we were flying a larger schedule between Hawaii and the mainland than before the pandemic.”

quarantine requirements for folks coming into Hawaii that had been in place for much of the year and that sparked a robust domestic recovery.

By July 2021, we were flying a larger schedule between Hawaii and the mainland than we were before the pandemic, with new routes between Honolulu to Austin, Orlando, and Ontario, California. Our load factor recovered too. There were some ups and down in the back half of the year with Omicron but domestically it was a solid recovery.

To be clear, though, things are not fully back to normal. The part of the network that continues to lag is international. Many of the markets that are important to our network and to Hawaii’s tourism industry, including Japan—which historically has been our largest source of international visitors—South Korea, and New Zealand have not recovered. Japan continues to be held back by restrictions on international travel and stops us from having a full recovery.

But we’re hopeful that in 2022 we’ll move forward to the full restoration of our network as it looked before the pandemic.

How important is international travel to your network?

Before the pandemic, international travel was about 25% of our business and in 2021 it was 90% down. But at the end of last year, we were able to resume flying to Australia, which had been closed since March 2020. We’re currently operating four weekly flights to Sydney. airlines.iata.org

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CEO Interview

“When people have the opportunity to travel, I’m confident they will do so”

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CEO Interview

Hawaii has had tight travel restrictions.

Are the authorities aligned with the need for travel to resume?

What lessons in leadership have you learned from the pandemic?

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A couple of things became clear early on in the crisis. We all want to be analytical and thoughtful about decisions, but it was a real test when we had to make decisions with little or no information. Flexibility and adaptability were key in decision making.

The other thing that was essential for an organization with thousands of employees is communication. What was felt in the executive suite was felt throughout the business and community. You not only have to go out and explain what you know, which is ever-changing, but also express a vision of hope even if the route to recovery is not entirely clear. The team did a great job in recognising the situation and executing on that communication to keep our business moving forward.

When do you anticipate traffic will return to pre-COVID levels?

There are three elements to our network— within Hawaii or neighboring islands, mainland United States, and international.

Flying between the Hawaiian Islands represents about a quarter of our business, and we are on track for recovery. I’m not sure we will get completely back from the pandemic but, in part, that is because we are seeing more point-topoint travel to the islands from the mainland and also because other technologies, such as Zoom, have affected the way in which people connect.

But we should get to about 90% of pre-pandemic levels for our neighbor island network.

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2050

They have a better understanding than ever of how important tourism is to the local economy.

Airlines, hotels, restaurants, retail, and even agriculture—so many parts of the economy are linked to air travel. There is solid alignment now on the thinking to get us back on better economic footing.

Hawaiian is committed to achieving net-zero carbon emissions by 2050 and so much will need to be in place to get us there

Mainland United States is about 50% of the business. As mentioned, that recovered well in 2021 but took a step back because of Omicron.

But as the Omicron wave comes down, we anticipate spring and summer to normalize and even be above 2019 levels.

International travel is going to be a function of the travel policies of countries that are important to us. Australia traffic is recovering but Japan and New Zealand still have restrictive policies and are months away from travel without quarantine. We will see some recovery by summer, but it will be the end of the year before a full recovery.

Importantly, leisure travel will resume its long-term growth trend. The desire to travel has not been deterred by the pandemic. Demand was only constrained by the restrictions placed on achieving that desire.

When people have the opportunity to travel, as we’ve seen from the US mainland to Hawaii, I’m confident they will do so. Visiting Hawaii is not something you can replicate with a Zoom or Teams call. It is not the same experience at all.

You have to come here and feel the surf on your toes and the sun on your back.

Do you think the focus on aviation’s environmental performance will hamper demand going forward?

I am optimistic but also a realist. There is a lot of work ahead of us. Hawaiian is committed to achieving net-zero carbon emissions by 2050 and so much will need to be in place to get us there.

Where my optimism comes from is that as an industry, we have developed technology where each aircraft generation is superior to the prior one in terms of environmental impact. Drop-in sustainable aviation fuels (SAF) work and it is just a matter of creating incentives to build supply up to the point where it is a significant part of uptake.

We are also enthusiastic about aircraft manufacturers working on different propulsion methods, whether it is hydrogen or electric.

I believe the combination of those things, as well as offsets and market measures, will allow us to achieve our goal as an industry. airlines.iata.org

28/02/2022 14:56

CEO Interview

SAF work but what can be done to increase production?

There are things that governments can do to provide the right incentives to fuel producers.

If you look at competing industries for biofuels many of them have more viable pathways to a carbon neutral future. Ground transportation, for example, can switch to battery powered vehicles.

We need to align incentives around tax structures, which is something we, along with partners such as Airlines for America, have been advocating. There could be a blenders tax credit on SAF. California has done a good job at the state level and that has energized production in California. Producers must move more fully into SAF. What are the lessons learned from the recent 5G crisis?

It is a crisis that could have been avoided had there been better communication at the federal level. Fortunately, the problem got rectified before there were massive cancellations. There is a pathway for 5G, but aviation must be able to operate safely, which is possible as solutions continue to be developed by engineers.

There is good cooperation between airframe manufacturers, telecoms, and altimeter manufacturers to understand the risks. And as that continues, we will see viable standards and solutions that will allow 5G to be rolled out to improve broadband in the United States.

The important thing is to preserve and continue to improve aviation’s great safety record. That is the outcome we should all be working towards.

Hawaiian has been quite active in challenging the ticket distribution status quo, including introducing a surcharge on traditional EDIFACTbased transactions. What’s driving that?

It has become clear to us that legacy distribution technology is no longer suitable for the way we market our product and the variety of options that are available in our product.

For several years, we have been more successful in communicating the attributes airlines.iata.org

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25% Before the pandemic, international travel was about 25% of our business and in 2021 it was 90% down

Mainland United States is about 50% of the business. As mentioned, that recovered well in 2021 but took a step back because of Omicron.

2022 “We’re hopeful that in 2022 we’ll move forward to the full restoration of our network as it looked before the pandemic”

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of our products through direct channels, such as our App and website. That’s because there is richer data available through those channels, such as dynamically priced ancillary products.

We want to ensure access to this content is available throughout our distribution. To do so, we needed to transition the technology into an NDC format. We’ve constructed an incentive structure in our distribution agreements to provide richer information to our agents and partners so they can offer customized options to our guests.

Are there other trends or regulations you are watching in 2022?

There are a few things on our radar. We want to encourage the modernization of the air traffic control system. In about 18 months, there is another reauthorization process for the Federal Aviation Administration and that is always an important piece of legislation. We also want to ensure that regulation is sensible and does not constrain our ability to serve our guests with the same Hawaiian hospitality they’ve come to love.

2022 – 01 Airlines

28/02/2022 14:56

Diversity

Unity in diversity 30

Dr. Harpreet A. De Singh was voted Inspirational Role Model at the IATA Diversity & Inclusion Awards.

Graham Newton asks about her own motivations.

F

rom starting out as a pilot in a male-dominated environment, to progressing to become the first female Chief Flight of Safety in India, Harpreet Singh has long been seen as an inspirational role model for women from all walks of life to pursue a career in aviation.

What made you want to be involved in aviation and did your career progress as planned?

I come from an aviation family. My father was in the Indian Air Force, and I was always hearing about planes. Also, I wanted to do something outside my comfort zone.

I joined the NCC (National Cadet Corps) in the early 1980s, which had Army and Air Force-type training. I got my wings, and my passion grew. I wanted to be in the sky. It gave me peace and tranquility. It was more than a profession. I felt it with my heart.

There were just one or two women pilots at that time in domestic Indian Airlines, and it was a big challenge. But generally, people were kind and appreciated my adventurous spirit.

But life is like Snakes and Ladders. One day you are up and the next day you are down. I was

As leaders, we should not view people as male or female but as pure souls

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the first woman pilot selected by Air India, an international airline. I had graduated with honors, so I didn’t just make it but was on high merit. It was even in the media. Unfortunately, I failed a medical test that was not even part of the pilot requirement and I had to resign.

Of course, I was devastated but I treated the setback as if it was just another test. I traveled abroad, got my foreign flying license, and Advanced Ground Instructor license. I got involved in training work and got hired again

by Air India, this time as a pilot instructor.

So, my career grew along a different line. I worked in Operations, Training, Dispatch, and eventually became the first Head of QMS (Quality Management System) DMS, EMS (Environment Management System) and SMS (Safety Management System).

Later, I became the first female Chief of Flight Safety and wherever I took on other jobs, I was always the first woman. I even became an IATA Lead Auditor. I never stopped learning.

Safety became my new passion. Safety and Quality cover all areas of an airline. They are not silos, they cover every aspect of the industry.

That makes it so interesting for me. When I became CEO of Alliance Air, my total 360-degree experience, helped me. It also made me believe in the integrated approach. You have to take time to sit with mechanics, pilots, ground crew and all the others and work as a unified team.

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Diversity

How difficult was it for you to achieve your goals in the industry?

Nothing is difficult if you have proper knowledge of the subject area. That allows you to win people’s confidence and trust.

When you know your subject, it means you are not thought of as a woman but as a colleague. A company only wants good people who can deliver.

What are your plans now to improve diversity in aviation?

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I am the President of the Indian Women’s Pilot Association, now the International Women Professionals in Aviation & Aerospace (IWPA). It gets involved at grass root level with women keen on aviation. It helps with all those little doubts about whether they can do this, and even reaches out to their parents to give them the confidence.

I tell every female Pilot/Engineer that they need to find 50 more Pilots/Engineers and to make them better than themselves. That is being a true leader—someone who wants to create future leaders and make them better.

In India, 15% of airline pilots are women, higher than every other country in the world.

That’s because this is not just about one airline or person, it is a social obligation and IWPA had a mission to do it.

How can IATA’s 25by2025 initiative help?

25by2025 is a great way of getting goals set. At the IWPA, we had a goal and a mission. The point is that all stakeholders must have goals.

But you also have to break down the target into particular segments. An airline can meet the 25%

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Dr. Harpreet A. De Singh, Executive Director, Air India Dr. Harpreet began her career as a pilot, paving the way for women in India to pursue a career in aviation.

She was the first female Chief of Flight Safety and the first female Accident Investigator in lndia, besides being the first female CEO of an airline.

She brought to life the Angels of Air lndia initiative, a humanitarian workforce to provide support in the area of disaster management. She has carried out various social activities and was President of the lndian Women Pilots Association, encouraging women from all walks of life to take up the profession of airline pilot.

objective but what jobs are the women in? We need women as senior managers and in specialized technical functions.

This is not just about women in the workplace, it is about women in the right positions. And women must help other women.

In IATA work groups, we also see more collaboration on diversity. Aviation stakeholders need to help each other because there are similarities in skill sets; everybody could benefit if we encourage greater diversity together.

In general, what does the global industry need to do to improve diversity?

We can do better, especially in certain areas like engineering. You might find female Pilots/ Mechanics but rarely in higher positions. That is why each area must be looked at.

Diversity must also be looked at from the point of view of men. Some airlines use female-only cabin crew. Why is that? Equality is to protect men as well. Everyone should have freedom of choice. And again, if the entire cabin crew is female, it is easy to get to 25%. We must make sure there is zero bias. Any bias is a mental block.

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If you could change one thing in the industry tomorrow, what would it be and why?

We need leadership with pure intentions. As leaders, we should not view people as male or female but as pure souls. If leadership is like that then it flows down throughout the organization.

Remember that besides the Intelligence Quotient (IQ), Emotional Intelligence (EQ) is equally important along with the Pure Soul Quotient (PSQ). You need a balance. Women can bring that and, with PSQ, we can use aviation to make the world a better place.

We must bring fundamental equality—there must be unity in diversity. If you want unity, then you must have diversity first. Aviation connects people and hearts, and we can lead by example.

We have always been multi-dimensional and a global industry and can lead the way.

2022 – 01 Airlines

28/02/2022 14:57

Finance

IATA has an improved payment solution that benefits both customers and airlines.

Graham Newton reports.

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ew technologies and banking deregulation have transformed payment solutions over the past decade. Consumers have become used to a host of user-friendly methods that are both swift and secure.

“On behalf of its airline members, IATA has been watching the development of open banking standards and instant payments with great interest,” says Muhammad Albakri, IATA’s Senior Vice President, Financial Settlement and Distribution Services. “Payment is one of the core value elements of the association and we are always looking to improve our settlement and payments offering.”

Card payment in air transport has always been a complex and expensive proposition.

Airlines had to find partners in every country they operated, negotiate agreements, and then build the necessary technical interfaces.

Because of this, reconciliation in a central back office became extremely complex and process heavy.

And on top of it all were the interchange fees levied by credit card companies, which typically range from 1%-3%. In 2019, those fees alone came to around $10 billion, higher than the cost of distribution.

IATA Pay is designed to respond to these challenges. Initially developed and piloted in partnership with Deutsche Bank for the German and UK markets, IATA Pay is offered as a white-label solution (meaning airlines can brand it as they see fit) that provides consumers and airlines with a solution to pay for tickets and ancillary services through instant bank transfers. Compared with traditional forms of payment, it improves speed and security while also reducing costs.

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IATA Pay moves payments forward

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Finance

Emirates became the launch customer for IATA Pay in 2021, branding it Emirates Pay

93% “IATA Pay does all the heavy lifting for an airline.

Best of all, on average it is some 93% cheaper than a typical credit card transaction”

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For the consumer, the process is simple, secure, and familiar.

When paying for a booking online, airlines signed up for IATA Pay will be able to list it as a payment option. On choosing IATA Pay, the consumer is taken to their personal bank to sign in and approve the transaction. The solution does not keep or transfer any personal information related to the passenger, which remains with the airline.

For airlines, the proposition is equally attractive. They need sign only one agreement with IATA and build one interface. Wherever IATA Pay is available, airlines will be able to offer it. And it provides a reconciliation process with which airlines are already familiar through one-day settlement. In that respect, IATA Pay does all the heavy lifting for an airline. Best of all, on average it is some 93% cheaper than a typical credit card transaction.

“Aviation is a customer-centric industry so IATA Pay wouldn’t work unless the consumer benefited,” says Albakri. “This is the first time IATA has offered a business-to-consumer product. IATA Pay is a service for the industry and its customers.

“And even ignoring the costs involved in building point-to-point interfaces and back-office reconciliation, IATA Pay has the potential to save some $10 billion annually in sales costs. That will go a long way when airlines are struggling.”

Expanding coverage

Emirates became the launch customer for IATA Pay in 2021, branding it Emirates Pay. “Our aim is to provide our customers with choice, convenience, and the best possible experiences at every touchpoint,” says the airline’s Chief Financial Officer, Michael Doersam. “Customers who don’t have a credit card, and those already using direct payments

for other purchases, will welcome the simplicity and security of this method when making travel purchases. When it comes to payments solutions, we’ve always kept close to the latest innovations so that we can offer our customers in different markets the most secure and convenient options.”

Emirates started offering the solution in the United Kingdom and Germany and subsequently extended it to other markets as IATA Pay has become more widely available.

IATA is still adding countries and the solution is now live in a total of 10 locations: Austria, Belgium, Finland, India, Italy, Portugal, Spain, and the Netherlands have joined the early movers. Hong Kong SAR is expected to come online soon and by the end of 2022, IATA anticipates about 20 countries will be accepting the solution.

Emirates has also been joined by Ethiopian Airlines where it is known as ShebaPay. Further ahead, the aim is to continue expanding the coverage of IATA Pay in terms of both airlines and countries. Airlines will likely leverage the flexibility the solution brings and also begin to promote it through specific deals—perhaps lounge access or a discount, for instance.

“The payment sector will continue to evolve,” says Albakri. “Technologies are transforming the world and consumer behavior. Businesses and payment solutions must respond to the change.

“Payments used to be driven by what business needed but it’s different now. Airlines are customer-centric, they have become retailers, and they need to offer customers the opportunity to pay in a manner that suits them.

IATA Pay is a great step forward that is also extremely cost effective for airlines. IATA is committed to continue researching and facilitating solutions that help the industry and the customer.”

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28/02/2022 14:58

Wellbeing W We lllbe bein ing

Ensuring the mental wellbeing of cabin crew As aviation struggles to maintain momentum in its recovery, cabin crew are facing a particularly stressful situation. Graham Newton investigates.

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abin crew may be faced with staying away while health crises erupt, unsure of local rules or potential travel restrictions. Others will have been at home for a prolonged period and have become used to being there for young children or partners, making it a wrench to work away again.

On top of this, the work environment has changed enormously. Procedures have changed, colleagues may have lost their job. All the stresses of a new job are there on an almost daily basis.

A panel at the 2021 Cabin Operations Safety Conference tackled this challenging subject. Panelists included Steve Sneddon, Senior Manager Crew Experience Virgin Atlantic, Kris Major, European Transport Workers Federation, and Sandra Alves Pontes Human Factors Safety Officer, TAP Portugal, with the session chaired by Catherine Chan, Group Safety Manager, Cathay Pacific.

It has always been important to have a confident cabin crew as this confidence transfers to the passengers.

Maintaining that confidence while a global pandemic is raging is easier said than done, however.

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training programs. IATA, for example, has quickly taken onboard the constantly changing situation so that skills are refreshed or updated as necessary.

Listening to air crew and feeding back that knowledge into training has been a key element in this endeavor.

But more important is ensuring the mental wellbeing of cabin crew. Imagine the anxiety of being on furlough, in a lockdown and then having to provide a service within a confined space at 30,000ft. Aircraft have, of course, been proven to be extremely safe environments in terms of virus transmission, but for the individual it is nevertheless a significant adjustment.

“Open digital channels for people to ask questions and raise concerns have been really important,” said Virgin Atlantic’s Sneddon.

Many airlines started or ramped up initiatives to ensure regular transparent communication with crew. Virgin Atlantic, for example, has already trained some crew as mental health first aiders to help colleagues. Cathay Pacific also has more than 50 certified mental health first aiders, Kenya Airways has its Embrace program, and there are many other examples.

In essence, these efforts acknowledge that emotional safety is just as important as other forms of safety. Mental wellbeing should not be a project but a fundamental part of the company culture.

Confidentiality is obviously vital as airlines must give cabin crew the space to voice their concerns. There may be some uncomfortable issues raised and challenges for which there is no obvious solution. But it is important that the parties embark on the journey toward a solution together.

The point, according to Major of the European Transport Workers Federation is that cabin crew should not suffer in silence. Though crew have an array of skills to translate into self-care—after all, they deal with colleagues, border control officials, and passengers on a daily basis—strong support is essential.

Honest, open, adult conversations should be easily accessible, even routine.

In the past two years, cabin crew have had to deal with experiences that nobody anticipated. It seems the next few years will be no less difficult. It is important that the industry acknowledges the difficulties that cabin crew face and provide the correct level of support. airlines.iata.org

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Americas region

Collaborative decisions vital to progress in the Americas 36

Airlines need a seat at the table when Latin American governments discuss aviation-related matters, says Peter Cerdá, IATA’s Regional Vice President for the Americas.

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any countries in the region welcomed a strong recovery in air travel in 2021, especially in domestic traffic. But, Peter Cerdá warned, “that doesn’t mean we can turn back the clock to 2019.

Governments and industry partners cannot go back to old habits. The industry’s recovery will be derailed if we get new taxes, higher costs, and restrictive regulations.”

Consumer protection

Regulations, particularly in the area of consumer protection, could also dampen demand at a crucial period in the recovery.

Cerdá insists that IATA does not question the merit of consumer protection, but airlines need to be able to provide input into the decision-making process. so that rules are justified and respect the complexity of the operating environment.

Brazil has long been the worst offender with its “presumed moral damage,” which essentially turned litigation against airlines into a judicial commodity. Even though the situation has changed somewhat with Brazil accepting the tenets of the Montreal Convention, lawsuits in the country are still at eye-watering levels.

Rules that take little account of airline costs and operating procedures can be seen throughout the region. In Chile, it is now possible to change the name on a ticket for domestic flights. In Argentina, protectionist policies are coming to the fore resulting in new fare bands for domestic travel and a monopoly ground services provider controlled by government.

Sustainability

Cash cows

In 2022, IATA projects a combined loss of $3.7 billion for carriers in Latin America and the Caribbean. This compares with a $500 million deficit in 2019.

Throughout the pandemic, not a single airline in the region received direct financial support from its government. The only relief came from tax and fee deferrals. Unsurprisingly, several airlines went into Chapter 11 and others simply ceased to exist.

Yet, just as the recovery in air travel gains momentum, there are multiple examples of governments and stakeholders in the aviation value chain looking to resume their exploitation of airlines as cash cows.

“Instead of encouraging travel and tourism, these measures will have the opposite effect,” says Cerdá.

Another area that needs fresh thinking from governments is sustainability, most notably in the area of sustainable aviation fuels (SAF).

Even though the industry, including all the IATA members based in Latin America and the Caribbean, has committed to a net-zero carbon emissions target by 2050, there are no regular, scheduled flights taking off from the region that use a SAF blend. And there is no significant infrastructure in place that makes it a likely prospect in the short term.

“Again, we have to get governments on board and explain why SAF are so vital to the industry’s future,” says Cerdá. “They need to build the right infrastructure and support production and distribution through carefully targeted incentives. There is a unique opportunity in this region to be a major SAF supplier.”

Certainly, the demand will be there. Aside airlines.iata.org

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Americas region

“We have to get governments on board and explain why SAF are so vital to the industry’s future” Peter Cerdá, IATA’s Regional Vice President for the Americas

from the industry target, Aeromexico, Azul, GOL, and LATAM are among the airlines that are determined to meet self-imposed, challenging sustainability goals.

IMAGES: ISTOCK

Viable transport

Cerdá points out that the social and economic benefits of aviation should spur on governments in the region. Pre-pandemic, the industry supported $1.29 trillion in GDP and 16.4 million jobs across the continent. Air transport was also vital during the crisis, repatriating citizens and flying in vital medicines and equipment.

Not only this, but aviation is also the sole viable transportation mode for intra-regional connectivity. Highways are scarce in the region and the same goes for rail. Countries are large and long with the Andes forming a formidable barrier. Air travel is a safe, reliable, cost-effective, and relatively quick form of transport.

The importance of this can be seen in the changing nature of regional networks. In countries including Chile, Mexico, and Colombia, most traffic was funneled through the key hubs. That trend is now fast disappearing as airlines.iata.org

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Taxation of the airline industry In Suriname, the sales tax increased from 8% to 12% with a rise in the airport facility fee also expected Argentina added an additional tax on all international tickets sold locally in Pesos and increased the international departure tax Mexico City’s airport use fee is increasing 6% for domestic and international flights Costa Rican fees have gone up 7% Saint Martin is proposing to convert the current mandatory COVID-19 insurance for tourists of $30 into a permanent charge

point-to-point connectivity to secondary and tertiary cities take hold. Alongside this, there is a need to ensure that the required airport infrastructure is provided at reasonable costs so that the industry is ready to accommodate the projected post-pandemic growth. The issue is most acute in Lima, along with Bogota and Mexico City.

Overall, attitudes toward aviation vary greatly. Business-friendly environments exist in such countries as Barbados, Ecuador, Honduras, Mexico, and Panama. Mexico, for example, never closed down air travel and domestic figures for 2021 surpassed 2019. In contrast, the current government in Argentina is planning to roll back the aviation deregulation introduced by its predecessor.

More recent elections in several countries across the region have followed a similar trend in bringing about a shift from open market politics to more restrictive business policies.

In 2022, elections in Brazil and Colombia could well affect the future of regional aviation.

“Aviation has to be high on the regional agenda,” concludes Cerdá. “There is a strong interest in intra-regional connectivity and in Latin America and the Caribbean from all other regions. Domestic numbers will likely reach 2019 levels in 2022 and international traffic is expected to reach pre-pandemic levels in 2024, earlier in some key markets. Clearly, the demand is there.

“But 2019 traffic numbers cannot be the metric we aspire to. We do not want an industry that makes a loss or airlines that cannot compete in a fair and transparent manner.

Smarter regulation and a keen eye on costs will help airlines resume their vital role in social and economic development. If we work together, we can ensure the region is competitive in the new, post-COVID world.”

Building a Sustainable Future Together, the IATA Wings of Change Americas event, will be held in Santiago, Chile on April 6-7.

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IATA Opinion: Marie Owens Thomsen

Aviation and global economics Marie Owens Thomsen, IATA’s new Chief Economist, tells Chris Goater that airline business models must evolve to meet the new normal.

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ighlighting aviation's role in the global economy is now the job of IATA's new Chief Economist, Marie Owens Thomsen. Confronting new challenges is paramount to help the industry evolve its business models and drive profits.

What attracted you to the economics of the airline sector?

Throughout economic history, trade, mobility, and connectivity have been fundamental drivers of a sustainable and inclusive global economy with improved economic outcomes for all.

The advent of civil aviation played a key role in the spectacular progress the world experienced in the 20th century. Now, we are confronting two systemic and unprecedented challenges: climate change and the COVID-19 pandemic. We have seen the damage done to connectivity, supply chains, and inclusivity. I can only conclude that our collective future economic success depends upon allowing aviation to realize its full potential.

ILLUSTRATION: SAM KERR

What are key financial trends to look out for in the near term?

One major consequence of the pandemic is that world debt has risen to historic highs. Governments’ finances will continue to be strained by the need to build greater resilience in our economies and to finance the transition to a sustainable growth model. This is likely to lead to higher taxes.

We are already experiencing spikes in prices, and this will probably be an intermittent feature of our economy going forward. Commodity prices and notably those necessary for the energy transition will grind higher. Nominal interest rates will have to rise, though real interest rates can be expected to remain Airlines 2022 – 01

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low for a prolonged period, as was the case after the Second World War, a period similarly characterized by high levels of debt.

The 21st century is facing unprecedented and turbulent global challenges. The blue skies we can perceive on the horizon relate to energy transition and the lure of energy abundance. We have arguably gone as far as we can today in our energy-constrained world. Just imagine what we could achieve if energy were sustainable, abundant, cheap, and accessible to all.

What are the longer-term economic challenges facing aviation?

The most fundamental challenge for airlines and the industry is to evolve the structure of the sector and the individual business models to allow its members to deliver regular profits.

It is astonishing that we have a systemically important sector, aviation, in our global economy that is organized in such a way as to make this very difficult. Clearly, business models are already evolving. Airports are turning into retail venues, airlines lease rather than own aircraft, and airlines’ loyalty programs are akin to financial institutions. Our aim in IATA Economics is to shed light on all these, and more, such fundamental developments.

Which particular data and analysis produced by the IATA economics team is most useful for our members’ planning?

Our most popular output are the passenger and cargo forecasts.

Airlines’ financial performance is also a staple output. We will strive to add depth and breadth to these over time, to provide insights into our industry not only through the business cycle but also including the longer-term structural issues affecting the sector and its role in the global economy. airlines.iata.org

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