IATA Global Airport and Passenger Symposium Day 1 October 2018

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Issue 01: Tuesday 2 October 2018

Airlines.

Global Airport and Passenger Symposium

October 2 - October 4, 2018 | Athens, Greece

Welcome!

Airlines power economies, connect cultures, and bring together friends and family. To deliver these benefits, airlines and airports must continue to innovate and provide the services the modern passenger requires.

ISSUE 01

GAPS will discuss the important trends, challenges, and opportunities in passenger services, from new airports and aircraft to data and biometrics.

A valuable guide in our efforts to innovate is the IATA Global Passenger Survey, an annual questionnaire that allows the industry to fully understand passenger thinking on a number of key issues. The Thought Leadership panel that follows the announcement of the GPS results is sure to be a highlight of Day One and inform the context for more detailed discussions on Day Two. Fortunately, we are already seeing great ideas.

Baggage is benefitting from Resolution 753— which requires airlines to track each item of checked baggage at key points in the journey.

Robotics and advanced baggage systems are

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gaining in prominence, some of which are developing to be bag rather than flight-centric.

Meanwhile, the New Experience Travel Technologies (NEXTT) program—a collaboration between IATA and Airports Council International (ACI)—will bring fresh thinking to many other aspects of operations.

As will the IATA StartUp Innovation Awards, designed to ignite new ideas across the industry. On Thursday, the finalists will present their innovative ideas for delegates to vote for the winner.

Enjoy the conference. It is sure to be an exciting and informative few days.

“Robotics and advanced baggage systems are gaining in prominence, some of which are developing to be bag rather than flight-centric.”

Nick Careen, IATA Senior Vice President, Airport, Passenger, Cargo and Security

Nick Careen, IATA Senior Vice President, Airport, Passenger, Cargo and Security

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Tuesday 2 October 2018: Issue 01

“Technology needs to be well guided. We need to build more collaborative relationships with governments and regulators.”

Michael O'Connell, NEC Europe Vice President

AVSEC World Day: The future of aviation security

3 AVSEC World Day discussed the various risks prevalent in the industry, from the threat of the insider to conflict zones.

The event was opened by Dimitris Avramopoulos, Commissioner for Migration, Home Affairs and Citizenship, European Commission, who noted in his keynote speech that the entire aviation value chain has a role to play in keeping the industry safe as threats to aviation will not go away.

A session looking ahead to 2030 examined how these threats will determine the future framework of aviation security.

For passengers, aviation security means the checkpoint. By 2030, it is expected that the better use of data and new technologies and processes will all be involved in mitigating much of the checkpoint stress endured today.

Risk assessments will be carried out in advance, and screening technologies will be more discrete and possibly decentralized, happening at gates or along corridors rather than in a central location.

But to achieve these goals, high-level changes have to be made. Michael

O’Connell, Vice President, NEC Europe, said he believed that the foundations for aviation security in 2030 are already in place, but there are issues to be resolved.

“Technology needs to be well guided,” he said. “We need to build more collaborative relationships with governments and regulators.”

That relationship needs to determine the standards needed for relevant and successful product design, with O’Connell citing facial recognition as an area that would benefit from a more coherent structure.

How technology is applied will be equally crucial. The industry will need to facilitate the movement of some 7 billion passengers by 2030.

To cope with this demand, and given limited infrastructure development, the trend is to move airport processes off-site.

Technologies will need to adapt to new environments and data shared along the entire journey.

Though the increasing use of data and technology brings new cyber threats, Patricia Cogswell, Deputy Administrator, US

Transportation Security Administration, stressed that existing threats will not go away. People will still try to smuggle a gun or knife onboard, she suggested.

An integrated, risk management approach is therefore essential, capable of dealing with known risks as well as emerging threats.

New algorithms will be needed for new areas of concern.

Referencing the Seattle-Tacoma airport incident, where a security-cleared individual stole and crashed an aircraft, Cogswell noted that dealing with the insider threat is one example of an area that is ripe for security enhancements.

Rich Davis, Managing Director, Global Security, United Airlines, meanwhile, asked what driverless cars might mean to airport security design or how surgically-implanted explosive devices might be detected.

He concluded that customers in 2030 may still not be entirely happy with security processes and requirements, but agreed that collaboration was the best way forward.

“Everybody has a role to play in protecting airlines, airports, and passengers,” he said.

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Issue 01: Tuesday 2 October 2018

AVSEC round-up

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Tuesday 2 October 2018: Issue 01

Welcome reception

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Issue 01: Tuesday 2 October 2018

The future of the inflight experience

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Day 2 14.00

Ursula Silling, CEO, XXL Solutions says that the fundamental parts of the inflight experience that are still seen today have been in place for decades and are quite isolated from progress in the rest of the customer journey.

“The customer has been a passive recipient and basically anonymous,” she says.

Seat back entertainment is a prime example. It is an experience that could be transformed now that customers often carry their own devices when flying.

“If they do not have a tablet or laptop, they would need the possibility to hire them on board,” says Silling. “And they need adequate charging options, and the potential to borrow or rent a charging cable in case they forgot theirs.

There needs to be a smart way of being able to fix

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“There needs to be a smart way of being able to fix a device on the seat to have the best viewing angle, and to leave some space on the table for drinks and meals.”

Ursula Silling, XXL Solutions CEO

a device on the seat to have the best viewing angle, and to leave some space on the table for drinks and meals.”

But customer expectations must be managed as connectivity bandwidth is still restricted, partly due to technology constrictions, but also because of regulatory reasons.

There is also a business consideration.

Some airlines offer inflight connectivity and entertainment for free but charge for Wi-Fi, while others offer completely free options, but with limited consumption.

Free text messaging is a trend which has lately been adopted by a lot of airlines as it requires less bandwidth.

As airlines continue to work towards improving the inflight experience, Silling says that having a better understanding of the customer is essential. She explains that knowing exactly what customers are looking for, how they make buying decisions, and what drives satisfaction and retention make all the difference. Despite having an abundance of data available to them, airlines have traditionally been very poor at addressing this.

The XXL Solutions CEO believes airlines need to reconsider their role and adopt digital technology to open up the customer experience holistically by involving the airport and other third parties in the aviation value chain in their considerations.

“Retailing can become really powerful if airlines adjust their ancillary approach,” Silling concludes. “They could differentiate by becoming known for always having interesting products, building on the latest trends or limited editions with extra value instead of only selling the same perfume that customers can find easily anywhere else.”

Tuesday 2 October 2018: Issue 01

Limiting the downside

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A financially robust industry is a necessary platform for investment in passenger services and the travel experience.

Fortunately, aviation’s financial performance continues to improve. Although the cost of capital is rising, along with fuel prices, the industry is still expected to post a positive return in 2018. Investors in the business are continuing to see a return on their money. The good news must be tempered by regional differences, however. North American and European carriers are, in general, generating a healthy free cash flow but airlines in the rest of the world are finding spare cash more difficult to come by.

“As a result, these regions are still vulnerable to shocks,” says Brian Pearce, Chief Economist at IATA. The main challenge for all airlines is the inexorable rise of fuel and labor costs, which are

pushing unit costs higher than unit revenues.

Fuel has reached approximately $90 a barrel, close to 50% higher than 12 months ago.

The light on the horizon, however, is the trend toward an unbundled product. Though seat prices remain commoditized with base fares declining in real terms, ancillary revenues are growing.

Airlines have also vastly improved asset utilization and capacity control, resulting in a load factor well above the breakeven point.

“Airlines’ financial performance continues to be much better in relation to economic growth than in previous cycles,” Pearce concludes.

“This suggests that the industry has changed and that there have been some structural improvements that will limit the downside to profitability in a more difficult business environment.”

“Airlines' financial results continues to be much better in relation to economic growth than in previous cycles” Brian Pearce, IATA Chief Economist

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Issue 01: Tuesday 2 October 2018

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