Pierre Jeanniot delivers the keynote address to the APG World Connect Conference in Montreal

The Role of Boards in State Aviation Enterprises
Keynote Address to the APG World Connect Conference
Montréal, October 15, 2012  >>


Distinguished participants:

The socio-economic contribution of the aviation industry is very important to all countries.

For aviation to be truly successful, the government needs to be a strong partner, and each aviation related organization – whether an airline, an airport, an air navigation services provider, or a regulatory agency – must share in this quest for success.

There is, at this time, a particular need for every aviation-related organization to understand the forces reshaping the aviation world in order to decide how best to reposition itself in this changing environment.

This has increased the responsibility – and the urgency – for those involved in the governance process to carry out a strategic direction review of their respective organizations.


We will recall that in December 1944, at the Chicago Convention, the International Civil Aviation Organization – ICAO – was created as an agency of the United Nations to oversee the orderly evolution of international aviation.

A few months later, in April 1945, the same participants at the Chicago Convention created IATA – the International Air Transport Association – to provide standards and guidance for the development of operational and commercial activities of the airlines.

With very few exceptions – essentially in the United States, where TWA (Trans World Airlines) and Pan American were privately owned – everywhere else in the world, every company and organization involved in aviation was controlled and operated by a State.

Governments controlled, owned, operated and regulated every facet of the commercial aviation activity including flight frequencies, capacity and the price of the product being offered by the airlines.

The paralyzing weight of bureaucratic aviation regulations – and increasing consumer pressure – led in the late 1970’s to a major change in the attitude of the United States vis-à-vis its commercial aviation.

In a bold move, the Carter Administration decided to disband most – if not all – of its commercial aviation regulatory oversight, thus opening its air transport industry to unrestricted market forces.

As one would expect, this caused a major upheaval, and the change was, of course, most disruptive to the established carriers.

Some airlines disappeared, unable to adapt; others restructured extensively, adapted, and became stronger.

With many of the regulatory entry barriers eliminated, numerous new airlines were able to emerge.

Most were based on a new “low cost” business model.

Unfortunately, many of those new carriers expanded too quickly, and were unable to survive when the next downturn of the economy occurred at the end of the ‘80s.

But as we know, the “low cost” concept survived, was re-launched a few years later, and now flourishes in every region of the globe.

Stimulated by the new opportunities, the market reacted with vigor and expanded rapidly.

With greater choice – and extensive price competition – the consumers were the clear winners!

The U.S. experiment was closely watched by other countries and regions.

And based on the conclusion that there was much more to gain than to lose, many States have followed the same path – but admittedly in a more gradual way.

Canada, for instance, deregulated its domestic market during the second half of the 1980s.

Previously considered as a highly regulated and quasi essential service, aviation is now – in most parts of the globe – regarded as a consumer product, largely driven by market forces.

Beyond the domestic air markets, liberalization has also progressed steadily on the international scene with the emergence of a number of common air markets such as within the European Community, as well as some regions in Asia, Africa and Latin America.

“Open Skies” style air bilateral agreements – launched originally at the initiative of the U.S.A. – have greatly increased opportunities to expand the market internationally.

Canada and the U.S.A., for example, reached an Open Skies Agreement some fifteen years ago – and air traffic between the two countries increased by some 27 percent in the following two years.

Exposing airlines to full and unrestricted market forces has resulted in a highly significant re-shaping of the airline industry.

Many “national” airlines have disappeared.

A number of previously “national” airlines have merged and restructured to create a more viable regional entity.

Typical of those in Europe are the Air France/KLM Group, the Lufthansa Group, and the International Airline Group – I.A.G. – of British Airways and Iberia.

A new breed of “national” airlines has emerged, typically from the Gulf States which have identified aviation as a strategic industry.

The new airlines, based on the so-called “low-cost business model “, have now firmly established a significant market presence in every region of the world.

Although prevented from merging across borders by foreign ownership restrictions, many “traditional carriers” have regrouped in alliances, and have also been permitted to operate joint ventures in specific markets.


Unaccustomed, and uncomfortable, in dealing with such fiercely competitive situations, States have found it very difficult – if not totally uneconomic – to continue to own and operate airlines.

Yet abandoning its own flag carrier has been a decision extremely difficult for many States to accept.

It can be an emotional subject – and a matter of “national pride”.

To postpone what is all too often unavoidable, a government may choose to continue to pour money into an airline to compensate for its mounting operating losses, hoping that somehow it may eventually turn around.

But without massive restructuring – read massive layoffs – and numerous other painful retrenchments equally politically unacceptable, continuing to support financially an inefficient and uncompetitive national airline at huge cost to the taxpayer may simply prolong the agony.

The demise of SABENA and ALITALIA are prime examples, and unfortunately the current situation of Air India appears to be following the same path.

Privatizing a national airline requires not only a management group willing to take – and live with – tough decisions. It also needs the support of a fully committed government.

The labor unions are usually strongly opposed – for obvious reasons – and the public in general is concerned about the loss of services.

For Air Canada, the decision by the Canadian government to deregulate air transport in Canada -and allow unrestricted competition – made it essential for the corporation to become privatized to be able to react quickly to rapidly changing market conditions, and to access much needed private capital.

More specifically, and as an example of the many aspects to consider in the case of the privatization of Air Canada – which I piloted –

• All labor contracts were re-negotiated to remove inefficiencies and improve productivity;

• There was a need to achieve a significant reduction in headcount and identify a number of services and functions which would be more economical to outsource;

• A number of uneconomic international and domestic services needed to be terminated, and we needed to find a way to deal with rather strong objections from the communities affected;

• In the case of the domestic services discontinued, we created a number of regional airlines which could provide adequate service at much lower cost;

• To reassure the smaller communities affected, a program of subsidies was put in place to ensure continuity of service;

• All the obligations of the corporation which had benefited from government guarantees had to be re-negotiated;

• An extensive employee and public communications program was carried out to explain – and reassure.

The successful privatization of Air Canada served as an example, and paved the way for other State corporations to become privatized.

Despite the obvious socio-political and economic difficulties which need to be overcome, the privatization of State-owned airlines has continued to progress – and in some cases accelerated.

During my term as Director General of IATA, we set up a few seminars to assist airlines in this difficult process.

The pressure to have the State “step back” from the ownership and operation in air transport activities is not limited to airlines.

The presence of private investment in other major elements of the air transport industry – such as airports and air navigation services – has also been growing.

Private capital seeks new investments in what had previously been regarded the restricted domain of States.

Additionally, a number of governments are anxious to reduce their deficits and have welcomed private investment, which would enable them to shift spending to other needs – for instance social.

This does not mean at all the end of the State presence in the field of air transportation.

While the State may reduce its intervention in the ownership and operational aspects of aviation, it should refocus its efforts in other areas.

Governments should shift towards becoming “referees”, setting the rules of the game to promote competitiveness and ensure, among other things, safety and security as well as public trust.


In any enterprise, regardless of the type or its nature, the role of a Board member is to represent the shareholders, and to ensure that the business is managed in the best interests of those shareholders.

In private enterprise, a very key role of the Board is to select and appoint the CEO – and, of course, to periodically evaluate the performance of the CEO.

In State-controlled companies, the choice of the CEO may – or may not – uniquely involve the Board.

In any event, the governance process needs to provide general oversight to ensure that the business is managed efficiently and in line with the mandate given to the CEO.

In aviation-related enterprises, one would have to add that the concerns for safety and security, as well as the issue of environmental impact, should also be subjects for Board discussion and oversight.

For any State-owned and operated enterprise, the Board probably has an even greater responsibility to minimize “reputational risk”.

It must ensure that the entity is well regarded by the public and avoids any controversial situation – particularly any which could cause embarrassment to the shareholders.

State-controlled entities are, by their very nature, rather risk adverse. The decision making process is very slow and requires many checks and balances.

Following established procedures is often more important than the results.

And yet, facing up to commercial challenges requires taking a certain amount of risk to manage the necessary change, as well as react quickly to a changing market and competitive environment.

Together with management, the governance process must come to grips with the transformations required to best position the enterprise in its need to respond to the challenges – and opportunities.

This may call for:

• Reviewing and redefining the mission/mandate;

• Setting some new objectives;

• Re-assessing the re-affirming the values;

all of which would be necessary to provide appropriate guidance to the development of a new strategic plan.

But, of course, this new mission, new objectives and new strategic plan cannot be developed without the participation – and agreement – of the shareholders.

And here, in my view, lies an important role for the governance process.

There is a need to encourage the government to develop or adapt its aviation policies in response to the changing economic and competitive environment – a role of liaison between the management and the State to ensure mutual understanding of the challenges being faced, and the socio-political-economic implications of the changes being contemplated.


The socio-economic impact of air transport is simply huge on any country, region, and indeed the world.

A recent study carried out by Oxford Economics clearly demonstrated the economic and social benefits of aviation at the national level.

This study involved over 50 countries, and concluded that when the air transport industry was encouraged to grow efficiently – in response to the demands of the expanding market – the economic impact was very substantial.

But achieving those substantial benefits could only be obtained if:

• The proper investments are made to support efficient growth – either by the State making the investment, or by encouraging private interests to meet the requirements;

• Taxes and levies of all kinds are kept at a just minimum ;

• Monopoly suppliers are efficiently regulated, with proper incentives to strive for better productivity.

This, incidentally, is one of the major areas of IATA activity on behalf of the airlines of course, but equally of interest to the air traveler who ultimately will bear the brunt of the additional costs.

Concluding Remarks

• The demand for air transport – under market forces – has been expanding and will continue to expand;

• The demand for investment in air transport – required to meet adequately that demand – has been growing and needs to be met if the benefits are to be realized.

• The State is likely to depend increasingly on private investment to fund the growth in aviation and its required infrastructure.

• The various actors of the aviation industry increasingly need to respond to commercial/business criteria, and in that context the role of the State in the air transport industry is being challenged and needs to be redefined.

• Given the huge socio-economic benefits generated by air transport, the State must act to encourage this growth, and develop an appropriate and comprehensive aviation policy – balancing, as the need may be, the various socio, political economic considerations.

At the end of the day, one must deal with the realities of each case.

Government is also about the “art of compromise”.

In this period of transition, what role should be played by the governance process assisting States in developing a new vision – and a new government policy? More specifically

• What part of air transport should be largely, if not totally driven by the market?

• What safeguards, if any, are required?

• What should remain state-owned, and why?

• Under what conditions would a public-private partnership be desirable?

Can appropriate conditions be developed to satisfy both the public requirements – and the private expectations?


These are a few of the decisions being faced by those involved in the governance process.

But in closing, the fundamental question really is:

• In this period of transition, where should the frontier lie between the State – and the market?

Thank you!

Pierre Jeanniot is inducted into the Canadian Aviation Hall of Fame

Acceptance Speech
Canadian Aviation Hall of Fame Gala Evening
Montréal, June 14, 2012  >>


Monsieur Le Président, Mr. Chairman of the Canadian Aviation Hall of Fame, Tom Appleton, distinguished inductees past and present, mesdames, messieurs, ladies and gentlemen.

First and foremost, I wish to express my most sincere gratitude to the Board and to the Selection Committee of the Aviation Hall of Fame for this prestigious honor.

Je suis extrêmement touché par ce geste de reconnaissance que je me dois partager avec tous ceux et celles qui m’ont secondé au cours de tant d’années.

I have been most fortunate during my years at Air Canada, as well as at IATA, the International Air Transport Association, to have enjoyed the support of many extremely competent and dedicated aviation professionals. And I think that I can state categorically that without the invaluable involvement of those competent and dedicated people, the significant contribution attributed to me would not have been achieved!


Many of the Air Canada Executive team who worked with me at that time are here tonight. I am deeply honored and touched by their presence.

J’ai passé quelques trente ans au service d’Air Canada et je crois sincèrement qu’en dépit de l’importance médiatique que l’on a accordé à la fameuse « Boîte Noire » la contribution à Air Canada, que je considère avoir été la plus importante été la privatisation d’Air Canada.

Le gouvernement conservateur de Brian Mulroney ayant décidée de libéraliser totalement le marché aérien la position d’Air Canada, société d’état, devenait insoutenable. Sans l’ouverture de l’actionnariat notre ligne aérienne était vouée à l’asphyxie.

Le Ministre du Transport à l’époque, Don Mazankowski, comprenait bien la situation mais par contre dans sa situation actuelle la société Air Canada n’était pas privatisable.

Don Mazankowski me dit textuellement «Pierre, lorsque tu auras fait les changements nécessaires afin qu’Air Canada soit privatisable,le gouvernement la privatisera mais ne fais pas trop de vagues !»

Après avoir remplacé Air Canada par une ligne régionale dans une bonne douzaine de villes Canadiennes malgré l’opposition unanime des chambres de commerces et des députés locaux.

Après avoir renégocier les conditions de travail de tous les employés et subit trois grèves importantes et quelques boycotts les vagues ressemblaient plutôt un Tsunami! Je dois dire que j’ai quand même eu droit à certains égards de quelque syndicat.

Lors d’une des diverses démonstrations je me rappelle avoir vu un placard qui disait «Brian, débarrasse nous de Jeanniot – envoyé le au Senat!»

Je devais sans doute avoir besoin de repos!


I have been given credit for Air Canada pioneering wide-body, twin-engine operations over the Atlantic. And credit for ACARS, and in particular the first data link over the Atlantic enabling flight information to be transmitted electronically and automatically.

But much of that credit is due to the very excellent leadership of our technical and operations group, and particularly Captain Charlie Simpson ,then Head of Flight Operations, and who I am very pleased to say is here today.

Charlie is also famous for having shattered the “glass ceiling” – or should I call it the “Glass Cockpit” – in pilot recruiting. He hired the first group of female pilots, a group of twelve who were immediately labeled in Air Canada, “Charlie’s Angels”.


Although this may not seem like a significant aviation contribution, the introduction of the first ever non-smoking flights on a commercial airline turned out to be a bit of a landmark.

I took the decision – despite the strong negative recommendation of our Commercial Department who, by coincidence, were mostly smokers . The threatened, rather vocal boycott by the entire tobacco industry – growers, manufacturers, distributors – gave us tremendous free publicity, and we gained approximately five percent in market share on the Montreal-Toronto corridor.

We were still at the time a Crown Corporation, and the Federal government decided to take some credit for the results and progressively extended the smoking ban to all domestic flights. As far as influencing worldwide the non-smoking movement, the rest is history.


L’aviation internationale est un domaine qui vit beaucoup trop fréquemment en état de crise. Et l’Association du Transport Aérien, l’IATA, se trouve à fortiori au cœur de toutes ces crises. Il nous incombe de proposer ou en l’occurrence de prendre toutes actions possibles afin de minimiser les conséquences négatives sur le transport aérien. Les crises financières, es crises du pétrole, les conflits militaires tel que la guerre du Golfe – toutes ces crises ont requis des actions ponctuelles … et énergiques.

La plus spectaculaire aura sans doute été la gestion de l’importante crise résultant du malheureusement célèbre 11 septembre 2001 – the infamous 9/11 – qui a littéralement paralysé le transport aérien pendant près d’une semaine.

However, I believe that the most important achievement of IATA during my tenure was to convince the association to adopt safety as its first and foremost objective.

The support of ICAO was simply invaluable, and I would like to acknowledge the support of my good friend, Dr. Assad Kotaite, President Emeritus of ICAO. And we are very much honored by his presence tonight.

And in the context of reducing the aircraft accident, it was necessary to:
• conduct a detailed analysis of the different types and causes of aircraft accidents
• establish and set in motion industry-wide programs to address these various causes
• and accept the challenge of decreasing the industry’s accident rate by half over ten years.

Finally, we proposed that all international airlines should adopt the practice of periodically having carried out safety audits by external experts in a similar way that everyone calls on external financial auditors for their financial reporting.

I would like to pay credit to the technical Operations and Infrastructure Group of IATA led by its Senior Vice President, Gunter Matschnigg, for his highly successful efforts in fully achieving these demanding objectives, namely:
• 50 percent reduction in the accident rate in the following ten years
• and implementing IOSA, the IATA Operations and Safety Accreditation Program, which is now required to maintain membership in IATA.

Mes dix ans à l’IATA m’ont appris jusqu’à quel point les gouvernements, mis à part ceux du Golfe Persique, traitent l’industrie du transport aérien comme « une vache à lait ».

Taxes, levies, charges of all kinds unduly penalize air travelers and the airlines worldwide, to the detriment of the profitable growth of our industry.

In many countries, obsolete rules and processes create a bureaucratic and costly nightmare for aviation.

I recall that one day in India – attempting to illustrate their idiosyncrasies affecting aviation – the Deputy Minister for Transport smiled and said to me with some humor “you must remember, Mr. Jeanniot, we in India inherited our bureaucracy from the British – and we perfected it!”

Cette expérience internationale de quelque dix années durant laquelle j’ai souvent affronté des juridictions bizarres et franchement Byzantine m’ont fait apprécier d’autant plus le Canada.

Je me rappelle d’avoir fait éclater de rire le premier ministre Jean Chrétien, auquel j’avais déclaré que depuis que j’avais eu à travailler avec la bureaucratie Européenne de Bruxelles, je commençais à regretter celle d’Ottawa.


Mr. Chairman, I am afraid that I have exceeded my allotted time and I do plea for your kind indulgence. Once again, many thanks for this great honor.

Mesdames, messieurs, chers confrères et consœurs de l’aviation, de nouveau je tiens à vous redire combien je suis reconnaissant de l’honneur que vous me fait ce soir.

J’en suis profondément touché – merci infiniment!

State of the Industry – The Game Changers

State of the Industry – The Game Changers
Keynote address to APG World Connect
Singapore, November 3, 2011  >>


Ladies and gentlemen, Singapore is a great place to meet!

Singapore has been an acknowledged leader among those south-east Asian Tigers which blazed the way for the explosive economic growth this region is today enjoying. It is an appropriate back-drop for an exciting commercial aviation meeting. A meeting which, in the Jean-Louis Baroux tradition, will ensure that the resulting intellectual stimulation will be matched by its epicurean content.

But first, a brief disclaimer. Let me say at the outset that the views expressed here are strictly my own, and do not represent the views of IATA or any other corporation I have been associated with over the years.


I believe it is fair to say that Singapore is very much a symbol of the changing landscape of aviation. Singapore created the first major international aviation hub in the Asia-Pacific region. This model has since, in some ways been emulated by the Gulf States. Having much to gain and nothing to lose, Singapore was an early promoter of “Open Skies” air bi-laterals which have been spreading throughout this region and all other parts of the world. Among the more recent such development was the Agreement ratified between the United States and the European Community – with Canada joining in – virtually creating an Open Skies condition between North America and the European Community. Among the more important changes in government policies with a significant impact on our industry, was the decision last year by the U.S. and the E.U. to grant anti-trust immunity to some of the key members of the three alliances over the Atlantic. This anti-trust immunity is allowing them to operate in what is now referred to as a “Metal Neutral” formation. This “Metal Neutral” Anti-trust Immunity is a close substitute to a merger, allowing the key members of each alliance full coordination of the major airline functions on the designated routes including scheduling, pricing, revenue management ,marketing and sales.

Immunized joint ventures are perhaps even better than a merger, since they avoid the complications which inevitably come with a full merger. The setting up of immunized joint ventures has since rapidly extended to other markets. Japan’s regulatory authorities approved antitrust immunity for STAR on the Japan-Europe market, (Lufthansa-ANA), and on the Japan-USA routes (United/Continental-ANA). Similarly, antitrust immunity was granted to One World on the Japanese market (American-Japan Airlines). On the South Pacific, Australia and New Zealand competition bodies were involved in providing antitrust immunity to Sky Team (Delta-Virgin Australia) and One World (American-Qantas). Today, over sixty airlines participate in one or the other of the three alliances, but there are very few key players in the hard core of the immunized , Metal Neutral Joint Venture.


Meanwhile, new carriers have been growing in the Middle East. These Gulf airlines have developed a new model – a model which in fact re-invents the concept of national network carrier. The genesis of this new model can be traced back to a decision by the Government of Dubai to single out air transport – and specifically airlines – as one of its strategic industries, and an important tool of economic development. The airline model that evolved was based on the following elements:

•    The availability of new long-haul airplanes
•    The central geographic positioning of the Gulf
•    The full exploitation of 6th freedom rights
•    The development of an ultra- modern airport
•    Advantageous local tax and operating conditions

Etihad, Gulf Air, and Qatar Airways have followed a similar plan and are developing a global network carrier. Interestingly, Turkish Airlines has adopted a comparable strategy. With the advent of new, long-range, efficient airplanes and an increasingly liberalized market and 6th freedom rights, these carriers are capitalizing on the opportunity to link virtually every major city in the world with a one flight connection through their respective hubs. Burdened by excessive taxation, environmental constraints, expensive infrastructure and high labor costs, European airlines have concluded that the advantages enjoyed by the rapidly expanding Gulf carriers prevent a level playing field. Others in Europe, such as Finnair, see this model as an opportunity.


Low cost carriers are now providing 23 seats out of every 100 flown by all the world’s airlines. They continue to enjoy an excellent growth rate in the double digit range (growth was 15.7% in 2010 over 2009). Low cost carriers are growing in every region. In 2010, the capacity share of seats offered was:

•    17.7% for Asia-Pacific
•    28.7% for North America
•    35.0% for Europe
•    29.9% for Central/South America

Much of the low cost carriers’ growth in Southeast Asia has been made possible by the acquiescent attitude of governments accepting – tolerating – cross-border operations by non-flag carriers. As liberalization spreads in Asia-Pacific, we can expect the number and proportion of seats offered by low cost carriers to grow rapidly. To counter the penetration by low cost carriers, several legacy airlines have decided to launch a low cost subsidiary – or in some cases, to acquire control of a low cost carrier. Focusing on this particular region, and more particularly the Indian sub-continent:

•    Jet Airways , Kingfisher and Air India launched – or acquired – low cost subsidiaries a few years ago to counter the flurry of low cost airlines which emerged rapidly following the decision by the government to open up the market. For instance, Jet Airways created Jet Konnect, and acquired a low cost renamed “JetLite”.

•    Those low cost subsidiaries have provided a counterweight to Indigo and Spice Jet, now well established – and growing – Indian low cost carriers.

Elsewhere in the region, several legacy carriers have launched – or are planning to launch – low cost subsidiaries:

•    Qantas’ Jet Star domestic low cost subsidiary is doing quite well, and plans to form Jet Star Japan, with Japan Airlines and Mitsubishi.•    Thai Airways is working with Tiger Airways Holding of Singapore to establish a joint venture low cost carrier, based in Bangkok.

•    Tiger Airways Holding is also trying to launch – or re-launch – two more low cost airlines, one in the Philippines (SEAIR), and the other in Indonesia (MANDALA).

•    All Nippon Airways is planning to launch PEACH, a new short-haul , low cost carrier based in Osaka.

•    Finally, while Asia-X and Qantas’ Jet Star are making progress at getting established , Singapore Airlines has recently announced its intention to establish a new, no frills, low fare airline operating wide body aircraft on medium and long-haul routes.

Excluding the Chinese orders, Asian low cost carriers account for about 55 percent of the narrow-body order book for Airbus and Boeing. This would take their share of the region’s operating single-aisle fleets to more than 45 percent by 2015. The implications of this projected growth would be particularly significant for the region’s flag, or legacy carriers.

Similar development is occurring in other regions of the world. For instance, Air Canada has recently announced its intention to launch next year a new, low cost, long-haul subsidiary. If you can’t beat them, join them! In Europe, Brussels Airline was acquired by Lufthansa, and Iberia owns some 48% of Vueling, the Spanish low cost carrier, and plans to start another low cost, Iberia Express. And thus, many legacy airlines have decided to participate in the low fare market … in one way or another.


Modernization of Air Traffic Management is intended to be an important game changer. It was somewhat ironic that a number of members of the European Community would agree to abolish their borders on the ground – through the Schengen Treaty – but at the same time fiercely defended the need to keep them in the air! Since then – and with much delay – the concept of a Single Sky has been accepted.

And indeed, some very impressive targets have been set for “SESAR”, the European Air Traffic Management modernization project. European Air Navigation Services are expected to achieve a 50 percent reduction in service cost per flight by 2020, while at the same time accommodating a 3-fold increase in traffic. It should also contribute a ten-fold improvement in safety, and a 10 percent reduction in environmental impact , presumably by reducing flight stacking and straightening air routes. These targets have not been universally accepted.

The European Head of CANSO, the Council of Air Navigation Services Organization, has expressed serious concern as to whether they are indeed achievable. The technology and operational objectives have been agreed, but it is not totally reassuring that implementation is in the hands of politicians in some forty States!

Europe does not need all the current air traffic centers, which today number more than one per country. In fact, it is likely that the whole of the European airspace could be adequately served by four to six air traffic control centers. Beyond the technical complexities -which are being addressed – the problem is very much political. Air traffic controllers are highly skilled and well-paid professionals whose function is supported by other skilled jobs. These specialists will quite naturally fight for their jobs, and politicians are reluctant to see these important jobs disappear from their constituencies.

Nevertheless, somehow Europe is slowly creeping towards implementing a Single Sky through agreements to set up “Functional Airspace Blocks”… (F.A.B.s). While these avoid the delicate subject of mergers, these States are hoping to achieve greater operational efficiencies – and lower costs – by sharing their respective successes. There is evidence that this approach is developing a natural – but slow – momentum.

Meanwhile, it is vitally important to ensure that SESAR and its U.S. counterpart, NextGen, progress in concert. And to that end , U.S. and European specialists have already been working for some time on Atlantic inter-operability. The objectives of “NextGen” are comparable to “SESAR”. “NextGen” is required to increase air traffic capacity of the U.S. skies by some 250 percent over the next two decades. (The number of air travellers in the United States is expected to grow from 700 million to 1.2 billion in 2030.) The F.A.A. claims that the new system will save some 2 billion dollars of fuel per year (based on 2009 prices). The system will also improve delays in bad weather, and the handling of ground movements at airports.

As in the European project , “NextGen” will call for airplanes to be equipped with Automatic Dependent Surveillance Broadcast (ADS-B).
Other regions of the world are also developing modernization plans.
Canada and Australia – each with a huge airspace to cover – are moving ahead with ADS-B implementation. And Japan, in support of its long term vision of the future air transportation system, has developed CARAT (Collaborative Action for Renovation of Air Traffic Systems). A framework for cooperative action between Europe and Japan was recently signed to ensure interoperability between SESAR and CARAT. South Asian countries must also make sure that their Air Traffic Management Services are modernized in step, to achieve worldwide commonality.


The new wide-body aircraft generation, with its composite structure and fuel efficient engines, is introducing significant new elements contributing to the reshaping of our airline industry. The Airbus A-380 has essentially delivered its promise, and although its introduction was much delayed – and its implementation was very slow – the airplane has established a well-defined niche. As we know, this aircraft plays an important part in some Gulf airlines’ expansion plans. The Boeing 787, also delayed by some three years, finally started last September delivery to All Nippon Airways (ANA), its launch partner.

This is the standard version of the Dreamliner , the B-787-8. The two other versions of the B-787 will follow by 2013 – the -9, a larger model with similar range, and then a higher density model with much shorter range. (this has yet to be confirmed). At this time, the Airbus wide-body competitor – the A-350 series – will also be delayed by at least two years, but will also hopefully achieve the same improvements in operating costs and fuel burn. You will recall that that both manufacturers claim that their new wide-bodies will deliver a better than 20 percent improvement … over the models they are intended to replace.


What about the narrow-body fleet?

Wisely I believe – given the enormous investment in time, skill and money still required by the two major manufacturers to complete their respective wide-body developments – they both decided to postpone such an initiative. The Airbus A-320 re-engineering strategy has clearly paid off.
The NEO is well ahead of its 1000 order target set by Airbus for its first full year of marketing. The A-320 NEO is planned to achieve a 13 to 15 percent improvement in fuel burn over the standard A-320, and to be available in 2015. Boeing – which had claimed that its customers would prefer to wait for a new narrow-body – has now been forced to reconsider. Increasingly concerned about losing some of its key customers, Boeing has now made the decision to re-engine its B.737NG series -to be called the B.737MAX. The first delivery is now promised in 2017-two years after the A320NEO. In my view, this confirms that neither manufacturer is prepared to risk producing a clean-sheet, new narrow-body model before the end of 2020.

However, within the next few years the field is going to get fairly crowded in the narrow-body market. The Bombardier C-Series, with a capacity of 110 to 140 seats, plans to be available by 2013. The C-Series offers a 12 to 15 percent improvement in fuel consumption over the older B-737 and A-320s. The Russians’ entry from SUKHOI – the Superjet 100, with a first delivery date in the second half of 2012 – claims a similar performance for its models, which offer capacity ranging from 100 to 130 seats. The Chinese have also entered the fray with the COMAC C-919. This entry clearly takes aim at the A-320 and B-737 market given its size, seating capacity and range. The C-919 was planned to enter service in 2016, but could be delayed by at least one year. Nevertheless, the Chinese airplane did attract the attention of RyanAir , which signed a M.O.U. with COMAC for the C-919 at the Paris Air Show.


Aviation contributes less than 3 percent of total worldwide CO2 emissions. However, air traffic is projected to continue to grow at an average rate of 4.5 to 5 percent per year for the foreseeable future.
Today, the entire air transport industry has agreed to some rather ambitious targets. More specifically:

•    An annual improvement in fuel efficiency of 1.5 percent on average per year to 2020;

•    Capping net emissions from 2020 onwards – in other words, achieving carbon neutral growth from then on;

•    Cutting net aviation emissions by one half by 2050 compared to 2005.
These targets are now widely accepted and enjoy the support of the entire air transport industry – the manufacturers, the airlines, the airports and the navigation service providers.

Every member of this great industry is expected to contribute to CO2 emission reduction:

•    We have already stated that the implementation of SESAR and NextGen is targeted to achieve a 10 percent improvement, on average, in flight environmental impact.

•    The new generation of wide-body airplanes from Boeing and Airbus which are coming on line will contribute some 20 percent reduction in CO2 emissions.

•    The re-engined Airbus A-320 NEO and the Boeing B-737MAX will provide a 12 to 15 percent improvement in emissions.

•    The next single aisle airplane generation in fifteen years will have to provide a minimum of 25 percent to better than match this level of reduction …

Meanwhile, the introduction of new players such as the “C Series” and the Russian, as well as the Chinese entries, will need to contribute some 12 to 15 percent:

•    Biofuels are likely to make a significant contribution to carbon emissions reduction. The use of some biofuels has shown reductions in the order of 75 to 80 percent in CO2 emission. It is estimated that with some encouragement from governments, as much as 15 percent of the industry’s needs could be met by biofuels by 2020.

Dozens of airlines have already operated flights using a mixture of conventional and biofuel , with very satisfactory results.
Non-food biomass such as algae is a favorite, but many other sources are being tested. And thus, we should feel confident that the airline industry is rising to the challenge and will indeed meet its ambitious carbon emissions reduction targets.

So why would the European Community feel an absolute need to force fit international aviation into its Emissions Trading System?
This has created a crisis of major proportions.

•    The U.S. airlines have launched a legal challenge;
•    China has threatened to impose measures on European airlines;

•    The Asia-Pacific Airlines Association , as well as the Latin American and Caribbean Air Transport Associations, have called on the governments of their region to reject the E.U. Emissions Scheme.

To illustrate the inappropriateness of this decision, the Air Transport Association of America provided the European Community with a typical example using a U.S. airline flight from San Francisco to London Heathrow. The E.U. rule would apply to the aircraft even before the airplane begins to taxi from the gate and yet, as a percentage of emissions, only 9 percent would take place over European airspace. What if every other government was to decide to impose a scheme of its own? Clearly, the need for an international agreement appears obvious.


With the recent rise of interactive social media websites, people can engage in virtual discussions, send and receive images, videos, and express their views to thousands – even millions – of other people around the world. Technology is moving on, and it is now commonplace to use mobile phones and various tablets and pad devices to exchange information and surf the internet.

One of the largest social media is Facebook, where over 500 million registered users each have a page. Other leading sites are Twitter, for the exchange of short messages, and Youtube to watch and share videos.
Airlines are making increasing use of these social media to reach and interact with their customers. This will be discussed extensively at this Conference.

Many airlines now employ dedicated media staff to monitor their social media presence 24 hours a day. Southwest Airlines, for instance, claims to have well over one million “friends” on Facebook, and one million followers on Twitter.

Many carriers have set up social media “fan pages” for frequent flyers, and offer special advantages to users. Some social media sites allow passengers to exchange information on travel plans so that they can meet up on a flight or at a hotel. The variety is becoming endless.

And thus, today travelers connect and get content in many different ways. Airlines can genuinely provide truly personalized service to their customers. Social media provides a great way to deal with crises. Facebook and Twitter were found by some airlines to be a particularly effective way of keeping their passengers informed during last year’s volcanic ash cloud disruption. An airline with a strong brand – such as Virgin – can use social media to reinforce it.

Conversely, social media can quickly spread an unfortunate incident – and damage a reputation. You may remember the case where a Canadian musician, frustrated by United Airlines’ refusal over eight months to offer compensation for his damaged guitar, composed a song which appeared on Youtube.

The song was entitled “United breaks guitars”. It became a worldwide hit, was viewed over 10 million times, and proved to be a Public Relations disaster for United! But not everyone is convinced of the value of social media. Some airlines – such as RyanAir – consider it to be a costly use of resources with questionable value. And some people feel that extensive use of social media can have “Orwellian” overtones as regards personal privacy.


Airlines have often expressed concern about the cost of using the G.D.S. to distribute their product , and some have attempted to by-pass Global Distribution Systems – avoiding their fees – and provide a direct link to travel agents. But GDSs are also diversifying.

Sabre is planning to open, in the coming months, the Sabre Red app center”. This will be the first on-line marketplace to connect travel buyers – including travel agencies, travel management companies and leisure operators – with third-party developers. Taking advantage of the high speed of the communications networks which have become widely available, people are turning to devices which can offer a wide choice of features, such as tablets and pads.

Google and Apple are tempted to move for a greater slice of the airline distribution business by developing travel applications. In fact, Google’s recent acquisition of I.T.A. software indicates its intent to build a new flight search tool which could get end-users quickly to a site where they can buy a ticket.


The center of gravity of aviation has been shifting to Asia. Asia overtook the U.S. – the largest air travel market – in 2009. According to the Center of Asia Pacific Aviation, the world’s top ten routes are now in Asia Pacific. Year over year, the Asia-Pacific region -in terms of seat capacity offered – has been growing by 11 percent. Although intra-regional traffic is growing strongly, the year-over-year increases in flight frequencies to and from the region grew by 13 percent.

Taking a much larger role in meeting the intra-regional demand, low cost airlines are expected to grow by 20 percent per year over the next few years. The market presence of low cost carriers on the international scene is still very modest, but Air Asia X, Qantas’ subsidiary Jet Star, and the soon to be launched Singapore Airlines’ new subsidiary are determined to make a good attempt at penetrating this market. The inter-continental low cost carrier has now emerged as the new frontier.

Despite the region’s rapidly increasing demand for low cost products, it is interesting that the demand for premium traffic is also growing. IATA’s latest survey, published in August of 2011, reported that premium traffic within the Asia Pacific region had increased by an impressive 14.8 percent!

This contrasts to a decrease of more than 9 percent within North America. Another study conducted by the “Global Business Travel Association”, also released in August of 2011, re-enforces the increasing popularity of premium travel in Asia-Pacific.

The choice of airline for Asian travelers is being influenced by their preference for superior food and beverage options, as well as for hi-tech amenities.


Ladies and gentlemen, our industry continues to change – and nowhere is change occurring more rapidly than in this region, Asia-Pacific.
The main driver in this region is, of course, the exciting economic expansion which fuels the exploding growth of aviation. Although this expansion will be tempered from time to time by the unavoidable pressures of economic cycles, the long term prospects remain strong.

Supporting this growth – and enabling it to unfold – are a number of significant game changers which, on a broader front, are driving the transformation of our industry worldwide. These transformation forces are bringing both opportunities – and challenges – to which we must continue to adapt if we are to survive and prosper. The history of our industry has shown that we have seldom taken advantage of market growth to improve our profitability.

If I was to make a projection, I would expect that our somewhat irrational pricing behavior is unfortunately likely continue in the future. And this means that along with continued pressure for cost reduction, you will need to continue to fight for every dollar of revenue. And thus, in our competitive jungle, there are some fundamentals which will not change and which, in closing, can be illustrated and summarized by the following African proverb:

“Every morning in Africa, a gazelle wakes up.
It knows it must run faster
than the fastest lion, or it will be killed.

Every morning, a lion wakes up.
It knows it must outrun
the slowest gazelle, or it will starve to death.

And so, ladies and gentlemen,

It does not matter
whether you are a lion or a gazelle.
When the sun comes up
You had better start running!

Thank you!

Keynote address to World Tourism Day – The Future of Aviation

Europe: Policies and Political Will
Address to ‘World Tourism Day – Future of Aviation’
Helsinki, September 28, 2011  >>


Mr. Chairman, distinguished speakers from the European Aviation Safety Agency the FINAVIA Corporation and of the Boeing Company, colleagues from the aviation community, friends from the tourism world.

Distinguished guests, first let me express my sincere gratitude to BARIF for your kind invitation to participate in this important event, and for giving me an opportunity, however briefly, to visit this great country.
I very much regret that during my many years at the helm of IATA various circumstances, crises and obligations of the role never gave me the opportunity to come to Helsinki. It is therefore a double pleasure for me to be here!

But first, a brief disclaimer. Let me say at the outset that the views expressed here are strictly my own and do not pretend to represent the views of IATA or of any other corporation I have been associated with.
Finland and Canada have much in common. Both of us have liberalized our economy, and as a result are doing rather well.

Finland has just about the best record of any of the E.U. nations for government debt to GDP ratio (approximately 48%). Canada has the best record for debt to GDP ratio of all the major economies – the so-called group of seven nations (the ratio was 77% in 2010).

As Northern nations we both have harsh weather, although you do benefit from the soothing influence of the Gulf Stream and the Baltic Sea.
When one reflects on the economic difficulties experienced by the nations of southern Europe – as well as in my own hemisphere – that is one more thing we have in common!

Finally let me say that in both of our cases, the proximity of a large nation – in your case Russia and of course access to the E.U. Common Market , and in our case the United States – provides us with some great opportunities – but also some significant risks and challenges.

The late Prime Minister Pierre Trudeau was fond of saying that living close to the United States was like sleeping with an elephant in the same bed. You could easily get crushed if he rolls over!

For both of our countries, our geography and our demography – more particularly our relatively smaller home market compared to our neighbors – suggests that we must be acutely aware of the major trends re-shaping our industry.


Governments’ actions and policies have always had an important impact on aviation. Perhaps more so than on any other sector of the economy.
In North America and in Europe more particularly, the actions of governments in my view show a rather curious lack of coherence.
To over-simplify, these governments plan and encourage a full market economy to stimulate growth and greater customer choice through competition.

But at the same time, the same governments continue to introduce excessive taxes – in some cases recklessly -and lack the courage to properly support the necessary expansion and modernization of air traffic control functions and airport infrastructure. On the positive side, there is no doubt that the opening up of our industry to the market forces has been beneficial for the consumer – and to rejuvenate our industry.
Worldwide liberalization of air markets may have progressed rather slowly, but it has moved steadily. In contrast to some other industries, there was no “big bang”. A number of regionally integrated air markets exist today in Europe (E.C.), North America, Latin America, Africa, and Asia.

Internationally, the U.S. “Open Sky” initiatives introduced an air bilateral agreement which removed any constraints as to pricing, capacity, or points served between the U.S.A. and other countries. This type of highly liberalized air bilateral agreement has progressively become the norm in most of the air bilaterals being negotiated today. And, as you most likely know, a wide ranging “Open Sky” agreement was recently concluded between the United States, the European Community and Canada, providing all carriers in those regions with unlimited scheduling opportunities.

In other regions of the world -Asia/Pacific, China, India, the Middle East, as well as Latin America -increasingly liberalized air market agreements and the vigorous economic growth of those regions is providing the airline industry with exciting new opportunities.

But there are some dark clouds and unfortunately, in a number of countries, air travel is being taxed as if it was as “sinful” as alcohol and tobacco!

One of the worst offenders is probably the United Kingdom. The Airline Leader magazine in its March 2011 issue writes “It would not be unfair to describe Britain’s aviation policy as anti-aviation”! The article further observes that “The lack of any coherent strategy – combined with some anti-aviation forces – is undermining the viability of the nation’s airline system”.

One of the ugliest aspects of the U.K.’s imposition on aviation has been the Air Passenger Duty – ADP- along with its adherence to the principles of emissions trading involving airlines. This is simply another tax in disguise, as none of the funds collected have been applied to environmental initiatives. Recognizing that aviation is the prime engine of international tourism, let me quote the President and CEO of the “World Travel and Tourism Council”, David Scowsill, who recently declared:

“Governments continue to milk the tourism cash cow, with little thought for the industry which creates jobs, generates exports, stimulates investments, and powers sustainable economic growth”.

David goes on to say “The U.K. Air Passenger Duty has long set a dangerous and unhealthy precedent , and it is disappointing that the German government has also seen fit to penalize the industry – and millions of travellers – in this way.”

The Centre for Asia-Pacific Aviation reported last summer ”the U.K. domestic market took a big hit with a drop of 18% in available seats, demonstrating the continuing impact of the U.K. Air Passenger Duty charges – and the improvement in rail services”.

In its latest Quarterly Report, Ryanair observed that Dublin airport Authority increases of 40% in Airport charges, coupled with the Irish Government’s 3.0 euro tourist tax, had caused the traffic to plummet by 30% in 2010 to 18 million passengers from a peak of 24.7 million in 2007.

Ryanair believes that returning airport charges to a competitive level could generate at least 5000 jobs in the Irish economy. U.S. President the late Ronald Reagan who, as you may recall, was trying to reduce the bureaucracy of the U.S. Government, once said:

“Government’s view of the economy could be summed up in a few words:

If it moves – tax it;
If it keeps moving -regulate it;
If it stops moving – subsidize it”!

Some of us may be tempted to think that these words could also apply to aviation and tourism.


As was indicated previously, the opening up of our industry to market forces has been beneficial.
It is one of the powerful forces which have been reshaping the profile of our industry.

The model of the low cost carriers originated in the U.S. more than thirty years ago, with Southwest Airlines. Although Southwest has survived, many who emulated the formula succumbed during the 1990’s recession.
The model was successfully re-launched, with carriers like Easy-Jet, Ryanair, and others giving it a new impetus. Worldwide, low cost carriers are now providing twenty-three seats out of every hundred flown by all the world’s airlines.

They continue to enjoy an excellent growth rate in the double digit range. For example, growth was 15.7% 2010 over 2009. The low cost carriers are growing in every region. In 2010, the capacity in seats offered was:

  • 17.7% for Asia Pacific;
  • 28.7% for North America;
  • 35.0% for Europe.

Some observers believe that if this trend continues, low cost carriers will have captured some 50% of the intra-European market by 2020.

To counter the loss of market share, some legacy airlines are trying to launch a low cost carrier or, in some cases, to acquire control of one of the low cost carriers. (Brussels Airline being acquired by Lufthansa, Vueling is 48 percent owned by Iberia.)

Within the various economic regions where such activities are allowed, competitive forces have continued to encourage mergers and acquisitions.

And meanwhile, alliances have continued to expand their respective memberships. To date, more than fifty airlines already belong to one or the other of the three alliances, and some thirteen more have been invited to join.

Beyond the growth in their membership, the shape of the alliances is also changing with the emergence of joint ventures with anti-trust immunity.

The U.S. and E.U. authorities have recently granted anti-trust immunity to some of the key members of each of the three alliances over the Atlantic.

This anti-trust immunity is allowing them to operate in a fashion now referred to as “Metal Neutral”. A joint U.S. DoT – E.U. report states that “Metal Neutral” is a close substitute to a merger, allowing the key members of such alliances total coordination of the major airline functions on the affected routes including scheduling, pricing, revenue management, marketing and sales.”

Immunized joint ventures are also being achieved over the North Pacific for STAR, as well as for One World (Japan’s regulatory authorities have had to approve). On the South Pacific, key members of Sky Team and One World have also been granted anti-trust immunity for their respective “Metal Neutral” operations.

The smaller airlines not involved in these “Metal Neutral” operations may find it increasingly difficult … to maintain some influence … on their own respective alliances.


While legacy airlines have been busy expanding their alliances and creating a strong core of Metal Neutral joint ventures, new carriers have been growing in the Middle East. The Gulf airlines have developed a new model – a model which, in fact, re-invents the concept of national network carrier.

The genesis of this new model can be traced back to a decision, in 1985, by the Government of Dubai to single out air transport – and specifically airlines – as one of its strategic industries.

Along with the decision to turn the Emirates into a financial and trade center, the need for a world-class airline was identified as an important tool of economic development. The airline model that evolved was based on the following elements:

  • The availability of new, long-haul airplanes;
  • The central geographic positioning of the Gulf;
  • The full exploitation of 6th freedom rights;
  • The development of an ultra-modern airport;
  • Advantageous local tax and operating conditions.

Emulating that successful Emirates strategy, Etihad, Gulf Air, and Qatar Airways have followed a similar plan, and are developing a global network carrier.

With the advent of new, long-range, efficient airplanes – and an increasingly liberalized market and 6th freedom rights – these Gulf carriers are capitalizing on the opportunities to serve virtually every major city in the world with a flight going through a hub in the Persian Gulf. The rapid expansion of the Gulf airlines has attracted much concern on the part of some European and North American carriers.

Others, such as Finnair, see this model as an opportunity. Burdened by excessive taxation, environmental constraints, expensive infrastructure, and high labor costs, some European airlines have concluded that the advantages enjoyed by the Gulf carriers prevent a level playing field – and make it very difficult for them to compete successfully.

And thus, the airline industry has re-aligned itself into a number of very distinct groups:

  • Alliance members;
  • Low costs;
  • New “National” network Airlines (typically Gulf carriers); A large number of still un-aligned medium to smaller sized airlines. Some, such as Virgin, concentrate on building a unique “brand image”.

Thus far, none of the major low costs has chosen to become members of any alliance, believing their model and mode of operation to be largely incompatible. As far as the Gulf carriers are concerned, they truly believe – at this time – that their organic growth capability in developing their respective 6th freedom market will be sufficient for quite some time to support their expansion plans. I note, in passing, that Finnair has a similar strategy building a Europe to Asia hub.

Finnair’s CEO has recently stated that he believes that the Asian market will represent some 80% of revenues by 2020. Driven largely – but not uniquely – by the exciting economic development of Asia, the airline industry will continue to enjoy good traffic growth – at least for the foreseeable future. But it is urgent in some regions -and Europe is a case in point – that infrastructure be expanded to cope economically and safely with this growth.


My first address , as incoming Director General and CEO of IATA in 1992, was at a Conference in Brussels which had been called to discuss a chronic European air traffic congestion problem.
This was some nineteen years ago – the European Community had fifteen members and fifteen air traffic management authorities.

There were, as we then observed, too many air traffic control centers – each operating with different rules, different software, and different equipment.

All of which resulted in a very unproductive system, and a lot of unnecessary delays and congestion.
The need for a “Single Sky” concept was already obvious but the best that could be achieved was to get an agreement to harmonize the rules and systems between the various air authorities.
A program called EATCHIP (European Air Traffic Control Harmonization Program) was launched.

I thought at the time that it was somewhat ironic that a number of members of the European Community would agree to abolish their borders on the ground – through the Schengen Treaty – but at the same time fiercely defend the need to keep them in the air!

Since then we have progressed, and the concept of a Single Sky has been accepted. And indeed some very impressive targets have been set.
Air Navigation Services are expected to achieve a 50% reduction in service cost per flight by 2020 – while at the same time accommodating a 3-fold increase in traffic, a ten-fold improvement in safety, and a 10% reduction in environmental impact.

These targets have not been universally accepted. The European Head of CANSO – the Council of Air Navigation Services Organization – expressed serious concerns late last year. CANSO has called the target “unrealistic”, and believes that the economic modeling used was too inaccurate to support target setting.

This massive “SESAR” air traffic management modernization project is currently in the process of being validated. The stakes are high. Patrick Ky, the Executive Director for the “SESAR Joint Undertaking” (J.U.) which is managing the public-private partnership that is overseeing the development phase, says that over the next fifteen years, the total costs are expected to be in the 30 to 35 billion Euros range. Richard Deacon, the head of the U.K. semi-privatized ATM provider NATS, deplored that “SESAR” is providing the bricks to build a new house – but no one has spoken to the architect!” We have a situation where the technology and operational objectives have been agreed – but it is not totally reassuring that the implementation is in the hands of politicians in some forty States! In our new hi-tech world, Europe does not need all the current air traffic centers, which today number more than one per country.

In fact, it is likely that the whole of the European airspace could be adequately served by four to six air traffic control centers.
Reflecting on the inefficiencies of the current system David McMillan, the Director General of Eurocontrol, has concluded that the productivity of European ATMs is approximately half that of the U.S. systems. Beyond the technical complexities which are being addressed, the problem is very much political. Air traffic controllers are highly skilled and well paid professionals, whose function is supported by other skilled jobs. These specialists will quite naturally fight for their jobs – and politicians are reluctant to see these important jobs disappear from their constituencies. Privatization of the various air navigation services could be a less painful way for politicians to distance themselves from the issue.

In this regard UK-NATS – which is celebrating this year ten years as a P.P.P. – is a real success story! I had the privilege -and the pleasure – of serving on the Board of NATS for the first two years of its existence as a PPP, and they are a good example of what can be achieved. Consulting their latest Annual Report published in April, you will see that NATS was able to cut air traffic delays by over 95%, reduce operating costs by 30% in real terms, and improve its financial performance from a loss of 80million pounds in 2002 – to a profit of 106 million pounds in 2011.]

Spain has announced its intention to privatize its air traffic control system ahead of the partial privatization of its airports.
This would re-structure AENA, the Spanish government’s company which currently controls both. AENA’s air traffic controller costs have been by far the highest in Europe, and any attempt to bring these costs more in line with other ATCs has unleashed strong opposition from the Spanish Controllers’ Unions. Not surprisingly change – and more particularly potential change in ownership – has already caused unrest among controllers, and this is likely to accelerate.

Nevertheless – somehow – Europe is slowly creeping towards implementing a Single Sky through agreements to set up “Functional Airspace Blocks” (F.A.B.s). While these avoid the delicate subject of mergers, a F.A.B. attempts to achieve some of the operational effectiveness as if it was operated by one jurisdiction.

Recently Belgium, France, Germany, Luxembourg and Switzerland have signed an agreement to create a ‘’’Functional Airspace Block – Europe Central” (F.A.B.E.C.),which hopefully will streamline -if not eliminate – the current fragmentation of a major portion of the European airspace.
FABEC has received 13.8 million Euros in E.U. support for a study to be completed by the end of 2012. This is the third Functional Airspace Block to be set up, following on the UK. –Ireland F.A.B. and the Denmark-Sweden F.A.B.

There is evidence that this approach is developing a natural momentum.
States involved in the Northern European ATM Alliance – Denmark, Estonia, Norway, Iceland, Ireland, Latvia, Sweden, U.K, and Finland – are working together. It is reported that these States are setting up an executive management team to prepare legal and financial ground to enable a specific joint venture.

This alliance hopes to achieve greater operational efficiencies – and lower costs – across their common airspace. The Chief Executives of these various ATC providers believe that the experience gained by operating their respective F.A.B.s has enabled them to identify exciting opportunities – and practical ways – to drive efficiencies across their airspace.

This is likely to bring them closer to a possible, eventual , integration.
Meanwhile, it is vitally important to ensure that SESAR – and its U.S. counterpart, NextGen – progress in concert. U.S. and European specialists have been working for some time already on Atlantic inter-operability, and this year FAA personnel will become formally involved within SESAR – with some direct involvement down the road.


Unfortunately, as the recent tragic events in Norway demonstrated, no one today can hope to be sheltered from a potential terrorist attack.
While terrorism can hit our democratic society virtually anywhere, we keep being reminded that aviation will continue to be a favorite target. Why should airlines be such a favorite target? The reasons are relatively obvious:

  • Our industry enjoys high visibility, and we have essentially a no-accident tolerance level;
  • Aircraft accidents are unfortunately very spectacular – and are extensively covered by media;
  • Any terrorist attack on an airliner – successful or not – has an immediate effect, hopefully short-term.
  • It is disruptive to the economy of the region – if not the world.

The public expects that a terrorist attack on a commercial airliner will be prevented at all costs, and under all circumstances …. As a result, governments and the airline industry have been forced to take extraordinary measures beyond what any other industry would be expected to take.

Measures that are very costly to everyone – and most disruptive to passengers. Last June at its Annual General Meeting, IATA reported that the cost of security at airports – largely born by the airlines and the travellers – had soared to 7.4 billion US dollars. But there are additional costs, less visible.

The U.S. Travel Association (U.S.T.A.) recently released research that was carried out in 2010. This research showed that travellers in the U.S. are avoiding two to three trips per year, due to the unnecessary hassle associated with security screening at airports. U.S.T.A. has estimated the resulting cost to the U.S. economy to be approximately 85 billion US dollars – and a resulting loss of some 900,000 jobs.

While I am not aware of any similar research of the impact of airport security on European air travellers’ habits, it would not be surprising if a substantial number of air travellers each year are avoiding taking some trips. Indeed, some European politicians have been urging travellers to switch to trains, where possible – but in this case for ecological reasons.

Understandably, this can be an attractive option in Europe for short to medium distance trips, given also that security processes are a lot less onerous at any train station compared to any airport!


Perhaps because it is the most visible evidence of increased security, that so much effort and technology has been directed at airport screening.

One of the more recent introductions of technology at airports has been the controversial use of body scanners. The objections raised by a number of privacy and civil rights’ organizations in the U.S. demanded a suspension of the program on the basis that it was “uniquely intrusive” and violated travellers’ rights against unreasonable search (invoking the 4th Amendment).

This led to the introduction of new software which only shows generic body outlines – and therefore enhances privacy. But there are also other concerns. It would seem that body scanners’ maintenance was not always properly conducted. These records indicated that some full body scanners were shown to be emitting radiation levels ten times higher than expected.

Reacting to the situation, the European Parliament last summer passed a Resolution advising Member States that while “the European Parliament Members accept that body scanners would enhance security, they request that the technology be deployed in the least harmful way to human health and with concern for privacy”.

The Resolution further states that “due to health risks, scanners using ionizing radiation should be prohibited in the E.U.” The Members of Parliament were also urging that scanning be applied at random – without any discrimination or any form of profiling – and that no “body image” be stored and kept.


I would suggest that of all the nations which have had to confront security threats, few – if any – would match the State of Israel. It is my understanding that authorities in Israel look at security in four dimensions, namely:

  • Technology;
  • Profiling;
  • Intelligence; … and
  • Information-sharing.

The lack of information sharing was an obvious failure in the 9/11 terrorist attack. Most of the perpetrators and their motives were known by one national intelligence service or another – but no one was willing to share the information which might have enabled the whole story to emerge before the event. This major gap in our defenses does not appear to have been fully closed.

The failed 2009 Christmas Day attack continued to reveal a failure to “connect the dots”. Reviewing the incident, President Obama stated “this was not a failure to collect intelligence: it was a failure to understand the intelligence we already had which resulted in the suspect not being placed on the “no-fly” list. Among the questions of information sharing, the hotly debated exchange of passenger data was finally settled this summer between the United States and the European Union.

This Agreement would allow the U.S. Department of Homeland Security (DMS) to store the data for fifteen years, rather than the five years which is today allowed in the E.U.’s passenger name record (PNR) scheme.
In parallel, the Department of Homeland Security (DMS) began a joint initiative with the International Civil Aviation Organization (ICAO ) to reach a global consensus on better information collection, vetting and sharing of information about passengers before they even get to the airport.

Despite claims that this could amount to profiling, there is increasing acceptance for a proposal -supported by both the U.S. Department of Homeland Security and the U.S. Travel Association – to reform the current security screening system.

The proposal for a revised airport security screening process would, among other things, call for implementing a risk-based, trusted traveller program.

This should allow also greater focus on those who pose a greater threat.
The recommendation also suggests a need to reduce repeat screening of those arriving on international flights and connecting to domestic services.

Through ICAO, a number of governments – including the U.S.A. – are working to define standards for a checkpoint of the future.

At its last AGM , IATA unveiled a first mock-up of such a checkpoint .
Passengers would be directed to one of three lanes, namely known travellers ; normal; or enhanced security. The passenger would be directed on the basis of biometric identifiers contained in his or her passport or other travel document, that would trigger the result of a government previously-conducted risk assessment. We should be concentrating on bad people rather than on bad things being carried on board.


Aviation contributes approximately 2 percent of the total worldwide CO2 emissions …. This is still, at this time, a fairly modest contribution to global warming.

However, air traffic is projected to continue to grow at an average rate of 4.5 to 5 percent per year for the foreseeable future. And with this in mind, already some ten years ago, the air transport industry began to take steps to deal with this matter very seriously – first to contain, or reduce the growth of its carbon footprint , and to eventually reduce it in absolute terms.

This has led to the identification – and the commitment – to some rather ambitious targets. Those targets are now widely accepted, and enjoy the support of the entire air transport industry – the manufacturers, the airlines, the airports, and the navigation services.

Together, the members of the air transport industry have committed to:

  • An annual improvement in fuel efficiency of 1.5 percent per year to 2020;
  • Capping net emissions from 2020 onwards – in other words, achieving carbon neutral growth from then on;
  • Cutting net aviation emissions by one half by 2050 compared to 2005.

These targets have received the support of the U.N. and its Secretary General, who commended the industry on its sectoral approach.
The industry has been working very closely with the International Civil Aviation Organization (ICAO), to achieve an international consensus among all nations.

Every member of this great industry is expected to make a contribution to CO2 emission reduction.

  • We have already stated that the implementation of SESAR and NextGen is targeted to achieve a 10 percent improvement on average to flight environmental impact.
  • The new generation of wide-body airplanes from Boeing and Airbus which are coming on line will contribute some 20 percent reduction in CO2 emissions.
  • The next single aisle airplane generation in a decade or so will better than match this level of reduction.
  • Biofuels are likely to make a significant contribution to carbon emissions reduction. The use of some biofuels has shown reductions of the order of 75 to 80 percent in CO2 emission. It is estimated that with some encouragement from government as much as 15 percent of the industry’s need could be met by biofuels by 2020.

Dozens of airlines have already operated flights with a mixture of conventional and biofuel, with satisfactory results (e.g. Qatar Airways, B.A., KLM, Finnair, Virgin Atlantic, etc.). Non-food biomass such as algae is a favorite, but many other sources are being tested.

For instance, B.A. has entered into a partnership with the Solena Group to build a sustainable jet fuel production facility. This plant is expected to convert about 500,000 tons of waste into 61 million litres of green fuel – which is double what would be required to make all of B.A.’s flights out of London City Airport carbon neutral.
And thus, we should feel confident that the airline industry is rising to the challenge and will meet its ambitious carbon emissions reduction targets.

So why would the European Community feel an absolute need to force fit international aviation into its Emissions Trading System? Along with the “cap and trade” principle, the E.U. also appears to believe that “one size fits all”. True, the ETS seems to have worked reasonably well for many industries since its inception in 2005, and somehow decided that airlines should be treated like any other sector of the economy. But international aviation is different. It is not an ordinary industry – as the World Trade Organization and the O.E.C.D., among others, have concluded.

International aviation is still largely governed by the Chicago Convention, which created ICAO and, indirectly, IATA. The founders of the International Civil Organization recognized that the nature of international aviation required – indeed demanded – and continues to require globally harmonized rules to function safely and efficiently.
Unfortunately, the E.U. has decided to move unilaterally on a subject which, by its own nature, requires international agreement!

This has created a crisis of major proportion. The U.S. airlines have launched a legal challenge against the E.T.S. in the European Court of Justice. The China Air Transport Association, representing the country’s airlines, has described the E.T.S. as “unreasonable and illegal” – and China has threatened to impose measures on European airlines.
The Latin American and Caribbean Air Transport Association, ALTA, has called on the governments of its region to reject the inclusion of international aviation in the E.U. Emissions Scheme.

Also expressing concerns, the European Airline Association – AEA – is urging the E.U. and the U.S. to accelerate negotiation towards a global approach within the ICAO forum. Central to the dispute is the decision by the E.U. to impose its scheme on all international flights from , or to, anywhere in the world that arrive at or depart from an E.U. airport.
To illustrate their perceived unfairness of this decision, the Air Transport Association provided the following example using a U.S. airline flight from San Francisco to London Heathrow.

The E.U. rule would apply to the aircraft even before the airplane begins to taxi from the gate and yet, as a percentage of emission:

  • 29 percent would take place in U.S. airspace;
  • 37 percent over Canadian airspace;
  • 25 percent over the high seas …
  • and only 9 percent over European airspace.

Of course, for a European airline operating a flight out of London Heathrow to San Francisco, a similar percentage of emissions would take place over these same airspaces. And what if the Canadian government and the U.S. authorities were to decide to impose a scheme of their own?
Clearly, the need for an international agreement appears obvious – and the sooner the better.


Mr. Chairman, there is no doubt in my mind that European commercial aviation still has an exciting future. Indeed, in the first six months of this year, the number of passengers in Europe grew by 63 million – which is more than 10%. But it is also facing some significant challenges.

The European airline industry is a very significant sector of the economy – and a prime engine of tourism. But it is not clear that government policies are adequately supportive of their economic importance. Market liberalization has significantly contributed to the expansion and the re-structuring of the industry – but at the same time, airlines and their customers are excessively taxed and saddled with expensive infrastructure. Valiant efforts are being made.

However, one is tempted to ask whether European politicians truly have the political will to speedily bring about an efficient, Single European Sky.
By contrast, the European airlines are facing competition from carriers – mainly in the Gulf – who enjoy full support and encouragement from their respective governments. Security at airports is costly, it is inconvenient, and there is a crying need for stronger European leadership to address the problem and bring about major improvements.

Finally, rather than recognizing the unique nature of international aviation and supporting the ambitious targets in carbon emissions reductions the industry is striving to achieve, the E.U. is attempting to impose its Regional ETS approach on an international issue. Mr. Chairman, Finland can be proud to have originated the world’s most popular game, presently being played on mobile phones, ipads, and the like – the famous “Angy Birds ”.

But Brussels and the E.U. can claim to have originated the latest, most unpopular proposal for international airlines – and have caused a lot of Angry Birds!

Thank you.

Address to Soirée des Lauréats

Soirée des Lauréats
Allocution par Pierre J. Jeanniot – hommage à Louise Roy
Montréal, Canada, 9 Novembre, 2009  >>


Chers Lauréats, chers jeunes entrepreneurs, distingués invités, mesdames, messieurs,

C’est pour moi une soirée doublement agréable

D’une part parce que j’ai l’aimable tâche de faire l’éloge de l’une des deux personnalités éminentes qui sont à l’honneur aujourd’hui – plus particulièrement Louise Roy.

D’autre part parce que cela me donne l’occasion de me retrouver en compagnie d’un groupe de personnes sympathiques sur lesquelles nous, les plus séniors, comptons beaucoup – c’est-à-dire la jeunesse, et les leaders de demain.

À ce sujet, cette soirée me rajeunit un peu parce qu’elle me reporte en quelque sortes à une période de ma vie – il y a de cela une trentaine d’année.

À cette époque, j’ai été très impliqué auprès de la jeune Chambre de Commerce de Montréal où j’ai d’ailleurs servi en tant que Président du Conseil des Gouverneurs.

Un bon nombre de ceux qui participaient aux activités de la jeune Chambre à l’époque ont fait leurs marques et je suis persuadé qu’un bon nombre d’entre vous – jeunes ici présents – sauront créer des entreprises qui deviendront florissantes.

Je suis de ceux qui sont d’avis que l’on apprend beaucoup en observant le comportement des personnes qui ont réussi et en étudiant leurs parcours.

Il est intéressant de voir la nature des défis auxquels ils ont fait face et comment ils ont géré les difficultés qu’ils ont rencontrées.

En ce qui concerne Louise Roy, sa carrière est toute à fait exceptionnelle.

Son parcours est ponctué d’une suite de défis de grandes difficultés et fort diversifié.

Chacun de ces défis aurait été de nature à abattre, et décourager, bon nombre d’entres-nous mais la ténacité et la persévérance, ainsi que son habile doigté, lui ont permis de surmonter avec succès chacun de ces défis.

Ma première rencontre avec Louise Roy remonte à plus d’une vingtaine d’années.

Elle était déjà – malgré son très jeune âge – à la tête de la Société de Transport de la région Métropolitaine, et j’étais alors le PDG d’Air Canada.

Nous faisions face tous les deux à des conflits de travail assez difficiles, sans doute parce qu’il était nécessaire pour chaque entreprise d’améliorer la productivité et l’efficacité de nos services.

Nous étions tous les deux des chefs d’entreprises ou d’agences gouvernementales – elle municipale et moi fédérale – et nous savions très bien que ce genre de conflit devient rapidement politisé et d’autant plus difficile à gérer !

Je l’avais invitée – peut-être pour qu’elle se sente moins seule mais surtout pour échanger sur nos expériences relatives – et je me suis vite aperçu qu’elle avait la situation bien en mains, avec calme et lucidité.

Son rôle à la Société de Transport a donné à Louise l’occasion de développer un certain nombre de relations internationales.

Elle a, par exemple, bien connu Christian Blanc qui était à l’époque Président de la RATP – l’important Réseau de Transport Urbain de Paris.

Les qualités évidentes et le savoir-faire de Louise avaient sans doute fort impressionné Christian Blanc qui, aussitôt nommé à la tête d’Air France, l’a convaincue de se joindre à son équipe dont le mandat était clair – à savoir améliorer l’image, la qualité du service, et la rentabilité.

Louise – à qui il avait demandé au début de prendre la Direction d’Air France pour les Amériques – s’est vu confié par la suite la lourde responsabilité d’améliorer la qualité du service à la clientèle.

Je pense qu’il n’est pas exagéré de dire que c’est elle qui a enseigné à Air France ce qu’est le service à la clientèle.

À mon avis, Louise a joué un rôle absolument central dans la stratégie de Christian Blanc.

Après tout, améliorer le service à la clientèle ne peut qu’améliorer l’image et déboucher sur une meilleure rentabilité.

De retour au Canada, sa mission accomplie, Louise s’est lancée encore une fois dans une entreprise de nature totalement différente.

Cette fois là, ce fut Philippe de Gaspé-Beaubien qui réussit à la convaincre de prendre la gouvernance de sa compagnie familiale, Telemédia, en attendant que ses enfants soient en mesure de prendre la relève.

Un autre défi – dans un domaine totalement différent.

J’ai eu le plaisir – et la chance – de revoir Louise au moment où elle terminait ce dernier mandat, et de pouvoir l’intéresser à me joindre à l’IATA..

IATA avait des bureaux dans une centaine de pays mais j’avais regroupé un certain nombre de fonctions importantes dans des centres régionaux afin de mieux servir notre clientèle.

Nous avions donc des centres à Genève, à Londres, à Singapour, à Amman (Jordanie) et à Miami (pour l’Amérique Latine).

Ces centres régionaux offraient une variété de services à caractères commerciaux , tels que formation, publications, services financiers, etc.

Tout cela était dirigé par Louise à partir de Montréal, où était situé son quartier général.

Il va sans dire que ce type d’organisation demande d’être presque constamment en déplacement, et de gérer des situations très diverses – et parfois délicates – en fonction des diverses cultures, sans oublier que les attentes peuvent être assez différentes d’une région à une autre.

Encore une fois, Louise a démontré une capacité d’adaptation exceptionnelle, et les activités qu’elle a dirigées durant son passage à l’IATA ont connu un essor remarquable – et j’en suis d’ailleurs fort reconnaissant.

Depuis lors, ses multiples activités n’ont fait que confirmer la grande diversité de ses intérêts et sa capacité d’adaptation à une multiplicité de rôle important.

Que ce soit comme membre du conseil d’administration de plusieurs grandes sociétés où à CIRANO, au conseil des arts de Montréal, ou plus récemment en tant que la première Chancelière de l’Université de Montréal.

À bien des points de vue, l’exceptionnelle carrière de Louise Roy illustre clairement les qualités de leadership et d’entrepreneurship qui doivent nous servir de modèle.

Pour m’en citer que quelques un :

Un certain goût du risque – à vouloir s’aventurer hors des sentiers battus ; mais risque qui se veut néanmoins éclairé.

Une passion de la réussite qui nécessite une grande persévérance et du travail acharné.

Une certaine abnégation qui doit placer le succès de l’entreprise au dessus de notre succès ou gloire personnel.

Et j’ajouterai évidemment une attention toute particulière à la dimension humaine que ce soit le service à la clientèle ou le respect des employées – sans oublier les actionnaires ni la communauté dans laquelle nous œuvrons.

En conclusion, je félicite chaleureusement Louise pour ses multiples réussites et pour l’hommage indéniable et bien mérité que nous lui rendons aujourd’hui.

Finalement, je me dois d’aussi féliciter le magazine « Entreprendre » et son Président, Monsieur Edmond Bourque.

M. Bourque, qui a fondé « Le Cercle Entreprendre » du Québec, est de toute évidence une homme passionné qui a très bien compris que l’avenir de notre communauté passe par un plus grand esprit d’entrepreneurship.

En terminant, je souhaite à M. Bourque et à son entreprise, bon succès et longue vie – et que ses efforts de son magazine et du Cercle Entreprendre soient des plus fructueux.

Merci !

Keynote address to the APG World Connect Conference

Commercial Aviation: Challenges and Opportunities
Keynote address to the World Connect APG Conference
Monte Carlo, November 4, 2010  >>


Ladies and Gentlemen:

It is a real pleasure to be participating in this World Connect APG Conference.

I understand this is only the second edition of this type of conference, dedicated largely to the commercial side of our aviation industry – marketing, sales, distribution and the like.

I have known Jean-Louis Baroux for a long time, perhaps longer than I care to remember. As many of you know, Jean-Louis is known for staging excellent Conferences which achieve an appropriate blend of food for thought – and food for the palate.

Mindful of his modest ambitions, I suspect that this event will soon be known as “the Commercial Aviation Monte Carlo World Summit”.


The airline industry is a tough business – always has been and I guess always will be!

I can make that statement with a fair degree of confidence, having lived through during my aviation career at least four major economic downturns.

And I have the scars to prove it!

Which goes to show that I have been in aviation a long time.

In fact when I started, flying was still a little dangerous – but occasional sex was still quite safe!

I know of few other industries that are as capital intensive as aviation, with the need to commit large investments on a long lead time basis, and at the same time as dependent for its revenue on short term variations of the economy and the resulting wide fluctuations in discretionary income.

And this is where we are called upon to use our skills and ingenuity to compensate for the high degree of short-term unpredictability of the demand.


Now as we stand back looking at our industry, it should be obvious that
beyond the consequences of being buffeted by short-term economic fluctuations, this industry is in the midst of a highly significant transformation which is essentially introducing a new era in commercial aviation.

A number of important events and forces have combined, among others, to accelerate that transformation. More specifically:

Some spectacular attacks by kamikaze terrorists – and that threat will continue;

A sudden and highly disruptive oil crisis which could easily recur;

The continued pressure on yield to meet consumer demand;

The progress achieved thus far – and the worldwide trend – in further liberalizing air markets;

A deep economic recession which lingers on, particularly in the U.S.A. and Europe

The rapid economic growth of Asia, more particularly the economies of India and China;

World-wide recognition of our contribution to climate change, and the need for aviation to reduce its carbon foot-print.

All of these factors – and more – are irrevocably changing and redefining commercial aviation and will present us with challenges – but also opportunities.


On the matter of the environment, the industry has set as a target to cap net carbon emissions and achieve neutral growth from 2020 onward.

Since we continue to project that traffic will double over the next fifteen years, it would mean that, by then, our current CO2 emission per passenger/kilometer would have been reduced by 50%!

This is a very ambitious target which requires, among other things, that we accelerate the development – and mass production – of new fuels.

There is a definite marketing advantage to being perceived as “being green”!

Airlines and aircraft manufacturers are heavily involved in testing various fuel alternatives.

Several airlines have successfully operated flights with a 50% blend of biofuel and conventional aviation fuel – and advertised the results to gain some marketing advantage.

A recent study endorsed by Boeing concluded that the fuel blend met, or exceeded, all parameters required such as fuel freezing and flashpoint with no adverse effect on engine or components.

And thus it appears that the mix is also quite safe.


Naturally, airlines also expect that the new aircraft models will play an important part in the achievement of the carbon emission reduction targets.

The airline industry has been asking for new airframe and powerplant combinations capable of delivering fuel burn improvements in excess of 20%.

The significant increase in the use of composite material, improved aerodynamics, and more efficient engines are likely to help us meet that level of improved performance over the next 15 to 20 years, as the entire fleet is renewed.

Unfortunately, launch and production delays have significantly hampered wide-body fleet renewal.

The Airbus A-380 has met – or exceeded – its expected performance, but the manufacturer has been struggling to ramp up production.

Last year, only ten Airbus A-380 were produced, and the hope is that the rate can be increased to 20 for this year (more than 230 have been sold).

Extensive delays and additional cost have also plagued the introduction of the new Boeing B-787, the so called “Dreamliner”.

This airplane was to begin commercial operations two years ago this Fall. It has now been announced that the first delivery to All Nippon, its launch customer, will slip into 2011.

At this time, there is no reason to believe that this new family of airplanes will not fully meet expectations and offer savings of the order of 20% or better in operating costs … and fuel consumption.

The standard version – the B-787-8 – with a seating capacity of 210 to 250, is expected to replace the Boeing B-767-300ER and the Airbus A-310.

The longer range and higher capacity version – able to accommodate from 250 to 290 seats – will enable many new route to be opened where today the market is too thin to be economically served by a Boeing B-777-300ER or an Airbus A-340-500/600.

Not to be outdone, Airbus has been developing a new long-range wide-body – the A-350 series – which once again promises to improve significantly on its current A-330, A-340s and some Boeing B-777 models.

The A-350-1000 – its larger, long range version – hopes to render obsolete some Boeing B-777 models.

The Airbus A-350-800 would be aimed at competing advantageously with the bigger version of the “Dreamliner”, more specifically the B-787-9.

And thus, the profile of the wide-body, long range international fleet likely to be in service over the next twenty years or so is already well known.

The airframe will be largely made of composite material, the aerodynamics will have been further refined, the engines will provide substantial improvements in fuel burn, and safety and dispatch performance will be higher – resulting in further improvements in reliability and maintenance costs.

And as Emirates has demonstrated, the introduction of a new, modern, cost effective, energy efficient aircraft types – such as the A.380 – can be an important marketing tool!


But what about the single-aisle, narrow-body fleet?

The two major aircraft manufacturers – Airbus and Boeing – are unlikely to launch into the design and development of a totally new, narrow-body aircraft any time soon.

The primary reason is that they both need to complete their respective wide-body programs – and reap some of the resulting financial benefits – prior to committing to some other very costly development.

Both lines – the A-320s and the B737NextGen – continue to sell very well, and the only concern on the horizon would be whether the Bombardier “C” Series is likely to gain momentum and carve up a significant share of the bottom end of the two well-established single-aisle families.

Still another important question is whether both major manufacturers are satisfied with the engines which could be made available for a new narrow-body aircraft.

Wisely, Bombardier delayed its launch decision until it was assured that Pratt and Whitney could guarantee the availability of a new engine.

The Pratt and Whitney 1000G Geared-Turbo-Fan, which claims to deliver 12 to 15 percent lower fuel burn, was simply crucial to the “C” Series promise of 20 percent improvement over existing A-320 and B-737 NextGen current models.

Now CFM International has also proposed to enter the narrow-body engine market of the future, which could deliver 12-15% percent better fuel burn.

Airbus and Boeing have been seriously examining what they would need to do to put new engines on an upgraded version of their aircraft, raising the prospect of a modernized, re-engined A-320 and B-737 family emerging some five years from now.

The decision by the major manufacturers to offer a re-engined A-320 and B-737 five years from now could impact the market share that the “C” Series of Bombardier is hoping to capture.

The market share of the “C” Series will be very much affected by the timing of the re-engining decision, the price of fuel and whether, following re-engining, the “C” Series would still benefit from a 10 percent or so fuel burn advantage.

As of this moment, Embraer does not seem anxious to enter the fray and appears content to compete in the 100-seat or less market.


Worldwide deregulation of air markets has progressed rather slowly, but steadily.

In contrast to some other industries, there was no “big bang”.

A number of regionally integrated air markets exist today in Europe (E.C.), North America, Latin America, Africa, and Asia.

Internationally, the U.S.A. “Open Sky” initiative introduced an air bilateral agreement which removed any constraints as to pricing, capacity, or points served between the U.S.A. and other countries.

This type of highly liberalized air bilateral agreement has progressively become the norm in most of the air bilaterals being negotiated today.

The globalization of trade and the liberalization of the air markets is typical of the powerful forces at work re-shaping the profile of the aviation industry.


To take advantage of liberalized air markets, new business models have emerged – and previous business models have had to question their relevance and redefine their roles.

One thing is quite clear: the days of government-owned national airlines are over.

The constraints of government ownership – and the inefficiencies that came with it -render such an organization incapable of coping successfully with the intensely competitive environment which today characterizes our industry.

One of the significant factors that has forced the re-structuring of the traditional network carriers has been the emergence – and the surprising strength – of the so-called “low cost” carriers.

During the aftermath of the U.S. deregulation, many new carriers came into being, attempting to follow the Southwest model.

Most were unable to survive past the 1990 economic recession.

It was up to Europe to re-launch the concept New carriers such as EasyJet, Ryanair and others gave the low cost model new impetus.

Today, low cost carriers have established a presence in every region of the globe, exerting strong competitive pressure on the more traditional airlines.

Those have been compelled to redefine their presence in the market and to adjust their domestic and regional networks.

The growth of the “low cost” carriers has been nothing short of remarkable.

A study published earlier this year by the Centre of Asia-Pacific Aviation indicates that the total growth of the world capacity deployed since 2001 is equal to the growth experienced by the “low costs”.

The number of seats flown by the “low costs” grew from 7 percent to 22 percent of the total!

Not every new entrant has been successful but still, by the end of last year, approximately two thirds of all newcomers since 2000 had survived.

Which means that adding up the players present in all the regions of the world, some 128 “low costs” were in operation.

What makes the “lowest price” marketing strategy of the “low costs” so successful is, of course, the simplicity of its business model.

It is a no-frills service – a single class, one type of aircraft only, with high-density seating and high aircraft daily hour utilization.

A low cost generally has low overhead, few fixed costs, extensively out-sources, employs younger, lower-paid employees – and distributes its products almost exclusively through electronic media.


Responding to these competitive forces -and to take advantage of the new flexibilities offered by the more recent, regional economic integrations – several traditional airlines have decided to re-group through mergers and acquisitions, and develop alliances.

This marketing strategy is centered on offering the convenience of a worldwide network.

The re-grouping is well underway in Europe.

Lufthansa – which earlier absorbed Swiss International, the former Swissair – has more recently completed the acquisition of Austrian Airlines, British Midland, and Brussels Airlines, a quasi low cost which was created following the demise of Sabena.

Air France and KLM were first in Europe in successfully completing their merger. The model they developed has in some ways set the pattern for others to follow.

The Air France/KLM Group has also recently acquired an important participation in Alitalia, which commits the Italian national carrier to become part of their group eventually.

The third European group – comprised of British Airways and Iberia – is now completing its much delayed merger.

Of course, there are many other national airlines that have so far remained independent, but it will be increasingly difficult for all of them not to join one or other of the groups or to participate in some form of merger or, at the very least, some association.

In North America a similar phenomenon is present, and we have recently witnessed the merger of Northwest and Delta Airlines.

United Airlines is completing a merger with Continental Airlines.

And thus, we have three major regroupings of traditional airlines emerging in the U.S. – each aligned with one of the three major European groupings.

Joint ventures across the Atlantic have already been in the making, with the Air France/KLM Group and the Delta/Northwest group concluding a commercial agreement which brings under one umbrella all their respective trans-Atlantic services.

The same approach has been developed by Lufthansa, United/Continental, and Air Canada – and American Airlines and British Airways have also concluded a similar agreement.

All these activities clearly point to setting the stage for a “mega merger” of airline groups on both sides of the Atlantic should that ever be permitted under the U.S./European Community bilateral agreements.

The process of regrouping airlines is going on, as well, in other regions of the world, in particular in Latin America with the activities initially led by the Lan Airlines and TACA, the Central American Airline.

As a case in point, Brazil’s TAM in August of this year announced plans to merge with the LAN Airline Group – which would create the largest airline in Latin America.

Consolidation is also very much contemplated by the low cost airlines … as illustrated by the recent acquisition of AIRTRAN by Southwest Airlines.


It is most interesting that despite the difficulties experienced by national carriers to survive under the pressure of the low costs, new airlines – which could be called “national airlines” – have emerged and are rapidly establishing a position in the international market.

Over the last decade, some small States in the Persian Gulf have developed ambitious new hubs and are actively engaged in expanding their operation into the sixth freedom market which exists between their tiny States on the one hand – and Asia, Europe, and America on the other.

In the Gulf, Emirates based in Dubai, Etihad operating from Abu Dhabi, and Qatar Airways whose operation is in Doha have all ordered large fleets of aircraft.

To illustrate their ambitions, Emirates has put in an order for 90 Airbus A-380s and 70 Airbus A-350s.

In the case of Qatar Airways, they have recently put in an order for 80 Airbus A-350s and five A-380s.

It remains to be seen if, in the present context, these three new airlines based in the Gulf will actually be able to grow and prosper.

The Asian market is growing very rapidly – and this is particularly true for the Indian Sub-Continent and China.

In both of these large regions, well-established champions such as Cathay Pacific, and new rapidly growing international airlines such as Jet Airways of India, are unlikely to stand idle and allow the Gulf carriers to take away their markets.

The availability of new airplanes with long-range capabilities allowing flights to operate directly between Asia, Europe, and North America, for instance, using Boeing B787s and Airbus A-350s, will easily enable any Persian Gulf hub to be bypassed.

This situation suggests that price competition involving those very important Asian markets will likely be very active in the next timeframe.


The recession in Asia has been short-lived and the growth of air traffic is once again nearing double digits.

The Asia-Pacific region has just recently surpassed North America in terms of annual passengers boarded, more specifically, 647 million passengers vs. 638 million passengers in 2009. It is forecast that in a few years from now, the Asia/Pacific region will represent 50 percent of total air traffic worldwide.

The other regions that are also enjoying excellent air traffic growth are South America – particularly Brazil – and of course, the republics that were previously part of the Soviet Union.

And we should not forget about Turkey which, with its large population, is also growing very rapidly.


Lastly, it is worth mentioning another small but growing business model used in addressing the needs of an important segment of air travel demand.

Until the last economic recession, the number of private and corporate jets was increasing rapidly.

Tongue-in-cheek, one might be tempted to say that the increase over the past few years in executive remuneration was driving this expansion!

You may remember images of the U.S. automotive industry’s top brass flying to Washington in their private jets to beg for tens of billions of bailout money to save their respective companies.

The utilization of private airplanes has been made increasingly affordable by various formulae such as “fractional ownership”, or simply by contracting over a period of time with a supplier willing to guarantee aircraft availability, when required.

Additionally, there is no doubt that the security-related hassle – and confusion – at most airports has contributed to the popularity of private and semi-private aircraft which enable the user to largely by-pass this frustrating experience.

Although the economic crisis has dampened this expansion, we should fully expect that this sector will soon recover with vigorous growth.


The most recent forecast published by Airbus Industries predicts that by the year 2028, air traffic demand will have nearly tripled – and that the fleet of passenger aircraft with over 100 seats will have grown from some 14 thousand in 2009 to over 28 thousand … by 2028.

To accommodate this projected growth, congestion of the various infrastructures would be a major issue if not vigorously addressed.

The characteristics of the airports at which you operate can be both a challenge – and a marketing opportunity to exploit.

This has been well understood by the Gulf States, which are planning the expansion of their hub airports to support the growth of their airlines.

One factor helping to fuel airport congestion is the growth of the world’s major cities, coupled with the fact that more people are becoming economically mobile.

This was a major factor in the decision by Airbus to build the A-380.

This “very large airplane” substantially increases the number of passengers which can be carried on any one flight between the mega urban centers.

Equally valid was the strategy developed by Boeing in proposing the B-787-9 – its long range version – aimed at opening new city-pairs and creating many new mid-size hubs.

The other important infrastructure which can significantly affect the quality of our product is air traffic capacity.

Fortunately, the need to modernize both the European and the American air traffic control systems was finally recognized.

The SESAR project proposes to unify Europe’s ATM Systems, create capacity to handle a threefold increase in flight movements, improve safety by a factor of 10, and reduce by 10 percent the environmental impact per flight.

SESAR components and procedures will be progressively implemented from 2010 to 2020.

The U.S.A. Next Generation Air Traffic Management System – NextGen – has been under development for some time and will require some 20 billion US dollars up to 2025 to complete its development.

This new system will introduce cutting edge, satellite-based navigation technologies with more precise flight tracking, provide a single Information Management System, improved data links, and a single weather information system.

The objectives for NextGen are similar to those of SESAR.


Ladies and gentlemen, how do we see the commercial challenges and opportunities for aviation – given the forces at work reshaping the industry?

I believe that we can make the following observations and comments:

First, the good news: we can expect significant market growth:

The desire to travel and see the world – and the need to travel for business reasons – will continue to grow worldwide, which means that.

The industry forecast – calling for traffic to double every fifteen years – is likely to prove correct. I would expect that the industry will carry approximately five billion passengers in 2025.

Much of that growth will come from Asia-Pacific, with China and India providing the lion’s share, and with the other emerging economies likely to be important contributors to that growth.

And, our industry will be much greener:

The combination of new aircraft types with lower fuel burn and maintenance costs as well as improved air traffic control should eventually provide airlines with a 20-25% reduction in operating costs.

The production of biofuels will eventually meet some 50% of the air industry’s requirements.

We will need to continue to adapt our business models:

Europe and North America will continue to move towards a more fully integrated air market

In most regions of the world, low cost airlines will continue this move towards a 50 percent share of the regional/domestic market.

With low cost airlines’ greater maturity and diversity – and legacy carriers’ improved cost discipline – the two business models will increasingly converge.

On the subject of infrastructure:

It is likely that airport capacity will vary considerably from one region to another.

This will always be an important commercial challenge to mitigate – or an opportunity to exploit.

However, I believe that significant improvement in air traffic control capacity resulting from the implementation of the various components of SESAR (Europe) and NextGen (USA) will be achieved.

And finally:

The combination of the electronic networks and sophisticated biometrics will increasingly give air travelers a great deal of control in handling their travel needs, as well as checking and boarding, and including baggage handling at the airport.

While this increases passenger convenience, it also improves airline productivity and costs.


And thus we may have good reason to feel optimistic about the future of our industry. But it is equally obvious that there is no shortage of challenges.

The industry may be recovering from the last economic crisis – but its financial situation remains somewhat fragile.

Our past experience has shown that we continue to fail to learn how to manage through every economic crisis, and unless we do better, the financial situation of the airline industry will not improve.

The drive to increase market share continues to fuel the tendency for the whole industry to provide far too much capacity.

Which brings much pressure to bear on the commercial people who are expected to react on short notice and fill that capacity – without any significant deterioration of the yield!

How does anyone develop a sensible long-term commercial strategy, when the pressure to meet next month’s revenue targets and bottom line objectives can become all-consuming?

As the saying goes …:

“When you got many alligators biting at your ass, it’s hard to remember that you came in to clean the swamp.”

Thus, it seems to me that in the foreseeable future, the battles for the customer will be as fierce as ever.

There is no room for complacency. Keeping ahead of the game will continue to require much ingenuity.

Every sale is important and can count – as long as it generates an incremental contribution to the bottom line.

And of course, we should always remember that we are fundamentally a service industry, and that the human dimension is an important – indeed a central element – of the service we provide.

Understanding your customer is fundamental, and having first hand knowledge – and relations – is invaluable.

The founders of the Ritz Hotel used to say:

“A complaint is an opportunity with a client.”

However, with passengers fully able to handle their own reservations, checking, boarding etc., we may be losing a very important personal contact.

Some airlines are compensating to some extent for this lack of personal contact by making extensive use of web-based social networks.

They are increasingly using “Twitter-like” networks to listen to what their customers have to say – and are also finding this social network to be a good way to promote their fare sales.

Versions of Facebook are likely to be used extensively to keep a personal contact with the traveler, and allow a platform for discussion.

Facebook is now reported to be the most used website by in-flight WiFi users.

Some airlines are also busy developing a variety of i-phone applications to deal directly with their clients.

Unlocking the full power of social media for travel application and services is the latest way of keeping in touch with the customer.

All of which simply adds one more important dimension contributing to the never-ending transformation of our aviation industry – and continuing to make it an exciting world in which to be involved.

Thank you!

Address to the Canadian Aviation Historical Society

The History of Tomorrow Being Made Today
Address to the Canadian Aviation Historical Society
Ste-Anne-de-Bellevue, Canada, June 4, 2010  >>


Mr. President, members of the Canadian Aviation Historical Society, ladies and gentlemen of the aviation community.

I am most honored and very pleased to be associated with this historic event.

An event which celebrates the one hundredth anniversary of this region’s passionate love affair with the world of aviation.

I believe that the genesis of this great interest can be traced back to the first Canadian International Aviation Meeting which was held here in June 1910.

At the closing event, Count Jacques de Lesseps flew his Blériot XI over the city of Montréal – and it is said that this first ever appearance of an aircraft in the Montreal skies generated a considerable amount of emotion and interest.

This was undoubtedly a defining moment in time which has led to the diversity – and the richness – of the aerospace activities that this region is known for today.

And I know that you are very much aware that the greater Montreal region is the home of some 60% of the entire Canadian aerospace industry – and is considered one of the three world centers of this important industrial sector.


I am reminded that Prime Minister McKenzie King once said that the problem with this country was that

“Canada has too much geography … and not enough history”.

But when it comes to aviation, Canada has an impressive history. And in deference to McKenzie King, it would be fair to say that it is the challenges offered by Canada’s geography that has led to the writing of some of the best chapters of Canada’s – and indeed the world’s – aviation history.

As Canadian aviation enters its second century, I can attest that I have been a part of it, in one way or another, for more than half of that period.

In fact when I started in this industry, flying was still a little risky – but I am told that in those days sex was a lot safer!

When I joined Trans-Canada airlines, the Canadair North Stars were the mainstay of the fleet and Lockheed Super-Constellations were opening up more Atlantic routes.

The airline was fulfilling its nation-building role, having taken over from the railroads the task of bringing this country together.

The pioneering efforts of my predecessors have been, I believe, well documented.

They have inspired many of us – and have substantially; contributed to the advancement of aviation worldwide.

As for my modest contribution to aviation history, I believe that the part I played in the development of the famous “Black Box” has been mentioned many times.

What is perhaps lesser known is that I was the first Air Canada executive to integrate and lead all computer systems and communication functions.

Today, you would call this role the Chief Information Officer – the C.I.O.

In that capacity I directed the development and implementation of the first real-time computer reservation system in the world – Reservec II.

For the sake of full disclosure I would need to point out that American Airlines was also developing a real-time computer system in the same timeframe.

There were, however, some significant differences between the two systems, as ours was based on Univac computers and theirs on IBM.


Now let me say, for the record, that during my stewardship of Air Canada which covered the best part of the 80’s (I left the airline in the fall of 1990):

We designed and introduced the first Business Class over the Atlantic and long-haul transcontinental routes

We regrouped, or created, regional airlines in every major part of Canada which today are the founding components of Jazz.

We pioneered the wide-body twin engine aircraft over the Atlantic.

We designed an ambitious international strategy which permitted Air Canada to finally gain access to Asia.

Transforming the then Crown corporation into an airline that could be privatized was, without a doubt, the most significant challenge that I faced as the CEO.

Every facet of the business needed to be addressed:

  • The network needed to be streamlined
  • The fleet modernized
  • Our productivity substantially improved
  • Our balance sheet significantly strengthened
  • Out internal culture completely changed
  • All contracts to be re-negotiated
  • A new strategic plan developed.

In the process I faced three industrial actions or work stoppages in three consecutive years and, as one would expect, spent much energy to minimize the negative impact of public/political opinion which is usually opposed to changes of these magnitudes.

But we prevailed, and that success led to many other Crown Corporations being privatized, like the C.N.R.

There is one other contribution from my days at the helm of Air Canada which I believe may be of interest to mention here.

It is the introduction of non-smoking flights on the Toronto-Montreal sector, in response to the need of a specific market segment.

The announced threat of a boycott by the Tobacco industry gave us tremendous publicity and accelerated the movement against smoking in public places.

I would have to confess that I never imagined at that time that this relatively modest but bold move would have been a triggering event for the widespread ban on smoking which exists worldwide today.


I have always believed that in Canada there was room for only one major international aviation champion.

And I regret that I was unable to convince the government of the time to allow air Canada to lead the required restructuring.

My proposal was for Air Canada to purchase the international route network of Canadian Pacific Airlines, leaving C.P. Air with a much strengthened balance sheet and a domestic network able to provide the kind of domestic competition required by Canada.

Although the same end point has been achieved today, I can assure you that the earlier proposal would have been a lot less painful.


I would be remiss if I did not say anything about my 10 years at the helm of IATA – the International Air Transport Association.

That period has been summarized in a couple of chapters of a recently published biography.

Let me simply say that I take great pride in having been the first and the only Canadian to head this great international institution.

During my tenure I completely transformed this then rather stogie, bureaucratic organization into a customer-oriented aviation cooperative, safety focused – and a strong and respected voice of international aviation.

Let me give you two examples.

When I joined IATA in 1991, the Association’s yearly budget was $50 million USD and the dues paid by the members amounted to $27 million USD.

When I left in 2002, the budget was $300 million USD, the dues had been reduced to $17 million USD and, for that year alone, we achieved a surplus of $28 million USD.

The second example is about the role of IATA on the important subject of safety and accident prevention.

In 1991, IATA considered that it had no jurisdiction on this matter – which is technically correct.

The role of reinforcing safety measures was to be left in the hands of ICAO, the FAA, and the other government authorities.

I took a different view. As an Association of airline operators, I believed that safety should, in fact must be – IATA’s number one priority.

I will spare you the efforts which were required to change that mentality, but it will be sufficient to say that by 1995, at the IATA General Assembly, the membership accepted the objective to develop – and implement – programs designed to reduce the accident rate by half over the next ten years.

I am very pleased to say that that objective was reached by 2005!


But enough reminiscing.

Now the past is important – not only because of the lessons and the great memories it provides us – but perhaps more importantly because it contains the seeds of what will become our tomorrow.

It may be an obvious observation to state that “the future starts today”.

But when it comes to the future shape of our industry, I believe that if we take a look at the decade just ending, we should begin to see the forces which are in the process of reshaping our world.

I am convinced, if it is not already obvious, that the passage of time will confirm that this first decade ushered in the dawn of a new era in aviation.

The first decade of the new millennium was characterized by, among others:

  • Some spectacular attacks by kamikaze terrorists
  • A sudden and highly disruptive oil crisis
  • The continued pressure to meet consumer demand – and the progress achieved worldwide in liberalizing air markets
  • A deep economic recession which lingers on
  • The rapid economic growth of Asia, more particularly the economies of India and China
  • World-wide recognition of our contribution to climate change and, more specifically, of the need for aviation to reduce its carbon foot-print

All of these factors, and more, are irrevocably changing – and redefining – commercial aviation.


On the matter of the environment, the industry has set a target of zero increase in CO2 contributions by 2025.

Since we continue to project that traffic will double over the next fifteen years, it would mean that by then our CO2 emission per passenger/kilometer would have been reduced by 50%!

This is a very ambitious target which requires, among other things, that we accelerate the development – and mass production – of new fuels.

The aviation industry is embracing biofuel as the solution, and numerous initiatives are being undertaken to test and produce sustainable aviation biofuel.

Airlines and aircraft manufacturers are heavily involved in testing various alternatives, and several airlines have operated flights with a 50% blend of biofuel and conventional aviation fuel.

In the U.S.A. the Air Transport Association, ATA, and a division of the Department of Defense have formed a partnership for:

“The development and deployment of commercially viable,
environmentally friendly, alternative aviation fuel.”

Approval for a new class of fuels is expected in the second half of this year.

It is a huge requirement. The U.S. airline industry and the DoD collectively require more than 1.5 million barrels of fuel per day.

The results – in terms of carbon emission – of using various biofuel have been most exciting, with savings of up to 95% compared to fossil-fuel derived jet kerosene.

Additionally, a recent study endorsed by Boeing and an industry team concluded that a fuel blend of 50% petroleum-based jet fuel and sustainable biofuel gave excellent results.

The fuel blend met or exceeded all parameters required such as fuel freezing and flashpoint, etc. with no adverse effect on engine or components.

The study concluded, as well, that the fuels have greater energy content and could potentially lower fuel consumption per mile.


Naturally, we also expect that the new aircraft models will play an important part in the achievement of the carbon emission reduction targets.

The airline industry has been asking for new airframe and powerplant combinations capable of delivering fuel burn improvements in the neighborhood of 20%.

The significant increase in the use of composite material, improved aerodynamics, and more efficient engines, are likely to help us meet that level of improved performance over the next 15 to 20 years for the whole fleet.

Unfortunately launch and production delays have significantly hampered fleet renewal.

The Airbus A-380 has met – or exceeded – its expected performance in terms of dispatch reliability, noise, operating costs, and fuel burn.

But the manufacturer has yet to master the challenge of ramping up production.

Last year only ten Airbus A-380 were produced – and the hope is that the rate can be increased to 20 for this year (more than 140 were sold).

As a result of the delayed introduction – and the much lower than anticipated production rate – the program will remain a financial liability and will probably never recover its costs.

Extensive delays and additional cost have also plagued the introduction of the new Boeing B-787 – the so-called “Dreamliner”.

This airplane is still undergoing acceptance flight testing – and will not start delivery before the Fall of this year.

At this time, there is no reason to believe that this new family of airplanes will not fully meet expectations and offer savings of the order of 20% – or better – in operating costs and fuel consumption.

The standard version – the B-787-8 – with a seating capacity of 210 to 250, is expected to replace the Boeing B-767-300ER and the Airbus A-310.

The longer range and higher capacity version, able to accommodate from 250 to 290 seats, will enable many new route to be opened where today the market is too thin to be economically served by a Boeing B-777-300ER or an Airbus A-340-500/600.

Not to be outdone, Airbus has been developing a new long-range wide-body – the A-350 series – which once again promises to improve significantly on its current A-330 and A-340s.

The A-350-1000 – its larger, long range version – hopes to render obsolete some Boeing B-777 models.

The Airbus A-350-800 would be aimed at competing advantageously with the bigger version of the “Dreamliner”, more specifically the B-787-9.

And thus, the profile of the wide-body, long range, international fleet likely to be in service over the next twenty years or so, is already well known.

The airframe will be largely made of composite material; the aerodynamics will have been further refined; the engines will provide substantial improvements in fuel burn; safety and dispatch performance will be higher, resulting in further improvements in reliability and maintenance costs.


But what about the single-aisle, narrow-body fleet?

The two major aircraft manufacturers – Airbus and Boeing – are unlikely to launch into the design and development of a totally new narrow-body aircraft any time soon.

The primary reason is that they both need to complete their respective wide-body programs – and reap some of the resulting financial benefits – prior to committing to some other very costly development.

And secondly, they both should be extremely reluctant in developing, at this time, an entirely new narrow-body aircraft – which would render obsolete their very successful lines of A-320s and B-737 Next Gen.

Both lines continue to sell very well, and the only concern on the horizon would be whether the Bombardier “C” Series is likely to gain momentum and carve up a significant share of the bottom end of the two well-established single-aisle families.

Still another important question is whether both major manufacturers are satisfied with the engines which could be made available for a new narrow-body aircraft.

Wisely, Bombardier delayed its launch decision until it was assured that Pratt and Whitney could guarantee the availability of a new engine.

The Pratt and Whitney 1000G Geared-Turbo-Fan, which claims to deliver 12 to 15 percent lower fuel burn, was simply crucial to the “C” Series promise of 20 percent improvement over existing A-320 and B-737 NextGen current models.

Now CFM International has also proposed to enter the narrow-body engine market of the future with its LEAP-X, which borrows on the technology developed for the G.Enx engine.

CFM claims that the LEAP-X will also deliver 12 to 15 percent better fuel burn.

There seems to be a consensus that neither Airbus nor Boeing will come up with a “clean-sheet” design for a narrow-body series before 2024-2025.

However, both manufacturers are today seriously examining what they would need to do to put new engines on an upgraded version of their aircraft – raising the prospect of a modernized, re-engined A-320 and B-737 family emerging some five years from now.

A key question would be whether they would move now or wait for a second generation already proposed by Pratt & Whitney for its Geared-Turbo-Fan.

The decision by the major manufacturers to offer a re-engined A-320 – and B-737 – five to six years from now will undoubtedly reduce the market share the “C” Series of Bombardier is hoping to capture.

Airbus believes that a re-engined A-320 would improve fuel burn, per seat, by 13 to 15 percent.

The market share of the “C” Series will be very much affected by the timing of the re-engining decision, the price of fuel and whether – following re-engining – the “C” Series would still benefit from a 10 percent or so fuel burn advantage.

One way or another, the composition of the world’s airline fleet over the next 15 to 20 years is already clearly evident.


Worldwide deregulation of air markets has progressed rather slowly – but steadily.

In contrast to some other industries, there was no “big bang” – nor has the subject ever been discussed seriously at the World Trade Organization.

The genesis of deregulation can be traced back to the initiative of the Carter Administration, in the late 1970’s, to liberalize the U.S.A. domestic market.

This was quickly followed in Canada with the White Paper of the Mulroney Government entitled “Freedom to Move” – which set the stage to totally free up the domestic Canadian market.

During the 1990’s the European Community – also through a staged process – created an integrated air market.

Internationally, the U.S.A. “Open Sky” initiative endeavored to negotiate air bilateral agreements which removed any constraints as to pricing, capacity, or points served between the U.S.A. and other countries.

This type of highly liberalized air bilateral agreement has progressively become the norm in most of the air bilaterals being negotiated today.

The globalization of trade, the rapidly increasing use of electronic networks potentially linking all human beings have all contributed to the emergence of the global village which favors – and supports – greater worldwide liberalization of the air markets.


And thus powerful forces are at work re-shaping the profile of the aviation industry.

New business models have emerged; previous business models have had to question their relevance and redefine their roles.

One thing is quite clear: the days of government-owned national airlines are over.

A nation can no longer afford the luxury of subsidizing a flag carrier.

The constraints of government ownership – and the inefficiencies that came with it – render such an organization incapable of coping successfully with the intensely competitive environment which today characterizes our industry.

One of the significant factors that has forced the re-structuring of the traditional network has been the emergence – and the surprising strength – of the so-called “low cost” carriers.

Southwest Airlines – which came into pre-eminence in North America during the 80’s – is generally considered the “grand daddy” of the low costs.

During the aftermath of the U.S. deregulation many new carriers came into being -attempting to follow the Southwest model.

Most were unable to survive past the next economic recession.

It was up to Europe to re-launch the concept. New carriers such as Easyjet, Ryanair, and others gave the low cost model new impetus.

Today, low cost carriers have established a presence in every region of the globe, exerting strong competitive pressure on the more traditional airlines.

The speed with which the low costs imposed themselves in the market place has to some degree taken the traditional carriers by surprise.

They have been compelled to redefine their presence in the market and to adjust their domestic and regional networks.

The growth of the “low cost” carriers has been nothing short of remarkable.

A recent study published by the Centre of Asia-Pacific Aviation indicates that the total growth of the world capacity deployed since 2001 is equal to the growth experienced by the “low costs”.

Indeed, over the same period, the capacity offered by the traditional airlines was slightly diminished.

And the number of seats flow by the “low costs” grew from 7 percent to 22 percent of the total!

Not every new entrant has been successful but still – by the end of last year -approximately two thirds of all newcomers since 2000 had survived.

Which means – adding up the players present in all the regions of the world – that some 128 “low costs” were in operation.

What makes the “low cost” business model so successful is, of course, the simplicity of its operation.

It is a no-frills service – a single class, one type of aircraft only, with high-density seating and high aircraft daily hour utilization.

A low cost generally has low overhead, few fixed costs, extensively out-sources, employs younger, lower-paid employees – and distributes its products almost exclusively through electronic media.

Recent experience has evidenced the fact that low-cost carriers are more affected by sudden fuel cost increases than the traditional airlines.

This is simply because fuel represents a much larger component of their operation costs – and consumer resistance makes it that much more difficult to pass on the increase to the traveler.

On the other hand, the traditional airlines are more affected by an economic recession because many companies tend to implement cost-cutting measures which temporarily reduce traveling – and/or require their management to travel Economy rather than Business Class.


Buffeted by extensive competitive forces and to take advantage of the new flexibilities offered by the more recent regional economic integrations, several traditional airlines have decided to re-group – or merge – to ensure their survival.

The question appears already largely settled in Europe where, for all intents and purposes, most of the so-called “national carriers” have joined one of the three distinct airline groups respectively led by Lufthansa, Air France, and British Airways.

Lufthansa, which earlier absorbed Swiss International, the former Swissair, has more recently completed the acquisition of Austrian Airlines, British Midland and Brussels Airlines, a quasi low cost created following the demise of Sabena.

Air France and KLM were first in Europe in successfully completing their merger. The model they developed has, in some ways, set the pattern for others to follow.

The Air France/KLM Group has also recently acquired an important participation in Alitalia, which commits the Italian national carrier to become part of their group eventually.

The third European group, comprised of British Airways and Iberia, is now completing its much delayed merger. The difficulties experienced by British Airways – not the least being pension liabilities – have among many other things complicated the merger process.

Of course there are many other national airlines that have so far remained independent, but it will be increasingly difficult for all of them not to join one or other of the groups or to participate in some form of merger.

In North America a similar phenomenon is present – and we have recently witnessed the merger of Northwest and Delta Airlines.

United Airlines – having failed on many occasions to arrive at a satisfactory arrangement with US Air – is completing a merger with Continental Airlines.

Following the merger of Northwest and Delta, Continental – which was previously allied to Northwest – felt somewhat like an orphan.

It is already clear that three major traditional airlines regroupings are emerging in the U.S., each aligned with one of the three major European groupings.

Joint ventures across the Atlantic have already been in the making, with the Air France/KLM Group and the Delta/Northwest group concluding a commercial agreement which brings under one umbrella all their respective trans-Atlantic services.

The same approach is being developed by Lufthansa, United/Continental and Air Canada – and it would be surprising if American Airlines and British Airways do not chose to conclude a similar agreement.

All these activities clearly point to setting the stage for a “mega merger” of airline groups on both sides of the Atlantic, should that ever be permitted under the U.S./European Community bilateral agreements.

Where does this leave Air Canada?

Air Canada is today an important member of Star Alliance. Its strongest partner is the Lufthansa Group, and its largest partner is United Airlines. The current bilateral agreements preclude the possibility of Air Canada being acquired by – or for that matter acquiring – another non-Canadian airline.

If we assume that eventually cross-border mergers will be permitted, it is important for Air Canada to substantially strengthen its financial position in order to ensure that it can be an important player in any potential cross-border merger in the future.

The process of regrouping airlines is going on, as well, in other regions of the world – in particular in Latin America with the activities have been led by the Lan Airlines, TACA (the Central American airline), and the restructuring that has been ongoing in Brazil.


It is most interesting that despite the difficulties experienced by national carriers to survive under the pressure of the low costs, new airlines which could be called “national airlines” have emerged and are rapidly establishing a position in the international market.

Over the last decade, three small States in the Persian Gulf have developed ambitious new hubs and are actively engaged in expanding their operation into the sixth freedom market which exists between their tiny States on the one hand – and Asia, Europe and America on the other.

Emirates (based in Dubai), Etihad (operating from Abu Dhabi) and Qatar Airways whose operation is in Doha have all ordered large fleets of aircraft.

To illustrate their ambitions, Emirates has put in an order for 53 Airbus A-380s and 70 Airbus A-350s.

In the case of Qatar Airways, they have recently put in an order for 80 Airbus A-350s and five A-380s.

It remains to be seen if, in the present context, these three new airlines based in the Gulf will actually be able to grow and prosper.

The Asian market is growing very rapidly – and this is particularly true for the Indian Sub-Continent and China. In both of these large regions, international airlines are growing and are likely to become stronger.

The availability of new airplanes with long-range capabilities allowing flights to operate directly between Asia, Europe and North America, for instance – using Boeing B787s and Airbus A-350s – will easily enable any Persian Gulf hub to be bypassed.

This situation suggests that price competition involving those very important Asian markets will likely be very active in the next timeframe.


The recession in Asia has been short-lived and the growth of air traffic is once again nearing double digits.

The Asia-Pacific region has just recently surpassed North America in terms of annual passengers boarded – more specifically, 647 million passengers vs. 638 million passengers in 2009. It is forecast that in a few years from now, the Asia/Pacific region will represent 50 percent of total air traffic worldwide.

The other regions that are also enjoying excellent air traffic growth are South America – particularly Brazil – and of course the republics that were previously part of the Soviet Union.

And we should not forget about Turkey which, with its large population, is also growing very rapidly.

Canada – with its relatively modest population growth and very mature air market – is likely to see its relative weight in terms of air traffic diminish on the world scale.


Lastly, it is worth mentioning another small but growing business model used in addressing the needs of an important segment of air travel demand.

Until the last economic recession, the number of private and corporate jets was increasing rapidly.

Tongue-in-cheek, one might be tempted to say – that the more recent increase in executive remuneration was driving this expansion!

You may remember images of the U.S. automotive industry’s top brass flying to Washington – in their private jets – to beg for tens of billions of dollars of bailout money to save their respective companies.

The utilization of private airplanes has been made increasingly affordable by various formulae such as “fractional ownership” – or simply by contracting over a period of time with a supplier willing to guarantee aircraft availability when required.

For instance, NetJets – with a fleet of over 800 aircraft – can provide you access to thousands of airports on request, if you have contracted with them – with guaranteed availability within four to ten hours, when and where you need it.

Additionally, there is no doubt that the security-related hassle and confusion at most airports has contributed to the popularity of private and semi-private aircraft which enable to user to largely by-pass this frustrating experience.

Although the economic crisis has dampened this expansion, we should fully expect that this sector will soon recover with vigorous growth.


The most recent forecast published by Airbus Industries predicts that by the year 2028 air traffic demand will have nearly tripled and that the fleet of passenger aircraft with over 100 seats will have grown from some 14 thousand in 2009 – to over 28 thousand in 2028.

To accommodate this projected growth, congestion of the various infrastructures will be a major issue – if not vigorously addressed.

One factor helping to fuel this congestion is the growth of the world’s major cities – coupled with the fact that more people are becoming economically mobile.

This, you may recall, was mentioned as a major factor in the decision by Airbus to build the A-380.

This “very large airplane” substantially increases the number of passengers which can be carried on any one flight between the mega urban centers.

Equally valid was the strategy developed by Boeing in proposing the B-787-9, its long range version aimed at opening new city-pairs and creating many new mid-size hubs.

Fortunately, the need to modernize both the European and the American air traffic control systems has finally been recognized.

SESAR is the European 1.9 billion Euro initiative which is involving the European Community, Eurocontrol and 16 partners – institutes, airports, firms – over a seven year period.

The SESAR project will unify Europe’s ATM Systems; create capacity to handle a threefold increase in flight movements; improve safety by a factor of 10; and reduce by 10 percent the environmental impact per flight.

SESAR components and procedures will be progressively implemented from 2010 to 2020.

The U.S.A. Next Generation Air Traffic Management System – NextGen – has been under development for some time.

The new system will introduce cutting edge, satellite-based navigation technologies with more precise flight tracking.

NextGen will provide a single infrastructure and Information Management System, improved data links, and a single weather information system.

It is projected that NextGen will need a further $20 billion US up to 2025 to complete its development.

The objectives for NextGen are similar to those of SESAR – with the FAA claiming that the new system will save up to $2 billion US dollars per year in fuel.


What can we conclude regarding the future evolution of commercial aviation, given the forces at work reshaping the industry?

Or if you prefer, if we were holding this conference in 2025 – what would we be able to write about our recent past?

I believe that we would be able to observe the following:

The desire to travel and see the world – and the need to travel for business reasons – has continued to grow worldwide.

Our earlier forecast – calling for traffic to double every fifteen years – has proven correct and we carried approximately five billion passengers in 2025.

Much of that growth has come from Asia-Pacific, with China and India providing the lion’s share.

However the CIS countries – the former Soviet Republic as well as Latin America and the Middle East – are also important contributors to that growth.

Europe and North America have implemented an integrated air market

This new EC-North America air bilateral has enabled European and North American airlines to hold merger discussions.

In most regions of the world, low cost airlines have achieved a 50 percent share of the regional/domestic market.

Driven by renewed economic affluence, the number of private and corporate airplanes operating in fractional ownership mode or its equivalent has more then doubled.

An increasing number of companies have found that contracting for a certain number of hours per year to make private jets available for their executives, on demand, to be cost-effective in the midst of the rapid acceleration of business globalization.

Significant improvement in air traffic control capacity resulting from the implementation of the various components of SESAR (Europe) and NextGen (USA) have been achieved.

Unfortunately as in most government driven programs, costs far exceeded the original estimates.

Non-military use of unmanned aircraft has been increasing causing safety concerns and a potential increase in air traffic congestion.

Biofuels have become firmly established and have become the new norm for both commercial aviation and military use.

The production of biofuels is now targeting some 50% of the air industry’s requirements. Traditional petroleum companies have invested heavily in this new industry.

I leave you to imagine the resulting impact on the tar sands and some of the more expensive off-shore and arctic oil operations.


The combination of the electronic networks and sophisticated biometrics have given air travelers full control in handling their travel needs, as well as checking and boarding at the airport.

While they have been doing their own seat reservations for many years, the printing of boarding cards was discontinued as travelers are now simply biometrically scanned to allow boarding at the gate.

Similarly, a chip on their baggage will automatically identify the luggage with the traveller and ensure that it is routed appropriately.

This has led to a virtual disappearance of airline customer service staff at airports.

Airlines however have compensated to some extent by making extensive use of web-based social networks.

Airlines have been using Twitter-like networks to listen to what their customers have to say – and have also found this social network to be a good way to promote their fare sales.

A version of Facebook is also used extensivelyto keep a personal contact with the traveler and provides a platform for discussion.

As a result of greater use of their partly customized social network, this way of reaching the customer has diverted much of the funds and resources previously allocated to the more traditional channels of marketing and advertising.


Ladies and gentlemen

Back in 2010 we observed that the airline industry had lost more money than it had ever made over its entire history.

Some of you may recall that we were at that time in the aftermath of a very painful and prolonged economic recession which had been triggered by a disastrous financial crisis.

The airline industry recovered over several years – but its financial situation remained somewhat fragile.

Since then we have suffered two more economic recessions, and having failed yet again to learn how to manage through these crises, the financial situation of the airline industry has not improved.

I seem to recall that back in 2009, Warren Buffet – the famous financial guru from Omaha – was asked what he thought of the airline industry.

Mr. Buffet was reported saying:

“If someone had taken the initiative to shoot down the first flight of the Wright Brothers, that person would have rendered a great service to the financial community.”

You may also recall that Warren Buffet had made a substantial investment at the time in a railroad, which later paid him handsomely.

It is somewhat puzzling that despite benefiting from

  • Spectacular periodic technical progress
  • Use of the latest procedures and techniques
  • Constant gains in productivity
  • Adaptation of its business models

the industry has completely and consistently failed to earn its cost of capital.

The airline industry has constantly defied economic logic – the logic which suggests that in periods of economic crises and instability, the weak and loss making companies leave the market.

The disappearance of some companies normally brings supply and demand back into equilibrium, which eventually allows prices to increase and permits the survivors to achieve an adequate return on investment.

But the airline industry has rarely reached such a point of equilibrium – and when it did it lasted only for fleeting periods.

The drive to increase market share continues to fuel the tendency for the whole industry to provide far too much capacity.

And government-run export credit agencies have continued to make airplanes more available than the financial system would normally permit.

Thankfully, an increasing number of air carriers – and that includes Air Canada – have shown that it is quite feasible to be consistently profitable, giving signs that maturity is setting in.

But despite those encouraging signs, for a large number of airlines their shareholders should be reminded that an airline stock is still one of those where the only sure way to make money is to buy it when it’s low – and sell it when it is high.

But perhaps those shareholders should console themselves by remembering that they are contributing to a great industry which is a very unique human endeavor – and which has brought enormous socio-economic benefits to the world.

Without the continuous, safe and dependable operation of the global airline network, worldwide business and trading would collapse – with untold economic consequences.

This has been amply demonstrated each time airline operations have been interrupted for one reason or another.

Despite having become such a large mass transportation business, flying has managed to remain for many of us a fascinating and wonderful experience.

We have learned to defy the laws of gravity – and in the process opened the door to space travel.

Finally ladies and gentlemen let me say, in retrospect, that I have very much enjoyed every minute of the many years that I have been part of this industry.

It may not be one where everyone can make “real money” but one can usually earn a “decent living” – and you are guaranteed to have lots of fun!

I feel honored and privileged to have been asked to address your 115th anniversary of the first meeting in Montreal …

And given my advanced age, I must say that I am quite grateful that I am still around.

Thank you

Address to the Club économique Québec-France

L’aviation: Paradoxes et paradigmes
Allocution de Pierre J. Jeanniot au Club économique Québec-France
Paris, France, 25 Mars, 2010  >>


Monsieur le Délégué général du Québec
Membres du prestigieux Club économique Québec-France
Distingués invités et chers amis

Je tiens en tout premier lieu à remercier le Délégué général du Québec, notre bon ami Wilfrid-Guy Licari, pour son aimable invitation.

Je tiens à lui dire combien je suis honoré d’être ici aujourd’hui, et d’avoir le plaisir de m’adresser à ce prestigieux forum économique.

Je suis également particulièrement heureux et reconnaissant de voir ce soir les visages familiers de plusieurs personnalités avec lesquelles j’ai eu le privilège de collaborer à l’un où l’autre moment de ma carrière.

Une carrière qui, malgré mon jeune âge, dépasse largement le demi-siècle.

Pour emprunter à Charles Aznavour qui à cette époque venait de composer « La Bohème », je pourrais vous dire à l’instar de Charles :

« Je vous parle d’un temps que les moins de cinquante ans ne peuvent pas connaître ».

Les voyages en avion en ce temps-là n’étaient pas aussi sécuritaires qu’aujourd’hui. Par contre, on rapporte qu’à cette époque l’amour libre comprenait moins de risques qu’aujourd’hui.


Il y a des moments dans la vie des gens qui sont tout simplement déterminants sur l’évolution de leurs vies – qui marquent un tournant important, qui ouvrent une nouvelle voie, ou simplement une soudaine accélération.

Il en est de même pour une industrie ou pour une région.

Il y a cent ans, ou plus exactement du 24 juin au 2 juillet 1910, se tenait en banlieue de Montréal, sur une ferme de Pointe-Claire, le premier congrès international de l’aviation.

Lors de la clôture de ce congrès, soit le 2 juillet 1910, a eu lieu un survol pour la première fois de la Ville de Montréal par un avion.

Il s’agit d’un vol effectué par le Comte Jacques de Lesseps au-dessus de Montréal dans un Blériot XI qu’il avait amené par bateau, évidement, pour faire des vols de démonstration en Amérique du Nord.

Jacques de Lesseps était le fils aîné du non moins célèbre Ferdinand de Lesseps, le concepteur du Canal de Suez !

Il va sans dire que ce premier vol avait créé beaucoup d’émoi chez les Montréalais !

C’est peut-être ce premier congrès et ce premier survol qui a été l’élément déclencheur et donc le début d’un grand intérêt pour l’aérospatiale devenue depuis une longue tradition au Québec.

Il est clair que dès ces tout débuts les Montréalais et les Québécois se sont passionnés pour l’aviation, et grâce à cet intérêt soutenu nous avons aujourd’hui la richesse et la diversité des activités aérospatiales que nous connaissons.

Je n’ai pas besoin de vous rappeler que le Québec regroupe près de 60 % de toute l’industrie canadienne aérospatiale, et que Montréal et ses alentours est considérée comme un des trois pôles mondiaux de cette importante industrie.

Je signale en passant que Jacques de Lesseps s’était vu confier, quelques années plus tard, un contrat du gouvernement du Québec pour établir par les airs une cartographie détaillée de la péninsule gaspésienne.

C’était peut-être là aussi précurseur de l’entente sur la reconnaissance mutuelle des compétences entre la France et le Québec, un sujet favori de notre Premier Ministre Jean Charest.

Notre pays, de par sa géographie quelque peu hostile et son climat rigoureux, nous a imposé d’importants défis.

L’aviation nous a aidés à y répondre en construisant des appareils pouvant se poser sur nos innombrable lacs, en hiver comme en été, avec flotteurs ou skis !

Mais il fallait aussi des hommes intrépides, des nouveaux pilotes prêts à inventer de nouvelles techniques.

Je m’en voudrais de ne pas souligner ici les formidables contributions de pionniers, tel que Roméo Vachon qui a pour ainsi dire inventé l’art de l’aviation de brousse au Québec et au Canada, et dont les techniques d’opération en terrain difficile nous ont valu une réputation mondiale.


Notre Délégué général a eu l’amabilité de rappeler qu’un ouvrage biographique vient d’être publié à mon sujet par deux éminents professeur et chercheur de l’École des Hautes Études Commerciales de l’Université de Montréal.

Il m’a suggéré de vous parler brièvement de quelques aspects de mes contributions à l’aviation commerciale, ainsi que quelques réflexions sur l’aviation aujourd’hui et son évolution.


On m’a souvent accusé d’être l’inventeur de « la boîte noire ».

Vous aurez évidement compris qu’il s’agit de cette enregistreuse de vol que l’on recherche frénétiquement suite à un accident d’avion afin de bien comprendre ce qui s’est passé.

À l’instar de bien autres inventions, la fameuse boîte noire est le fruit d’une évolution où plusieurs ont contribué.

Je crois qu’il est difficile pour quiconque d’en revendiquer la paternité.

Depuis la fin des années 1950, il existait aux États-Unis une petite enregistreuse de vol qui notait sur une bande d’aluminium à l’aide d’un stylus de métal six paramètres soit l’heure, la vitesse de l’appareil, sa direction, son altitude, et son inclinaison ainsi que la pression à l’intérieur de la cabine.

En 1958, Air Canada avait installé cette enregistreuse dans sa flotte de DC-8 et de Vanguard.

Malheureusement lors d’accidents d’avions, la feuille de métal sur laquelle étaient gravées les données était soit détruite, soit rendue illisible, parce qu’elle n’avait pas résisté à la force de l’impact ou à l’intensité du feu qui souvent accompagne ces accidents.

Ce fut malheureusement le cas lors de l’écrasement d’un DC-8 d’Air Canada le 29 novembre 1963, peu de temps après son décollage de l’aéroport de Montréal.

La petite enregistreuse avait été pulvérisée !

Peu de temps après l’accident de ce DC-8, une petite firme anglaise était venue proposer à Air Canada un magnétoscope analogique, qui avait la capacité d’enregistrer jusqu’à concurrence de 90 paramètres à toutes les trois secondes.

Ils affirmaient que ce nouveau système pourrait grandement aider à faire de l’entretien préventif.

La haute direction d’Air Canada avait fait l’acquisition d’un bon nombre de ces systèmes et, sans avoir vérifié suffisamment leur efficacité, m’avait chargé de procéder à leur installation et à développer le mode d’emploi.

Assez rapidement, je suis arrivé à la conclusion que la merveille britannique n’était absolument pas fonctionnelle.

Le rapport de mon évaluation fut fort mal accueilli par mes supérieurs, et j’en demeurais très inquiet.

Après tout, il n’est pas rare que le porteur de mauvaises nouvelles soit exécuté !

On dit parfois que la nécessité est la mère de l’invention, et quelques jours plus tard m’est soudainement venue l’idée que cette enregistreuse – inutile pour faire l’entretien préventif – pourrait sans doute être utile en cas d’accident.

Mais il faudrait trouver une façon de protéger l’enregistrement pour qu’il survive à un écrasement, et choisir les paramètres les plus appropriés.

L’inventeur fut très heureux de coopérer, et quelques mois plus tard nous avions conçu une sphère pouvant résister au choc et au feu, dans laquelle la bande enregistrée serait installée …

Quelque deux ans plus tard, une deuxième enregistreuse fut ajoutée – celle-ci enregistrait la voix.

Quarante ans plus tard dans un discours en quittant la direction de l’IATA, j’ai déclaré que la « boîte noire » telle qu’encore conçue aujourd’hui était obsolète.

Je disais alors que l’avènement des communications par satellites permettait, d’ores et déjà, le transfert des données contenues dans la « boîte noire » instantanément au moment d’un événement critique, sans avoir à rechercher l’enregistreuse.

La perte d’un long courrier d’Air France l’été dernier dans l’Atlantique Sud semble avoir remis ma suggestion à l’actualité.


Le deuxième sujet que je me propose d’aborder en est un que j’ai choisi avec beaucoup d’hésitation à cause de l’émotivité qui a entouré ce sujet , et qui d’ailleurs l’entoure encore toujours.

Il s’agit de l’interdiction de fumer dans les lieux publics.

Pour ceux d’entre vous qui aimez encore griller une cigarette ou un bon cigare après un grand repas, je dois vous dire que j’étais très loin de m’imaginer que l’interdiction de fumer sur quelques vols d’Air Canada allait progresser – je devrais probablement dire « dériver » – au point d’activer encore aujourd’hui de chaudes controverses.

Comme par exemple dans les bistrots et restaurants parisiens.

Au début des années 1980, je recevais quotidiennement des plaintes de clients qui jugeaient que la division en cabine entre espace fumeurs et non- fumeurs n’était pas satisfaisante.

Ces clients exigeaient – ni plus, ni moins – des vols non-fumeurs.

En réponse j’avais commandé plusieurs études de marché à mon équipe de marketing, mais chaque fois l’étude indiquait que des vols non-fumeurs nous feraient perdre de l’argent.

C’était sans doute une coïncidence que la grande majorité des membres de l’équipe de marketing était des fumeurs !

Passant outre ces savantes analyses, je décidai de suivre mes intuitions.

J’ai donc convoqué l’équipe de marketing pour leur annoncer qu’en dépit de leurs études, j’avais décidé que la moitié des 26 vols quotidiens entre Toronto et Montréal serait dorénavant non-fumeurs – et ce pour une période expérimentale de trois mois.

Il me semblait que le choix devait satisfaire tout le monde.

Aussitôt l’annonce lancée, des réactions positives – et négatives – ne se firent pas attendre.

Les associations reliées à la lutte contre le cancer furent les premières à saluer chaleureusement l’initiative.

Chez les opposants – tout aussi militants – Paul Paré, le PDG de la société IMASCO, avait pris le leadership de la contestation et il annonça dans une déclaration publique que toute l’industrie du tabac avait décidé de boycotter Air Canada.

Il est utile de rappeler qu’IMASCO, qui contrôlait le plus important fabriquant de cigarette au Canada, Imperial Tobacco, avait diversifié ses activités et possédait également une chaine de pharmacies, aussi qu’une compagnie d’assurance.

Dans la semaine suivant l’annonce du boycott, j’avais reçu 162 lettres d’appui qui indiquaient que, si le boycott se maintenait, ces mêmes gens étaient prêts à boycotter toutes les autres activités d’IMASCO.

J’invitai Paul Paré à déjeuner a fin de discuter de la situation.

Au début du déjeuner, Paul Paré réitéra sa position avec véhémence.

J’écoutais patiemment, et lorsqu’il se fut un peu calmé je lui ais dit que je n’avais aucunement l’intention de prendre position pour – ou contre – la cigarette.

Je n’avais d’ailleurs pas les compétences pour le faire.

À mon avis, il s’agissait simplement d’une question de segmentation du marché.

Après tout, ne devrions-nous pas laisser le marché décider ?

Et à ce moment là … je lui remis … une copie des 162 lettres de clients et des diverses associations … qui appuyaient l’introduction des vols non-fumeurs.

Je lui fis remarquer qu’un grand nombre de ces lettres affirmaient que si IMASCO mettait à exécution son boycott d’Air Canada, ceux-ci boycotteraient à leur tour tous les produits d’IMASCO – en particulier ceux des pharmacies et des compagnies d’assurance.

Que devrais-je leur répondre ?

Paul Paré comprit rapidement qu’un boycott de ses compagnies d’assurance et de la chaîne de pharmacies représentait des millions de dollars de chiffre d’affaires menacés.

Il demanda quelques semaines de réflexion pour revoir la situation avec ses partenaires.

Et quelques semaines plus tard tout était rentré dans l’ordre et la menace de boycott avait tranquillement disparu.

Contrairement à une perte de clientèle, Air Canada eut la satisfaction d’accroître sa part de marché de 5 % sur Toronto-Montréal dans les semaines qui suivirent.

Le gouvernement canadien décida l’année suivante d’emboîter le pas et décréta que dorénavant tous les vols au Canada d’une durée d’une heure et demie ou moins seraient non-fumeurs.

Comme aurait dit Shakespeare « The rest is history », et comme chacun peut le constater, à toutes fins pratiques, mondialement, tous les vols sont non-fumeurs – et quelles que soient leurs durées.


Parmi les autres tournants de l’histoire de l’aviation commerciale dans lesquels j’ai eu une participation active, je pourrais vous citer aussi, par exemple, la création de la classe affaire.

Le service de marketing, qui s’était remis de sa déconfiture dans la question des vols non-fumeurs, avait identifié un segment de plus en plus important du marché qui était insatisfait du service offert.

Il s’agissait, évidement, des gens d’affaires qui ne pouvaient accepter de payer le prix d’une première classe mais qui, par contre, avaient besoin de plus de confort que ce qui était disponible en classe économique.

L’introduction d’une troisième classe posait de sérieux problèmes de réaménagement de la cabine afin de créer un espace et une ambiance propice aux gens d’affaires.

Suite à une première introduction difficile suivie d’un « « recalibrage », cette nouvelle classe avait trouvé le niveau de prix-qualité qui répondait aux attentes des gens d’affaires.

Nos efforts furent récompensés non seulement par une meilleure recette unitaire, mais aussi par des gains de part de marché sur les vols transatlantiques et les longs courriers en Amérique du Nord.

Finalement, l’attribution à Air Canada par l’autorité à l’époque – soit le « Air Transport World » – du trophée de la meilleure ligne aérienne au monde en 1985 pour l’excellence de son service à la clientèle vint couronner nos efforts.


Je crois que je pourrais aussi essuyer le blâme pour l’introduction des programmes de fidélisation, quoique je partagerais volontiers tout reproche à ce sujet avec mon ami Bob Crandall à l’époque PDG d’American Airlines.

Le programme d’Air Canada – Aeroplan – et celui d’American Airlines ont pour origine une intense rivalité qui visait à dominer le marché des gens d’affaires sur les liaisons entre le Canada et les États-Unis.

Le programme que nous avions créé en 1985 est aujourd’hui une société indépendante d’Air Canada, qui commercialise des activités de fidélisation.


Il serait sans doute opportun de prendre maintenant quelques minutes afin de revoir certaines des transformations qui se sont opérées à l’IATA sous ma direction.

L’IATA, comme chacun le sait, est l’Association internationale du transport aérien.

Elle a été créée en avril 1945, quelques mois après la création de l’O.A.C.I. – l’Organisation de l’aviation civile internationale – et par les mêmes diplomates et hauts fonctionnaires.

Dès mon arrivée à l’IATA, j’ai constaté jusqu’à quel point je venais d’être élu à la tête d’une grande bureaucratie internationale – lourde, et paralysante.

Le premier directeur général provenait de la haute fonction publique britannique. Il avait dès le départ implanté un style de gestion qui était probablement semblable à celui du ministère des transports de l’époque.

Son successeur, un ambassadeur suédois, avait laissé la machine bureaucratique se déployer dans toute sa force.

Finalement le troisième, celui auquel je venais de succéder, avait été un des co-présidents de la Lufthansa qui était, lui aussi, très à l’aise avec ce style de gestion.

En parlant de bureaucratie, je me rappelle très bien d’une de mes visites en Inde durant laquelle j’avais rencontré le secrétaire général du gouvernement indien en matière de transport aérien.

Je plaidais alors la cause des lignes aériennes de ce continent qui à cette époque étouffait littéralement sous une bureaucratie paralysante.

Avec un sourire – et un clin d’œil – le secrétaire général me dit

« Vous devez comprendre, Monsieur Jeanniot, que notre bureaucratie nous vient des Britanniques, et comme vous pouvez le constater – nous l’avons perfectionnée ! »


À mon arrivée à l’IATA en 1991, le budget de l’organisme était de 50 millions de dollars, et les redevances que les compagnies aériennes membres lui versaient s’élevaient à 27 millions de dollars.

Afin d’illustrer le chemin parcouru, il suffit d’observer qu’à mon départ en 2002, le budget s’élevait à 300 millions de dollars, les redevances n’étaient plus que de 17 millions de dollars, et l’IATA avait pour cette année seulement réalisé un surplus de 28 millions de dollars.

De bureaucratie internationale, l’IATA était devenue un organisme souple – à l’écoute de ses membres, et de ses clients.

Elle était toujours l’organisme qui représente les intérêts des lignes aériennes auprès des gouvernements, des agences de navigation aérienne, des aéroports, etc.

Elle était toujours aussi le forum où tous les nouveaux standards, nouvelles pratiques, et systèmes opérationnels se développent.

Mais elle était aussi devenue une coopérative internationale, offrant toute une gamme de produits et de services d’utilité aux lignes aériennes et aux autres acteurs du transport aérien.


Toute profonde restructuration d’un organisme tel que celui-ci se doit de commencer par une refonte des mécanismes de gouvernance.

C’est un processus long en lui-même puisque cela requiert, entre autres, une approbation par une assemblée générale.

Je vous fais grâce des détails mais deux ans plus tard les statuts avaient été révisés et modernisés.

Il s’agissait maintenant de revoir et d’actualiser le rôle de l’IATA dans le contexte d’une industrie de plus en plus soumise aux pressions de la libéralisation des marchés, et de la libre concurrence.

Il fallait rapidement transformer la culture de l’organisation – une opération que j’avais dû accomplir à Air Canada avant de pouvoir commencer le processus de privatisation.

De façon similaire, avec l’aide d’un cabinet de consultation spécialisé en ce domaine, un programme fut mis sur pied.

Ainsi les 1100 employés furent embrigadés, sur une période de deux ans, dans des sessions intensives de sensibilisation au service à la clientèle.

Cette révolution culturelle ne faisait pas l’affaire de tous, et malheureusement il fallut procéder à inciter les récalcitrants à partir.

Finalement, presque par l’osmose, une nouvelle culture a émergé.

Les employés y avaient pris goût appréciaient la plus grande liberté d’action et le plaisir de satisfaire les membres et les clients.


Lorsqu’un organisme bureaucratique est confronté à un nouveau défi qui requiert des ressources qui n’avaient pas été prévues auparavant, trop souvent la réaction naturelle est de demander des fonds supplémentaires.

La pratique était courante à l’IATA.

Quelques mois après mon entrée en fonction, je me vis confronté à une demande de ce genre.

Je refusais catégoriquement. Nous devions, dès maintenant, apprendre à redéployer nos ressources en fonction des priorités, et augmenter notre productivité.

Cela faisait partie du changement de culture qu’il s’agissait d’installer.

D’autant plus que – malgré le fait que le nombre de nouveaux problèmes et défis augmentait – nos membres espéraient voir une diminution substantielle de leurs redevances.

La solution était évidente. Il s’agissait de prendre avantage des compétences et services existants, et d’y greffer des services optionnels qui seraient offerts à toutes les lignes aériennes moyennant une rétribution raisonnable.

Certains produits et services pourraient également être offerts à d’autres intervenants de l’aviation.

L’IATA étant une organisation à but non lucratif, tous les surplus générés par l’activité commerciale étaient réinvestis chaque année pour augmenter les services aux membres, répondre aux nouvelles demandes, et diminuer graduellement les redevances.

Il va sans dire que, afin de compléter la révolution culturelle, les mécanismes de rémunération des employés ont été complètement modifiés afin de mettre l’accent sur la performance et les résultats obtenus.


La gouvernance de l’IATA ayant été modernisée, la culture de l’entreprise radicalement changée, et le financement de nouveaux projets assuré, il était désormais possible de s’attaquer avec vigueur aux nouveaux défis auxquels notre industrie faisait face.

Trois facteurs avaient le potentiel de limiter sérieusement la croissance du trafic aérien.

Il était important de diminuer

le taux d’accidents d’avion
l’impact de notre industrie sur l’environnement
les problèmes de congestion tant aux couloirs aériens qu’aux aéroports.


J’ai toujours prétendu que la sécurité se devait d’être la première préoccupation de tout dirigeant de ligne aérienne.

Or dès mon arrivée à l’IATA, j’avais constaté que – mis à part la publication de quelques statistiques – la sécurité n’était pas un sujet de préoccupation officiel.

On considérait que l’IATA n’avait aucune juridiction en la matière et que c’était aux états et à l’OACI à prendre des mesures et émettre de nouvelles directives.

Au milieu des années 1990 on enregistrait, en moyenne, un accident à tous les quinze jours quelque part sur la planète.

Si on laissait aller les choses, compte tenu de l’accroissement prévisible des vols à l’échelle mondiale, on en viendrait dans dix ans à déplorer un accident par semaine.

C’était inacceptable. Il fallait agir – et un groupe de travail fut mandaté pour faire une étude exhaustive des différentes catégories d’accidents, leurs natures, leurs causes, les régions impliquées, les conditions météorologiques, etc.

Les statistiques étaient révélatrices, et sans entrer dans les détails quelque 70 % des accidents avaient à l’origine une erreur humaine – et certaines régions du globe qui ne représentaient que 3 % du volume mondial, étaient responsables de 27 % de tous les accidents.

À partir de ces résultats, un bon nombre d’activités furent entreprises, en particulier :

Sensibiliser davantage les avionneurs, motoristes, ainsi que les aéroports, agences de navigation aérienne, et les gouvernements, sur leur part de responsabilité.

Revoir la formation des pilotes – avec une attention toute particulière sur leur travail en équipe, principalement au décollage et à l’atterrissage durant lesquels la majorité des accidents résultant d’erreurs humaines se produisent.

Développer des programmes d’amélioration des infrastructures aériennes pour les pays en voie de développement et faciliter leur financement. [Plus de 30 programmes de ce genre furent mis en œuvre dans les années qui suivirent.]

Afin d’améliorer la transparence de leurs opérations, je proposais que chaque ligne aérienne se soumette périodiquement à certaines vérifications techniques par une entité indépendante.

Les lignes aériennes étaient au début plutôt réticentes à adopter une telle mesure, mais elles furent prêtes à en discuter – et à l’accepter – sur une base volontaire à l’assemblée générale d’Amman en Jordanie en 1997.

Un nouveau phénomène avait fait son apparition. Il s’agissait des partages de codes qui s’étaient multipliés.

Les partages de codes permettent aux lignes aériennes de pénétrer de nouveaux marchés. Par contre, en accordant à un autre transporteur l’utilisation de son code, la détentrice assume l’entière responsabilité de la sécurité du vol opéré par son alliée.

La disponibilité d’une vérification technique objective commune à toutes les compagnies aériennes était devenue attrayante.

Elles acceptèrent aussi l’objectif de réduire de moitié le taux d’accidents aux cours des 10 prochaines années.

D’une association qui quelques années plus tôt considérait n’avoir aucune responsabilité en matière de sécurité, nous étions devenus une organisation qui en avait fait un objectif principal !


Le deuxième volet stratégique touchait les longues files d’attente dans les aéroports.

Les développements plus récents tels que la popularité croissante de l’Internet, la prolifération de l’usage des ordinateurs portatifs, le téléphone cellulaire, ainsi que les avancées en biométrie, offraient de nouvelles possibilités que nous devions explorer.

Un groupe d’intérêt commun fut constitué qui se composait de représentants de lignes aériennes, d’agences diverses, et de sociétés intéressées à développer et produire des équipements et des systèmes.

Le groupe – du nom de S.P.T. soit « Simplifying Passenger Travel » – accepta l’objectif de réduire éventuellement le temps d’attente aux aéroports de 50 %.

Les travaux furent malheureusement interrompus par les événements du 11 septembre qui avaient compliqué la situation.

Les travaux furent relancés par la suite par mon successeur sous le nom de « Simplifying Business ».

Parmi les réalisations les plus concrètes de cette stratégie on doit noter le billet électronique – la possibilité pour chacun d’entre nous de faire nos propres réservations par l’Internet ainsi que d’imprimer nos cartes d’embarquements.

Notons aussi l’usage de la biométrie en quelques endroits pour faciliter le passage aux douanes et à l’immigration.

Les problèmes de congestion étaient également présents au niveau du trafic aérien.

En période de pointe, la congestion de certains corridors aériens européens ainsi que nord-américains causait des retards dont le niveau était devenu intolérable.

On parlait sérieusement en certains milieux officiels d’imposer aux lignes aériennes une croissance zéro !

Compte tenu des efforts pour totalement libéraliser les marchés afin de stimuler la concurrence, restreindre la capacité des routes aériennes était de l’incohérence !

À très court terme, la situation demandait une plus grande collaboration entre les lignes aériennes et les agences de navigation.

L’IATA obtint l’accord d’établir une cellule opérationnelle de liaison au sein de l’Eurocontrol à Maastricht inaugurant – pour la première fois – une collaboration soutenue entre utilisateur et fournisseur d’espace aérien.

À plus long terme, il fallait des solutions beaucoup plus radicales puisqu’il était nécessaire d’envisager des solutions qui permettraient, au minimum, de doubler la capacité des routes aériennes.

La solution était à la fois politique – et technique.

L’espace aérien européen devait être unifié – et simplifié – et de nouvelles technologies développées et implantées.

L’IATA entreprit le développement d’une « Feuille de route » que nous allions proposer aux autorités responsables afin de guider le développement d’un nouveau concept de navigation aérienne.

Les programmes européens de « SESAR » et de « Ciel Unique – Single Sky », ainsi que le projet américain « NextGen », sont en partie dérivés des propositions émises à cette époque.


La question de l’impact de l’aviation sur l’environnement est aussi bien sûr importante.

Dans le court terme, l’IATA avait proposé aux lignes aériennes une série de mesures qui vissaient à optimiser la consommation de carburant et minimiser le bruit aux aéroports.

À plus long terme, des changements beaucoup plus radicaux seraient nécessaires.

Des nouveaux avions plus légers en matériaux « composites », des nouveaux moteurs plus performants, nous laissaient entrevoir la possibilité d’améliorer la consommation de carburant par passager de 15 à 20 %.

Améliorer le trajet des routes aériennes, diminuer les goulots d’étranglement dans les airs, pourraient résulter en un gain d’un autre 10 %.

Il n’était pas question à l’époque de biocarburant, ce qui devrait nous permettre d’augmenter notre réduction en CO2 un peu plus facilement.


Nous pouvons donc constater que les défis que nous avions identifiés à la fin du siècle dernier ont été largement maîtrisés, et même si ces défis existent toujours – et existeront peut-être toujours – leurs effets ne limitent pas la croissance de l’aviation.

En ce qui a trait à la réduction du taux d’accidents, l’objectif de 50 % fixé en 1997 fut atteint en 2007 – soit un accident pour un million six cent mille vols.

L’objectif a été également atteint aux aéroports, mais leur effet est malheureusement masqué par la congestion reliée à la sûreté.


La première décennie du nouveau siècle a été marquée, entre autres, par des attaques spectaculaires de terroristes kamikazes, par une importante crise du pétrole, une profonde récession économique qui perdure l’explosion des économies asiatiques – en particulier l’Inde et la Chine – ainsi qu’une plus grande prise de conscience à l’échelle mondiale de la nécessité de réduire notre impact sur l’environnement.

L’aviation commerciale est à nouveau en train de se redéfinir.

Sur la question de l’environnement, l’industrie s’est fixé l’objectif de contribution zéro pour 2025.

Puisqu’il est toujours prévu que le trafic aérien double dans les prochains 15 ans, afin de ne pas augmenter notre présent niveau de génération de gaz à effet de serre, nous devrons réduire nos émissions de 50 % par passager/kilomètre par rapport à aujourd’hui.

C’est un objectif très ambitieux qui demande que les nouveaux modèles d’avions et de moteurs soient beaucoup moins énergivores que ceux qu’ils remplaceront.

Les Airbus A-380 et A-350 ainsi que la nouvelle série de Boeing, B-787, devraient contribuer à cet objectif.

Il est peu probable que les deux grands avionneurs – Airbus et Boeing – décident de se lancer dans le développement d’une nouvelle génération de monocouloirs avant 2020.

Par contre, ces deux mêmes avionneurs étudient très sérieusement à ce moment précis l’option d’offrir une version modernisée de leur modèle présent – avec de nouveaux moteurs.

Le nouveau modèle de Bombardier, la Série C, peut faire une importante contribution en remplaçant les plus vieux A-320 et B-737.

Les progrès réalisés récemment dans la production et l’utilisation de biocarburant non – ou peu – polluants nous permettent d’espérer que d’ici dix ans quelque 20 % des vols seront effectués au moyen de ces carburants.


Les nouveaux concepts de navigation aérienne se doivent également de faire leur part.

SESAR, le projet européen, s’est fixé l’objectif de réduire d’au moins 10 % la consommation de carburant requise pour l’opération des vols dans l’espace européen.

SESAR a principalement pour objectif de tripler la capacité des routes aériennes – tout en améliorant la sécurité par un facteur de 10.

NextGen, le projet américain, s’est fixé des objectifs similaires.

J’ai indiqué précédemment, en référant au projet européen de « Single Sky », que le défi était autant politique, que technique.

Il est peut-être paradoxal que l’Europe, tout au moins celle de Schengen, ait aboli les frontières sur son sol – mais s’entête à les préserver dans les airs.

Les syndicats des contrôleurs aériens auraient-ils plus de poids que la police des frontières ?

Mais inévitablement le bon sens prévaudra.


La libéralisation des marchés a été progressive.

L’industrie des lignes aériennes n’a pas connu de « Big Bang » à l’instar d’autres industries ni n’a d’ailleurs été le sujet de discussions sérieuses à l’Organisation mondiale du commerce.
Elle avait débuté par l’ouverture totale des marchés à l’intérieur des Etats-Unis. Ce mouvement a été suivi par l’intégration du marché aérien dans l’espace européen et dans divers regroupements économiques régionaux.

L’initiative américaine d’Open Sky, qui est une forme de libéralisation extrême du bilatéral, s’est généralisée à plus d’une centaine d’accords entre pays.

La mondialisation du commerce, les réseaux électroniques qui favorisent les échanges instantanés entre les êtres humains, contribuent à l’émergence du village global et militent en faveur d’une libéralisation de plus en plus grande des marchés aériens.

Sous cette impulsion, le profil de l’industrie aérienne se transforme.

De nouveaux modèles ont émergé, d’autres se redéfinissent, et divers concepts s’affrontent.

Il est clair que l’ère des transporteurs nationaux est désormais révolue.

Peu de nations peuvent se permettre le luxe de subventionner une ligne aérienne incapable de faire face à la concurrence féroce qui sévit aujourd’hui dans cette industrie.

Les lignes qui offrent de très bas prix – celles que l’on appelle communément les « low costs » – se sont implantées dans les différentes régions du globe, exerçant de fortes pressions sur les lignes traditionnelles.

La rapidité – presque surprenante – avec laquelle les « low costs » se sont imposées a pris les lignes aériennes traditionnelles de court, et les a obligées à revoir leurs positionnements sur les marchés et à repenser leurs réseaux.

De fait, il appert que la totalité de la croissance mondiale en capacité depuis 2001 est effectivement égale à la croissance des « low costs » !

Sur cette même période, la capacité offerte par les lignes traditionnelles a légèrement diminué.

Une étude récemment publiée par le « Centre of Asia-Pacific Aviation » démontrait que pour la période en question le nombre de sièges offert par des « low costs » était passé de 7 % du total à 22 %.

Bien que beaucoup de nouveaux arrivants ont fait faillite à la fin de l’année dernière, près des 2/3 des compagnies créées depuis 2000 avaient survécu – ce qui représente 178 compagnies « low cost » en opération mondialement.

Il est paradoxal que la flambée soudaine du prix du pétrole ait quelque peu désavantagé ce nouveau type de lignes aériennes par rapport aux traditionnelles.

La raison en est très simple et résulte du fait que le coût du carburant représente un pourcentage beaucoup plus important de leurs coûts d’opération.

Par contre, les compagnies traditionnelles ont grandement souffert de la récession en raison d’une migration importante de leurs clients de classe affaires – vers la classe économique.

Sous la pression de la concurrence accrue – et prenant avantage des nouvelles flexibilités offertes par les marchés communs – un bon nombre de transporteurs sont à se regrouper pour survivre.

La situation est déjà réglée en Europe où, à toutes fins utiles, la plupart des anciens transporteurs nationaux vont se retrouver au sein d’un des trois groupes distincts dirigés respectivement par la Lufthansa, Air France, et la British Airways.

Déjà la Lufthansa a absorbé Swiss International (ancienne Swissair), Austrian Airlines, Brussels Airlines (dérivée de Sabena), et British Midland.

Air France ayant complété sa fusion avec la KLM possède également une participation importante dans Alitalia.

Quant à la British Airways – avec beaucoup de retard – elle est à compléter sa fusion avec Iberia.

Il reste bien sûr un certain nombre de plus petits transporteurs nationaux indépendants – mais il leur sera de plus en plus difficile de ne pas se fusionner à l’un ou l’autre des grands groupes.

En Amérique du nord, le même phénomène est présent et nous avons vu récemment Northwest et Delta se fusionner.

La question de l’avenir d’Air Canada demeure d’actualité.

Pourra-t-elle survivre sans se fusionner ?

Sera-t-elle suffisamment financièrement forte pour amorcer et diriger par exemple un regroupement nord-américain – lorsque les accords le permettraient ?


Il est plutôt curieux – sinon franchement paradoxal – que de nouveaux transporteurs que l’on pourrait qualifier de nationaux se développent et se taillent rapidement une place sur les marchés internationaux.

Au cours de la dernier décennie, trois petits états du Golf Persique ont créé d’ambitieuses plaques tournantes – ou « hub » – afin d’exploiter les marchés de 6e liberté entre l’Asie d’une part et l’Europe et l’Amérique d’autre part.

Emirates basée à Dubai, Etihad à partir d’Abu Dhabi, ainsi que Qatar Airways dont l’opération est à Doha se proposent d’exploiter des flottes importantes.

Pour fins d’illustration de leurs ambitions, il suffit de se rappeler qu’Emirates a commandé 53 Airbus A-380 et 70 Airbus A-350.

Pour sa part, Qatar Airways a récemment mis en commande 80 Airbus A-350 et cinq A-380.

Il sera intéressant de voir si, dans le contexte actuel, trois nouvelles lignes aériennes basée dans le Golf Persique pourront éventuellement survivre.

Et ce, particulièrement aussi dans le contexte de la croissance rapide de fortes lignes aériennes en Inde et en Chine, et de la disponibilité de nouveaux appareils à grand rayon d’action, tels que les Boeing B-787 et les Airbus
A-350 permettant les liaisons directes entre l’Asie, l’Europe, et l’Amérique du nord.

Tout cela nous promet un climat de concurrence qui sera sans doute des plus animés pour le très important marché asiatique.

Or en Asie, la croissance du trafic aérien est reparti de plus belle.

Cette région – l’Asie-Pacifique – vient de dépasser l’Amérique du nord en nombre de passagers annuels – 647 millions contre 638 millions pour 2009. D’ici quelques années, cette région représentera 50 % du trafic aérien mondial.


Finalement, faisant partie de la restructuration du transport aérien, nous avons observé aussi un essor important du nombre et de l’utilisation des avions privés et de sociétés, résultant sans doute en partie de l’accroissement de la rémunération des cadres supérieurs – un sujet d’actualité.

Par contre, il y a également nul doute que l’utilisation d’avions privés permet d’éviter la pagaïe – et les files d’attentes exaspérantes – occasionnées par les mesures additionnelles de sûreté aux aéroports.

La popularité de la formule de propriété partagée dite « fractional ownership » était en pleine croissance – avant la dernière récession.

La crise économique a interrompu cette expansion, mais il est à prévoir que cette formule va bientôt reprendre une vigoureuse croissance.


Que peut-on conclure de l’avenir de l’aviation commerciale – et plus particulièrement des services aériens – tels qu’ils se présentent aujourd’hui ?

En ce qui à trait à la demande, il est certain que le désir – et la nécessité – de voyager ne peuvent que continuer de croître.

La croissance sera vigoureuse en Asie-Pacifique, dans les républiques de l’ancien Empire soviétique, et en Amérique latine.

Il est à prévoir que l’Europe et l’Amérique du Nord (les Etats-Unis, le Canada, et le Mexique) concluront éventuellement un accord aérien en vue de créer un marché totalement intégré.

Cet accord devrait permettre la fusion de lignes européennes et nord-américaines.

En plusieurs régions du globe, les « low costs » atteindront une pénétration du marché de l’ordre de 50 %.

Les améliorations des systèmes de navigation aérienne issues de SESAR et de NexGen auront été en mesure de répondre à l’augmentation du nombre de vols.

Les biocarburants n’émettant pas – ou très peu – de CO2 seront devenus la norme pour les lignes aériennes.

La reprise économique devrait à nouveau stimuler la croissance du nombre d’avions privés, ainsi que de ceux opérés en copropriétés.

Les passagers auront la pleine capacité – non seulement de faire leurs propres réservations et d’émettre leurs cartes d’embarquements comme ils le font aujourd’hui – mais aussi de compléter eux-mêmes toutes les autres phases de leur voyage telles qu’enregistrer leurs bagages, ou procéder à leur propre embarquement.

Malheureusement, il est à craindre que les procédures de sûreté aux aéroports continueront de créer des embouteillages frustrants – empêtrées dans la bureaucratie, le manque d’innovation, et paralysées par la crainte de faire une erreur.


Enfin, il est paradoxal qu’une industrie comme celle-ci qui bénéfice depuis sa naissance d’un taux de croissance impressionnant – n’a jamais été rentable.

Malgré les avancées techniques spectaculaires – l’utilisation de procédures de fine pointe, d’accroissements de productivité exemplaires, ses efforts d’imagination, et sa constante remise en question depuis sa naissance – cette industrie a perdu plus d’argent qu’elle n’a fait de profits.

Le célèbre Warren Buffett, le gourou financier d’Omaha, se plaisait à dire :

« Si quelqu’un avait pris l’initiative d’abattre le premier vol des frères Wright, cette personne aurait rendu un grand service aux financiers qui ont cru faire une bonne affaire en investissant dans les lignes aériennes » !

Comme chacun sait, Warren Buffett vient d’investir une somme considérable dans un chemin de fer aux États-Unis.

L’industrie du transport aérien – serait-elle l’objet d’une malédiction pour la punir, tel Icare, d’avoir voulu s’élever dans les cieux réservés aux dieux de la mythologie ?

Ou souffre-t-elle encore d’une longue crise d’adolescence, vainement à la recherche d’une certaine maturité qui tarde à venir ?

Chose certaine – l’industrie du transport aérien continue de se transformer.

Le modèle d’affaires des lignes traditionnelles évolue, ainsi que les modèles d’affaires des nouveaux arrivants – les célèbres « low costs ».

Il est à souhaiter – et non pas uniquement pour les bailleurs de fonds – qu’il en résultera un nouvel équilibre, une certain stabilité, permettant à cette importante industrie d’atteindre un niveau raisonnable de rentabilité afin de continuer à apporter sa contribution essentielle au développement économique et social de l’humanité.

Merci !

Address to La Ligue de Cadets de l’Air – Souper Bénéfice

Brève Allocution pour le Souper Bénéfice La Ligue de Cadets de l’Air
Montréal, Canada, 24 Février, 2010  >>


Merci Monsieur le Président … pour cette introduction fort élogieuse.

En vous écoutant énumérer certains de mes faits d’armes … où des résultats qui me sont attribués … je me disais qu’il serait peut-être plus sage de vous dire simplement « merci »… et de m’asseoir … par crainte de vous décevoir !

Lorsque votre Président m’a demandé de prononcer quelques mots à ce dîner bénéfice … je me suis souvenu d’une anecdote qui date du temps … où les Romains avaient la mauvaise habitude … de faire dévorer des Chrétiens par des lions.

On raconte que l’un de ces Chrétiens avait réussi à échappé aux lions …

En évitant le lion qui se précipitait sur lui … le Chrétien avait murmuré quelques mots … dans l’oreille du fauve.

En entendait ces quelques mots … le lion s’arrêtait tout net … regarda la foule autour de l’arène … et tout penaud … retourna d’où il était venu.

On envoya un deuxième lion … et encore une fois … le Chrétien réussit à intimidé le lion qui décida de ne pas le dévorer.

On envoya un troisième lion … mais toujours avec le même résultat.

Le Chrétien fut gracié … car la coutume voulait … qu’après trois essais infructueux … le condamné aurait la vie sauvée.

I am told that this could be the origin of the expression … now currently used in baseball … “three strikes and you’re out!

L’Empereur Romain … très étonné … dit au Chrétien que celui-ci aurait la vie sauvée … mais qu’il aimerait bien savoir ce que le Chrétien à bien murmuré á l’oreille de chacun de ces lions.

« C’est bien simple » … répondit le Chrétien … « je leurs a dit … vous voyez toute cette foule qui vous regarde … après avoir mangé … ils vont certainement vous demander de prononcer un discours ! »

And so … I do understand that one is expected to sing for one’s supper.

However … let me reassure you … and as Henry the Eighth of England … was known to have said to each of his wives … “I do not intend to keep you very long!”


Permettez-moi … en tout premier lieu … d’exprimer mes sincères félicitations à la Ligue des Cadets de l’Air … et plus particulièrement à son Président … et à son Conseil d’administration … pour l’excellent travail que vous accomplissez.

En parlant du Conseil d’administration … je reconnais … avec plaisir … Chantal Boily … elle-même ancienne membre des Cadets de l’Air … comme sans doute plusieurs autres d’entrevous.

Chantal … qui j’ai bien connu à THALES Avionique … où elle occupe une importante poste de direction … à déjà … malgré son jeune âge … une feuille de route impressionnante … Elle a eu précédemment une poste important à Air Canada.

Chantal … tout comme votre Président Pierre Barabey … et bon nombre d’entrevous … témoigne de l’influence importante … que l’appartenance à la Ligue des Cadets de l’Air … peut avoir sur l’orientation de la formation des jeunes … et l’évolution de leurs carrières.

La Ligue des Cadets de l’Air ne peut pleinement remplir son rôle … que si elle reçoit le support de l’industrie.

Et à ce sujet je dois offrir … à tous et chacun d’entrevous … membre de l’industrie aérospatiale … ici présent … des félicitations chaleureuse … et des remerciements … pour l’aide essentielle que vous apportez à cette Ligue.

L’intérêt pour l’aéronautique a une longue tradition au Québec.

De fait … cette année marquera le 100ème anniversaire d’un événement important.

Il s’agit de la première rencontre internationale d’un group de personnes intéresser à l’aviation … il s’agit … plus exactement … du premier Congrès internationale de l’aviation qui se tenait ici même … au Québec … à un endroit qui est aujourd’hui un quartier de Pointe Claire.

Lors de la clôture de ce Congrès … soit le 2 juillet 1910 … a eu lieu un survol … pour la première fois … de la ville de Montréal pas un avion.

Il s’agit … d’un vol effectué par le Comte Jacques de Lesseps … au dessus de Montréal … dans un Blériot XI … qu’il avait amené par bateau … évidement … pour faire des vols de démonstration … en Amérique du Nord.

Jacques de Lesseps était le fils ainé … du non moins célèbre Ferdinand de Lesseps … le concepteur du Canal de Suez !

Il va sans dire que se premier vol avait créé beaucoup d’émoi chez les Montréalais !

Que de chemin parcouru en cent ans !

Et il est claire … que dès ces tout débuts … les gens de cette région … se sont passionnés pour l’aviation … et … grâce à cet intérêt soutenue … nous en sommes arrivés à la richesse … et la diversité des activités aérospatiale représenté ici même … ce soir.

Sans oublié … en passant … les contributions formidable de pionniers tel que Roméo Vachon … au développement de l’aviation de Brousse … au Canada … et qui nous ont valu une réputation mondialement.

Je n’ai pas besoin de vous rappeler … que cette région regroupe près de 60 pourcent de toute l’industrie Canadienne aérospatiale … et que Montréal … et ses alentours … est considéré comme un des trois pôles mondiaux de ce domaine.

Malgré la récession économique que nous connaissons et qui perdure encore … nous savons que l’avenir n’en demeure pas moins prometteur.

La croissance de notre industrie est certaine … et c’est à nous de nous assuré que nous continuerons à obtenir une part importance de cette croissance.

Pour cela … il nous faut préparer la relève .. continuer d’intéresser les jeunes à l’aéronautique et l’aérospatiale …et les inciter à se spécialiser dans l’une ou d’autre des professions … et compétences … qui seront requises … pour que nous puissions conserver notre leadership.

C’est là que vous … les membres influent de notre industrie … ont un rôle important à jouer … et votre support à la Ligue des Cadets de l’Air est un jalon significatif.

Finally, it is said that … no speech is entirely bad … if it is short … and I am afraid that I may already be in danger … of exceeding your level of tolerance.

Ce qui veut dire … qu’il est important d’arrêter de parler … avant que l’auditoire arrête d’écouter.

En terminant … je souhaite beaucoup de succès à la Ligue des Cadets de l’Air … et je souhaite également aux industries aérospatiales de notre région … de continuer d’innover … de croître … et de mériter un rôle de premier plan sur la scène mondiale.

À nouveau … merci pour votre aimable invitation … et bonne fin de soirée.

Le Conseil des Relations Internationales de Montréal – CORIM

Le Conseil des Relations Internationales de Montréal – CORIM
Presentation du Conférencier Raymond Benjamin
Montréal, Canada, 23 Février, 2010  >>


Mesdames … messieurs … j’ai le grand plaisir … de vous parler brièvement … de notre éminent conférencier d’aujourd’hui … le Secrétaire général de l’OACI … mon bon ami Raymond Benjamin.

Monsieur Benjamin à été élu à la tête de l’organisation de l’Aviation Civil Internationale … en août dernier.

Cette nomination venait couronner … une brillante carrière … de plus de quarante ans … et cela … malgré son jeune âge … au service de l’aviation civile.

Diplômée de l’Institut des Hautes Études Internationale … et de l’Institut d’Études Politiques … de Paris … il obtient … par la suite … une maîtrise de droit public … de la Faculté de droit et des sciences économiques de Paris.

Très rapidement …ont le retrouve … dans le rôle de conseiller … à la direction général de l’aviation civile française.

Il est demeuré depuis … entièrement fidèle à la cause de l’aviation civile … comme sa feuille de route … d’ailleurs le démontre … par les nombreuses fonctions qu’il a occupé … et les nombreuses responsabilités … dont il a été chargé … tant sur le plan Européen … qu’international.

Ayant fait ses débuts à la direction générale de l’aviation civile de France … la DGCA … dans divers rôles … incluant la négociation d’accords bilatéraux aériens … il est … en 1982 nommé … en qualité d’expert à la CEAC … la Conférence Européenne de l’Aviation Civile.

C’est à la CEAC que se déroulera la très grande partie de sa carrière … exception faite d’une période de 5 ans … de 1989 à 1994 … où il avait rejoint … pour une première fois les rangs de l’OACI.

Je crois que c’est d’ailleurs à cette époque là … que j’ai brièvement fait connaissance de Raymond Benjamin.

J’étais alors Directeur général de l’IATA … L’Association Internationale du Transport Aérienne … et Raymond Benjamin … était chargé de développer des politiques en matière de sureté … et d’élaborer des programmes de sureté pour les aéroports.

Il était aussi … entre autres … secrétaire d’un groupe d’experts de la détection des explosifs plastiques … et en feuilles. Monsieur Benjamin nous dira peut-être … si ce group inclus maintenant … les explosifs liquides dans les bobettes.

Par la suite … Reymond Benjamin à diriger la CEAC … pendant plus de 13 ans.

Cette Conférence Européenne de l’Aviation Civile … la CEAC … regroupe 42 états membres … et vise à harmoniser un certain nombre de politique et de stratégie dans l’ensemble de l’espace aérien.

Vous avez noté sans doute … que les responsabilités de la CEAC dépassent largement l’espace aérien de la communauté Européene.

S’est dans ce rôle que j’ai eu le plaisir de collaborer … à multiples reprises avec Raymond Benjamin … sur un bon nombre de questions d’intérêt commun à l’IATA et à la CEAC.

Il s’agissait … bien sûr de question de sureté … qui lui est chère … et d’environnement.

Deux sujets toujours d’actualité.

Raymond Benjamin est un homme d’action … son style et direct.

C‘est aussi un homme qui écoute … et qui sait naviguer parmi les multiples intérêts internationaux … qui se retrouve fréquemment à la gouverne des institutions onusienne.

En élisant Raymond Benjamin secrétaire général … l’OACI s’est offert un leader capable de donner à cette vénérable institution un nouveau souffle … et une nouvelle direction … que les défis que nous connaissons … lui impose.

Raymond Benjamin … né en Egypte de parents français … était sans doute … de par sa naissance … prédestiné à accomplir des tâches phara-onique !

Et réorienter l’OACI … est une tache de cette nature !

Mesdames … messieurs … je vous demande d’accueillir chaleureusement notre conférencier … le Secrétaire général de l’OACI … Raymond Benjamin.