State of the Industry – The Game Players
Keynote address to APG World Connect
Monte Carlo, October 25, 2012  >>

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Ladies and gentlemen:

Every two years , Jean-Louis Baroux brings this Conference back to Monte Carlo, a place of opulence, perhaps in the hope that some of those characteristics will eventually rub off on our perennially troubled aviation industry.

Well, if we can believe the latest IATA forecast, the anticipated industry-wide – 0.6% net profit margin for 2012 – is not likely, once again, to cause everyone to pop champagne.

Not to take any chances, this conference continues to ensure that this magic liquid is amply present at every reception, to help either to celebrate our successes or to drown our sorrows, as the case may be.

Before I go on, let me remind you that the views expressed here are strictly my own and do not represent the views of IATA or any other corporation that I have been associated with over the years.

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Our industry is accustomed to having to deal with numerous uncertain conditions, and this current year is no exception.

The Chinese economy, which has become a major engine of world economic growth, has been slowing down.

The Asia-Pacific international market was showing a 5.5% expansion. However, when one takes into consideration the impact last year of the Japanese earthquake and Tsunami, and the recovery this year of the Japanese market to its previous level, the real growth of the Asia-Pacific international market was, in fact, marginally negative.

India’s domestic traffic was essentially stagnant, partly as a result of the government’s disastrous aviation policies, bureaucratic nonsense and excessive taxation.

North American markets were essentially flat.

However, on the bright side, the other regions of the globe have continued thus far to show good growth, particularly the Middle East, Latin America and Africa.

The financial crisis has shaken public confidence in the banking system, revealing that unfortunately some banks – driven by greed – had total disregard for the basic rules of prudent investment.

To avoid a liquidity crisis which may have brought the entire economy to a halt, the government provided a huge “bail-out” fund to the banks – at the expense of the tax payers!.

Unfortunately the banks are not the only ones misbehaving.

Many governments are overly in debt, and the situation is particularly acute in Europe.

And unfortunately, unless the North American economy clearly recovers – and Europe fixed its problems – all regions will likely suffer.

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Against this background of economic uncertainty and continued aggressive competition, the various major players have been re-evaluating their strategies, each in its own way.

Latin America has been one of the important battlegrounds.

The merger of two important airlines in the region, namely LAN and TAM – each belonging to different alliances – forced a re-examination of their respective affiliations.

The Chilean antitrust regulators told LATAM, the new combined entity, that its two operating airlines will have to be in the same alliance – and not in the same alliance as their primary Latin American rival, AVIANCA-TACA.

LAN is a founding member of “OneWorld”, and TAM became a member of STAR in 2010.

The dilemma should have been resolved this Spring, when AVIANCA-TACA was admitted into STAR.

One could have concluded that LATAM would be the South American member of “OneWorld”. However, LATAM has been keeping its options open.

Just to complete the picture, in Latin America we should remember that Aeromexico and Aerolineas Argentinas are the region’s members of Sky Team.

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The European presence of “OneWorld” was somewhat weakened in Eastern Europe by the bankruptcy of MALEV.

However, that void will be partly compensated by Air Berlin and its affiliate Fly Niki, which joined the alliance in March of this year.

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The bailout package provided to Portugal by the European Central Bank and the International Monetary Fund (IMF) imposed a requirement for the privatization of the national airline, T.A.P.

The relatively strong position of TAP in two key emerging markets – Latin America and Africa – has raised the interest of several groups including I.A.G. and the Lufthansa Group.

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Among the other major alliance developments worthy of note is the expectation that Malaysian Airlines would join “OneWorld” this year.

And then, on the Indian sub-continent the largest Indian private airline, Jet Airways, has been invited to join STAR.

However, the government of India has requested that Air India, which had been previously rejected by STAR, be admitted at the same time as Jet Airways. This could complicate the situation.

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As a natural expansion of the “Metal Neutral” Joint Venture between Lufthansa and All Nippon Airways , SWISS and Austrian were invited to join in.

Finally, Japan Airlines and I.A.G. have agreed plans for a Joint Venture business … on all services between Europe and Japan.

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The European low fare airline scene has long been dominated by RyanAir and EasyJet.

For the first time – and perhaps as an indication that the market is reaching saturation – their growth rate has been coming down to a meager 4 to 5 percent per annum.

And for the first time also seasonality has become a factor. RyanAir, for instance, decided to ground a number of airplanes during the winter months.

This year, a newer and aggressive airline – “ Norwegian Air Shuttle” – has decided to challenge those leaders.

Norwegian Air Shuttle, last January, placed an order with Boeing and Airbus comprising of 374 aircraft, of which 222 are firm orders and some 150 are options to be exercised later.

One gets a good measure of this ambitious move when one compares the Norwegian Air Shuttle fleet plan with the size of RyanAir’s current fleet of 270 airplanes and EasyJet’s 204 airplanes.

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Determined to stop the attack on their short-haul markets, the three major European airline groups have launched some substantial restructuring programs to reduce their operating costs.

Their objective is to achieve a more competitive presence in the European short-haul market.

Lufthansa, which recently announced a reduction of some 3,500 full-time administrative jobs worldwide, is considering shifting up to 90 jet aircraft to a division providing short-haul, low cost services outside of Frankfurt and Munich.

This would likely be combined with its low cost unit, “Germanwings”.

As part of its cost reduction effort, Austrian Airlines also decided to transfer the company’s fleet of 80 airplanes and its 2100 employees to its 100 percent-owned subsidiary, Tyrolean Airways.

The move was carried out to eliminate duplication and to achieve a new collective agreement.

The other member of the Lufthansa Group, Swiss, is looking at splitting off its short-haul operation – possibly to be based outside Switzerland – to achieve lower costs.

IAG – the International Airline Group – is disbanding the loss-making BMI Baby, redistributing its valuable airline airport slots to the more lucrative markets.

Thus far, the main focus of the Group has been in Spain. This will include short-term downsizing and network reshaping to address Iberia’s uncompetitive cost structure.

The Group will increase its low-cost presence in the Spanish market.

Iberia Express, a new subsidiary with services said to be almost identical to those of Iberia but with staff remunerated at low-cost competitive rates, became profitable in its second month of operation.

Thus far, Iberia Express and Vueling – also 46 percent owned by Iberia – are both growing successfully.

Finally, the last member of the European “ big three” – the Air France/KLM Group – centers its efforts on Air France, with a plan to increase productivity and efficiency by 20 percent.

Its regional restructuring is based on a three-prong effort:

First, giving Transavia – formally a KLM subsidiary – an increased role to operate a no-frills, leisure airline from Orly to Mediterranean and European destinations.

Transavia’s fleet will be increased from eight aircraft today to 22 by 2015-2016.

Second, the activities of AIRLINEAR, BRITAIR and REGIONAL will be regrouped with the objective of reducing costs by 15 percent.

Then, Air France is opening regional hubs in Marseille, Nice and Toulouse for services to various European and Mediterranean destinations.

Thus far, the results of those new liaisons have been somewhat mixed, suggesting some fine-tuning is still required.

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The Gulf carriers had remained strongly focused on their plans to “Connect the World” through their respective hubs, maximizing 5th and 6th freedom opportunities.

But in the last few weeks we have seen a dramatic shift in their strategies which could position the Gulf carriers at the core of a new global order.

Emirates and Qantas have exchanged a major codeshare agreement which covers all major European destinations.

This could cause some serious strain on the “OneWorld” Alliance.

And then Qatar Airways, which had been cosying up to British Airways, and has now joined OneWorld.

The third member of the powerful Gulf “triumvirate”, Etihad, together with Air Berlin has now announced a wide-ranging commercial agreement with Air France/KLM.

Given this new development one wonders how long Air Berlin – 29% owned by Etihad – would remain in “One World”.

Clearly, the major strategic shift by the Gulf carriers has thrown the three alliances … into a state of flux!

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A brief overview of the region would not be complete without mention of Turkish Airlines – fast growing and also ideally located between Europe, Asia and Africa.

Turkish Airlines, which today operates to five North American destinations plans in the short to medium term to add five more major destinations.

Turkish Airlines is also looking at investing in other airlines, and has been showing interest in LOT Polish Airlines as well as Portuguese TAP.

Finally, the growth of Air Arabia – the largest low-cost carrier in the Middle-East and Africa – is most impressive, and has established new hubs in Casablanca and Cairo in addition to its main base in Sharjah.

Regardless of who is involved, more consolidation will take place in the U.S.A.

American Airlines’ restructuring plan calls for a reduction of 13,000 employees, major concessions from each labor group, and termination of the defined benefit pension plan as well as closing the Fort Worth Maintenance Base.

The plan hopes to generate sufficient cash to renew the fleet over the next five years.

A strong American Airlines would marginalize U.S Airways, leaving it with little scope to grow. This is believed to be the reason for U.S. Airways to begin a potentially hostile take-over bid for American Airlines.

The U.S. Airways’ effort to gain control of American Airlines has generated much support from Wall Street and American Airlines’ own unions.

American Airlines, which had originally shown very little interest in merging with U.S. Airways, has since indicated that a merger should be considered.

Southwest Airlines, the model of the “low-cost” par excellence, has played a part as well in the consolidation process, having acquired AirTran. Southwest’s recent losses are, in part, related to the integration of AirTran in its operation

Return to its full profit potential is now targeted for 2014.

As part of its diversification activities, Delta Airlines has decided to invest 100 million dollars in GOL, the San Paolo-based airline, which has a 40 percent market share in Brazil, to leverage and consolidate further its long-term commercial agreement.

And then in Canada, in line with the trend to develop hybrid business models, Air Canada has announced its intention to create a NEW long-haul, low cost, wholly-owned subsidiary. This new airline will target trans-Atlantic leisure destinations as well as in the U.S.A. and the Caribbean.

Looking for more room to grow, WestJet announced this year the creation of a regional carrier division, with an order of some forty Dash8-400 airplanes.

WestJet was successful in negotiating with its current employees a lower wage rate for any new employees to join this new division.

And then, moving off the strictly no-frills product, WestJet is now introducing a premium product with more legroom and various amenities to appeal to the business travelers.

Hybrid business models are proliferating. Well, it’s a case of whatever will work for you!

Low-cost carriers are expanding rapidly in Asia/Pacific.

Malaysian low-cost carrier, Air Asia, continues to increase at 12% annually.

SCOOT became the third long-haul, low-cost carrier in Asia, joining JetStar and AirAsia X.

SCOOT is also the fourth brand in the SIA group’s portfolio, which already includes low-cost carrier Tiger Airways, partially owned by SIA, and the short-haul, full service carrier, SilkAir, in addition to the mainline Singapore Airlines’ full service brand

Seven years ago, there were no low cost airlines in the Singapore market. Today L.C.C.s account for 25% of passenger traffic at Singapore’s Changi Airport.

Yet Singapore Airlines has not shrunk. The market has simply grown.

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Japan is fast becoming the new L.C.C. battleground in Asia-Pacific, with three new entrants this year namely:

JetStar – a Qantas /Japan Airlines’ joint venture;
PEACH – a subsidiary of ANA /All Nippon Airways; and
AirAsia – a joint venture between Malaysia Air Asia and All Nippon.

This flurry of new entrants has prompted Narita Airport to announce that it will build an L.C.C. dedicated terminal, due to open in 2015!

L.C.C.’s are projected to carry 20% of Japan’s domestic traffic by the end of 2012, and possibly as much as 50% by the end of the decade.

The L.C.C. Japan phenomenon is rapidly spilling over into neighboring countries.

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The Qantas’ Group, which also follows a multi-airline portfolio strategy, has chosen to have its Asian expansion channeled through its low cost JetStar subsidiary.

JetStar, joining forces with “China Eastern Airlines”, will launch a new low cost subsidiary in 2013, based in Hong Kong.

China is the target market.

Another Chinese carrier, Hainan Airlines Group, plans to turn its affiliate – 45 percent owned “Hong Kong Express” – into a low cost operation.

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Vietnam, Indonesia and the Philippines are seen as markets with great potential for low cost travel. Both are archipelagos with large numbers of overseas workers, and are increasingly popular tourist destinations.

Finally, Myanmar’s aviation market is poised to enter a major period of growth as the country begins to open up to world trade and tourism.

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Despite a slowdown of work related to a delamination issue, Boeing plans to deliver – on schedule – forty-five B-787s to customers in 2012, and has a goal of meeting a rate of 10 aircraft per month by the end of 2013.

The first airplanes were powered by Rolls Royce Trent 1000. Earlier this year certification was completed for the B-787 powered by General Electric, GENX-1B.

Boeing’s network analysis group has forecast that a potential of up to 450 new city pairs could be opened as a result of the B-787-8s particular combination of size (250 passengers), range (14,000 kms) and operating economics.

Thin routes such as Boston-Tokyo, Mumbai-Mexico City or Frankfurt-Santiago (Chile) would be good candidates.

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Meanwhile, Airbus has started the final assembly process of the A-350-900. Airbus still believes that it can begin customer delivery in 2014.

Redesign efforts have been on-going on the larger A-350-1000 model to reinforce its ability to compete successfully with the Boeing 777-300 ER and any further improvements to this model, which Boeing is already beginning to examine.

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Not surprisingly, predictions vary widely between Airbus and Boeing on the performance of their re-engined, next generation, narrow bodies.

The A-320 NEO is due to begin commercial operation in three years, while the Boeing B-737 MAX debut is even further off – targeted for 2017.

Airbus indicates that the A-320 NEO is expected to produce an overall fuel-burn improvement of 15 percent compared to the current A-320 model.

Boeing is claiming that the B-737 MAX will have a 17 percent fuel burn advantage over the current A-320.

This could be a case of “apples and oranges”.

Boeing’s prediction for fuel burn per seat is based on a 162-seat configuration for the B-737 and a 150 seat arrangement for the A-320.

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A huge order from SkyWest at Farnborough for 100 Mitsubishi regional jets – the 90-seat MRJ-90 – was a major signal that the Bombardier-Embraer duopoly may have ended.

SkyWest is a key player in the biggest regional jet market, the U.S.A.

But Mitsubishi is also studying a stretched 100 seat version for potential customers including Air Lease Co.

The MRJ is the second entrant in the larger regional jet arena, following the SUKHOI SuperJet 100 which entered service last year but has yet to gain full credibility with Western operators.

Meanwhile, Bombardier no longer insists that the first flight of the C-Series – the CS100 – will take place by the end of 2012, but still hopes to deliver a certified for 120 minutes E. T.O.P.S. at entry into service to a customer in 2013.

The plan also calls for the larger C.S.300 to be certified by 2014.

By allying its product with the Chinese COMAC C-919, Bombardier would be able to offer a hybrid family to the Chinese carriers.

COMAC C-919 is expected to fly in 2014, and start delivery in 2017. RyanAir has expressed an interest for the aircraft.

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The objective of the Single European Sky initiative, launched in 2004, was to achieve a European airspace without borders.

Progress has been painfully slow.

Unable to see a way of overcoming, the complex political and bureaucratic obstacles required to achieve a Single European Sky, the Europeans have embarked on an intermediate step of forming Functional Airspace Blocks … (F.A.B.)

This would at least allow some consolidation of facilities and functions to reduce costs – and by extension, the fees paid by the airlines.

To illustrate the magnitude of the current European system’s inefficiencies, it may be sufficient to note that the United States’ A.T.C. delivers approximately twice the volume of all European ATCs – for the same price!

There are today, in Europe, some 27 air navigation authorities and a number of military air control centers.

And, at present, the European States are planning to regroup their ATCs into nine (9) multinational Air Space Blocks covering almost all of Europe.

But then, once the integration is completed within each of these Functional Blocks there will remain the task of ensuring that the nine will efficiently work together.

On the technical side progress is achieved more easily.

The Single European Sky ATM Research (S.E.S.A.R.) program was also launched in 2004 to provide Europe with “high performance air traffic infrastructure and technology” to meet the requirements of the future.

The 4-D Trajectory Management is on track, and is one of the more significant projects to deliver flight optimization.

This will require further coordination between airborne and ground systems.

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The modernization of air traffic services is progressing in other regions.

In the U.S.A., as part of the NextGen air navigation improvement program, the F.A.A. has now awarded a contract to accelerate the development of satellite-based procedures.

These will allow aircraft to fly more directly to their destinations – and more efficient approaches into an airport.

In Asia, the concept for a seamless Asian Sky (S.A.S.) has achieved widespread, high level support.

S.A.S. does not mean one owner – but a need to agree that the airspace boundaries need to be transparent, or seamless.

Fortunately, Asian governments have progressive aviation policies. China, Japan and India will each provide valuable input, and will enable smaller countries … to find their place in the overall picture.

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A decade or so ago, many airlines – particularly the low costs – began to offer their products directly through the web.

The advantages seemed obvious, and a number of experts were predicting the death of the travel agents.

But it is now clear that the travel agents are going to outlive those experts.

The role of the travel agent is not decreasing. More than 60 percent of all airline tickets are still being sold through travel agents.

G.D.S’s, which were also predicted to become obsolete, have evolved and today also operate direct sites for airlines.

The travel agents are being paid more money to use the G.D.S’s., which are probably their prime customers.

However, there is a need for the travel agents to develop a response to the rapidly increasing use of mobile devices.

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The increasing importance of ancillary products to airline revenues is introducing a new dimension.

To what extent should travel agents and G.D.S.’s be involved in retailing ancillary products such as seat selection, food, entertainment etc. – in addition to those traditionally related to the trip, for example hotels, car rental, theatre tickets etc.?

The love-hate relationship between the airlines and the G.D.S.s is continuing, with strong opposition by all airline associations to a U.S. DoT proposed mandate requiring all airlines serving the U.S.A. to distribute all their content and services through Global Distribution Systems (G.D.S’s).

Meanwhile, Google is de facto becoming a distribution channel in its own right, with the additional capabilities of proposing more products and services on the basis of your purchase history and preferences.

Some eleven years ago, Ryanair C.E.O., Michael O’ Leary, boasted that eventually his airline would be making so much money from ancillary revenues that he would be able to afford to fly people for free -perhaps based on the expectation that gambling would be allowed on board, which of course has not happened.

Nevertheless, over time airlines have continued to come up with many more ways to boost their so-called “ancillary revenues”.

An annual study carried out by IDEA Works, sponsored by AMADEUS, has been tracking those revenues.

This year’s report shows that the total revenue collected by fifty carriers reporting ancillary revenues as a separate category was 22.6 billion US dollars in 2011 – up from the 13.5 billion dollars reported two years earlier.

Some observers believe that these revenues may be starting to top out, but there may still be some room by varying prices by flight based on demand, just as carriers have done with yields.

Meanwhile, Mr. O’ Leary is no longer talking about flying his customers for free!

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Among other aspects being explored, airlines may be able to gain some additional revenues for connectivity on board.

By the end of 2011, 1,885 aircraft were equipped with Wi-Fi , and the current forecast is for 6,100 airplanes to be equipped by 2015.

Today, most Wi-Fi equipped airplanes fly in North America. All major U.S. airlines are – or plan to be – totally equipped.

The number of passengers who chose to pay for the Wi-Fi service increased to 7 percent by the end of 2011 from some 4 percent in 2010.

The growth is, in part, driven by the rapid penetration of smart phones and other communication devices such as tablets.

In-flight Wi-Fi revenues are expected to exceed 15 billion US dollars in 2015.

Connection services are provided by Chicago-based GoGo Inc., which covers all of Continental U.S.A., Canada and Alaska.

This represents only some 2 percent of the earth’s surface, but Geneva-based OnAir plans to offer near global coverage using INMARSAT satellite.

The price is not cheap, but the coming boom in air-to-ground and satellite broadband capacity should drive prices down.

Despite all those efforts of frequent cost restructuring, mergers, acquisitions, alliances, joint ventures, experimenting with different business models, hybrids and subsidiaries – the aviation industry as a whole continues to fail the profitability test!

With a few exceptions – far too few – the airline industry is not profitable, and does not consistently earn its cost of capital.

Many airports are also unprofitable – and overly constrained in their expansion.

Air Navigation Services are under pressure, and need to be encouraged to regroup.

For a few governments – and the Gulf States are a good example – commercial aviation is a strategic industry, and plays a major role in the development of their respective countries.

But unfortunately, for many governments – particularly in Europe and North America – commercial aviation and air travelers are regarded as the proverbial “milking cow”.

And the cow is getting thinner, and thinner!

And yet the socio-economic impact of air transport is simply huge on every country, region, and indeed the world.

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

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

The Oxford Economic study concluded that aviation is a key factor facilitating world trade, helping countries to participate in the global economy, and increasing their access to international markets.

While it may be a giant undertaking to convince all governments to be more supportive of our industry, we can make significant progress by working together better.

As partners of the broader travel, transportation and tourism world, we would all of course benefit from more enlightened government policies.

But we can also help each other to become more efficient and more profitable, and seek greater synergies to our mutual benefit.

This is an important dimension which we will begin to explore more thoroughly in the Friday afternoon session of this Conference.

In closing, ladies and gentlemen, I am reminded that having lost twenty thousand pounds in the South Sea bubble in 1720, Sir Isaac Newton has been quoted saying

“I can calculate the motion of heavenly bodies, but not the madness of people.”

If he had lived today – and invested in our industry – he may well have said the same thing about the way we manage airlines, which leads me to conclude that most of us must be in this industry for the romance and the fun – but certainly not for the money!

Yet we must be looking forward to a brighter tomorrow!

Thank you!

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

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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!

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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!

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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”.

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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.

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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.

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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!

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

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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.

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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.

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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.

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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.

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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.

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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!

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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.

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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.

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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.

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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.

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

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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”.

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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.

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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.

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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.

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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!

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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!

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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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 ! »

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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.

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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.

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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.

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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.

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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 !

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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.

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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.

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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.

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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.

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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.

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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 ?

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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.

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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.

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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.

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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 !