Robin Hayes (JetBlue CEO) – IATA AGM Opening Press Briefing (Oct 2021)
Chapters
00:02:13 IATA AGM 2022: Challenges, Commitments, and Roadmap to
IATA’s Democratic Process and Net Zero Resolution: IATA operates as a democratic organization, passing resolutions by majority vote, while allowing individual airlines to set their own targets. The recent net zero by 2050 resolution reflects the challenges of decarbonizing the airline industry due to the lack of short-term solutions. There is a growing belief in a credible path to net zero by 2050, with some member airlines aiming for earlier targets. IATA respects the commitment and contribution of Chinese carriers, despite their concerns about the 2050 deadline.
In-Person AGM in Shanghai: IATA intends to hold the next AGM in Shanghai from June 17th to 19th, 2023, despite ongoing quarantine measures in China. Chairman Liu of China Eastern has extended an invitation for an in-person event, though no guarantees can be given in the current environment. The intention is to return to the normal routine of holding AGMs in June and not rearrange the event to a later date.
Clarification on Net Zero Commitment: The IATA policy aims for industry-wide net zero by 2050, and all engagements with relevant bodies will reflect this goal. Individual airlines are free to pursue their own methods to achieve net zero, with some already investing in carbon capture and sequestration.
IATA’s Path to Net Zero: IATA is working on identifying a path for the industry to achieve net zero by 2050, providing a credible scenario for decarbonization. The path will allow individual airlines to choose their own methods and set more ambitious targets if desired. United and FedEx, both IATA board members, are heavily investing in carbon capture and sequestration technologies.
00:07:36 Airline Industry Demands Clarity on Travel Restrictions
IATA’s Net-Zero Goal: IATA’s (International Air Transport Association) policy is to achieve net-zero emissions by 2050. The organization is promoting sustainable aviation fuels and carbon capture and sequestration technologies as key strategies to reach this goal. IATA is collaborating with airlines and stakeholders across the industry to find comprehensive solutions for reducing carbon emissions.
IATA’s Position on COVID-19 Travel Restrictions: IATA advocates for the removal of travel restrictions for fully vaccinated individuals. The organization believes that the risk of contracting COVID-19 on an aircraft is minimal. IATA highlights the improved quality of testing and the low positivity rates among air travelers as evidence to support its position.
IATA’s Risk-Based Approach to Travel: IATA emphasizes the importance of a risk-based approach to travel restrictions, considering factors such as vaccination rates and infection levels. The organization has conducted extensive research to quantify the risks associated with air travel and cross-border travel. This research suggests that the risk of altering the dynamics of COVID-19 in a destination country due to air travel is very low.
IATA’s Call for Data-Driven Decision-Making: IATA calls for data-driven decision-making when it comes to travel restrictions. The organization cites the UK as an example, where a large number of PCR tests conducted among air travelers resulted in a positivity rate significantly lower than the general population. IATA believes that such data should guide policy decisions related to travel restrictions.
Changing Risk and Mitigating Measures: The risk of a traveler changing the dynamic of the coronavirus in the destination country is low. Antigen testing is considered a good mitigation measure, as it is less complex and expensive than PCR tests. Data shows that the industry is safe, and measures can be implemented to mitigate risks without causing significant restrictions or costs.
Harmonization and Simplification of Travel Requirements: Governments should create a more harmonized and consistent approach to COVID-19 travel requirements. This would reduce confusion among travelers and ease the travel process. The IATA Travel Pass can adapt to any requirement, but a standardized set of certifications would simplify the process for travelers.
IATA Travel Pass and Confusion among Travelers: The UK PLF, with its 36 questions, exemplifies the confusion created by varying requirements. Travelers are often confused about what tests, forms, and procedures are required for their journey. While restrictions were necessary in early 2020, the risk has since changed due to vaccination, treatment knowledge, and reduced strain on health systems. The actions to respond to the risk should adapt accordingly.
Challenges of Achieving Emissions Targets: Some airlines, especially in Africa and parts of Asia, face economic survival challenges while aiming for zero emissions. The IATA board and member airlines provided a pathway with five-year intervals to achieve emissions targets. The pathway considers available and future technologies, but it’s not the only way to reach the goals.
00:16:13 Aviation Industry's Path to Achieve Net Zero Emissions by 2050
IATA’s Net Zero Resolution: IATA’s recent resolution aims to achieve net-zero carbon emissions by 2050.
Hydrogen-Powered Aircraft: Airbus’s commitment to developing hydrogen-powered aircraft by 2035 shows promise. Boeing’s perspective suggests more complexity and difficulty in hydrogen-powered aircraft. Sustainable hydrogen production is crucial to the success of this technology.
Immediate Opportunities for Decarbonization: Corsia and sustainable aviation fuels offer immediate opportunities for offsetting emissions. Air traffic control inefficiencies can be addressed for further improvement.
Regional Variations in Decarbonization Strategies: Different airlines may adopt varying approaches to decarbonization based on their circumstances. Some airlines may prioritize carbon sequestration, while others may explore other options.
Consumer Influence on Airline Participation: Consumers’ preferences will ultimately influence airlines’ participation in decarbonization efforts. Airlines that fail to adopt sustainable practices may face consumer backlash.
00:19:52 Financial Implications of Achieving Net Zero Carbon Emissions in Aviation
Consumer Perception and Airline Commitment: Airlines recognize the need to reduce their carbon footprint and are committed to achieving net-zero emissions. Consumers positively recognize airlines’ commitment to reducing emissions. However, consumers lack a clear understanding of how airlines plan to achieve these goals.
Cost Implications and Financial Burden: The estimated gross cost of achieving net-zero emissions by 2050 is approximately $2 trillion. This cost includes investments in sustainable aviation fuels, carbon capture and sequestration technology, and new aircraft. Airlines are already facing economic fragility, and this additional financial burden may pose challenges.
Impact of Rising Oil Prices: Oil prices have recently reached nearly $80 per barrel, affecting the recovery of airlines worldwide. Forward curves suggest that oil prices may decline in 2022, offering some relief to airlines.
00:23:17 Perspectives on COVID-19 Vaccination Requirements in Air Travel
Fuel Price Impact: The potential impact of increasing fuel prices on the forecasted airline growth is uncertain due to the lack of hedging among airlines. The effects of fuel price increases would affect all airlines, making it a non-competitive issue.
Vaccination Requirements: Industry support for vaccination, recognizing its importance in mitigating risks. Concerns about operational complexities, testing capacity, and managing exemptions for domestic vaccine mandates. Questioning the rationale for mandating vaccination in air travel while other forms of transport may not have similar requirements. IATA’s stance against mandatory vaccination for domestic and international markets due to global vaccine accessibility issues.
Rapid Antigen Testing: Advocating for sensible testing regimes as an effective risk mitigation measure. Promoting the use of rapid antigen tests, acknowledging improvements in reliability.
00:29:13 Aviation Industry Leaders Discuss Sustainability and Mask Mandates
Willie Walsh’s Perspective on New Aircraft and Sustainable Fuels: Walsh believes that despite the long-term commitment to new technologies like hydrogen-powered aircraft, sustainable aviation fuels (SAF) can significantly reduce carbon emissions in the near term. The industry should focus on increasing SAF availability while simultaneously pushing for advancements in new technologies. Airlines will consider the availability of new technologies when making aircraft ordering decisions, similar to past decisions based on efficiency improvements. The industry’s commitment to net-zero emissions by 2050 provides time for adaptation and consideration of various solutions, including SAF, carbon capture, and potential undiscovered options.
Robin Hayes’ Perspective on Competition and Environmental Commitment: Hayes emphasizes the industry’s unified commitment to sustainability and the importance of achieving net-zero emissions. Competition among airlines to achieve sustainability goals is seen as a positive factor that can drive innovation and accelerate progress toward the shared goal. Airlines increasingly recognize the value of communicating their environmental commitment to customers, as it becomes a key part of their brand identity.
00:33:45 IATA and JetBlue on Masks, Partnerships, Recovery, and Slot Waivers
IATA and JetBlue Executives Discuss Mask Mandates, Industry Recovery, and Government Restrictions: IATA and JetBlue executives emphasized the importance of removing mask mandates on aircraft once scientific evidence demonstrates they are no longer effective in reducing the risk of COVID-19 transmission. They stressed that mask mandates should not continue indefinitely simply because they were implemented in 2020. While masks played a crucial role in restoring confidence and encouraging people to fly during the early stages of the pandemic, their effectiveness diminishes as case counts and vaccination rates increase. International travel recovery remains a challenge due to ongoing government restrictions, not the virus itself. The industry is forecasting losses in 2022, with a profitable North American sector and loss-making operations outside North America. The pace of recovery in international markets depends on the relaxation or removal of government restrictions. IATA and JetBlue executives expressed support for slot waivers at JFK and LaGuardia airports, particularly for international travel, to help airlines recover and rebuild their networks.
JetBlue’s Northeast Alliance (NEA) with American Airlines Faces Legal Challenge: JetBlue executives defended the NEA, emphasizing its positive impact on competition, lower fares, and increased flight options in the Northeast. They argued that blocking the NEA would harm competition and result in JetBlue losing flights and slots, which would benefit American Airlines. The executives expressed confidence in their legal case and highlighted the irony of the Department of Justice (DOJ) seeking to block an agreement that promotes competition.
Indian Government’s Review of Bilateral Air Services Agreements: The Indian government’s review of bilateral air services agreements was briefly mentioned, but the discussion was deferred to an offline conversation due to time constraints.
Slot Waivers at JFK and LaGuardia Airports: IATA and JetBlue executives discussed slot waivers at JFK and LaGuardia airports, with IATA expressing support for their continuation to aid in the industry’s recovery. JetBlue had a slightly different position on this issue, reflecting IATA’s democratic nature and the diverse perspectives within the organization.
00:41:14 Protecting Airline Slots During Border Closures
Unreasonable Slot Risk: Airlines should not face slot risks when they are prevented from flying due to border closures. Limited options exist for airlines to circumvent this issue, especially for those with specific market dependencies, such as Finnair’s reliance on China. Preserving slots is crucial for airlines, and losing them due to circumstances beyond their control is unjust.
EU’s Conservative Approach: The EU has been excessively cautious in addressing slot alleviation, leading to potential harm for airlines. Airlines should not be forced to operate flights solely to maintain critical assets like slots. Advocating for pragmatic solutions where airlines facing flying restrictions should not have their slots jeopardized.
Addressing Price Gouging: Airports, often operating as monopolies or quasi-monopolies, are engaging in price gouging. Schiphol’s attempt to recover lost revenue by charging airlines extra is unreasonable and unacceptable. Airlines have taken drastic measures to survive the crisis, and expecting them to bear the entire burden of recovery is unfair.
Consequences of Price Gouging: Increasing airport charges will slow down the recovery of the aviation industry. Calling out and challenging airports that engage in price gouging is necessary to protect airlines and the industry as a whole.
00:45:14 IATA World Air Transport Summit Media Q&A
Closing Remarks: The press conference for the World Air Transport Summit has ended. A concluding press conference will be held tomorrow at the end of the Summit.
Media Contact Information: Tony Quansel’s team is available at the media center. Additional information and supplementary materials are available on the IATA website in the press room.
Abstract
Article “Navigating the Skies of Change: IATA’s Resolution for a Greener, Safer, and More Unified Air Travel Future”
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The International Air Transport Association (IATA) is charting a new course for the global airline industry, aiming for net-zero emissions by 2050, enhancing COVID-19 safety measures, and promoting harmonized travel protocols. This ambitious initiative is marked by individual airlines setting their own carbon reduction targets, with some like United and FedEx investing in carbon capture and sequestration. The 2023 Annual General Meeting (AGM) in Shanghai symbolizes a return to normalcy in the industry, despite current uncertainties. Meanwhile, IATA’s advocacy for easing travel restrictions for vaccinated individuals and adopting a risk-based approach for others underscores its commitment to balancing safety with operational efficiency.
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Net Zero Emissions by 2050: A Daunting yet Achievable Goal
IATA’s resolution for net-zero carbon emissions by 2050 presents both a significant challenge and an opportunity for the airline industry. With airlines free to choose their paths to this goal, strategies range from sustainable aviation fuels (SAFs) to hydrogen-powered aircraft. However, the $2 trillion investment required, combined with the recent surge in oil prices, highlights the financial and practical complexities of this endeavor. Despite economic struggles, airlines like Airbus are optimistic about hydrogen aircraft by 2035, while others focus on immediate solutions like improving air traffic control efficiency.
IATA operates as a democratic organization, passing resolutions by majority vote while allowing individual airlines to set their own targets. The recent net zero by 2050 resolution reflects the challenges of decarbonizing the airline industry due to the lack of short-term solutions. There is a growing belief in a credible path to net zero by 2050, with some member airlines aiming for earlier targets. IATA respects the commitment and contribution of Chinese carriers, despite their concerns about the 2050 deadline.
IATA is working on identifying a path for the industry to achieve net zero by 2050, providing a credible scenario for decarbonization. The path will allow individual airlines to choose their own methods and set more ambitious targets if desired. United and FedEx, both IATA board members, are heavily investing in carbon capture and sequestration technologies.
Hydrogen-powered aircraft are emerging as a promising technology for achieving net-zero emissions. Airbus is committed to developing hydrogen-powered aircraft by 2035, with a long-term goal of zero-emission aviation. Boeing, however, has expressed skepticism about the feasibility of hydrogen-powered aircraft, citing complexity and challenges in producing and storing hydrogen. Sustainable hydrogen production is crucial to the success of this technology.
In addition to hydrogen-powered aircraft, airlines can also pursue immediate opportunities for decarbonization, such as the use of sustainable aviation fuels (SAFs) and Corsia. Air traffic control inefficiencies can also be addressed for further improvement. Given the complex and multifaceted nature of decarbonization in the aviation industry, different airlines may adopt varying approaches based on their circumstances. Some airlines may prioritize carbon sequestration, while others may explore other options. Ultimately, consumer influence will play a significant role in driving airlines’ participation in decarbonization efforts. Airlines that fail to adopt sustainable practices may face consumer backlash.
Willie Walsh’s Perspective on New Aircraft and Sustainable Fuels:
– Walsh believes that despite the long-term commitment to new technologies like hydrogen-powered aircraft, sustainable aviation fuels (SAF) can significantly reduce carbon emissions in the near term.
– The industry should focus on increasing SAF availability while simultaneously pushing for advancements in new technologies.
– Airlines will consider the availability of new technologies when making aircraft ordering decisions, similar to past decisions based on efficiency improvements.
– The industry’s commitment to net-zero emissions by 2050 provides time for adaptation and consideration of various solutions, including SAF, carbon capture, and potential undiscovered options.
The 2023 AGM in Shanghai: A Symbol of Resilience and Hope
The decision to hold the 2023 AGM in Shanghai from June 17th to 19th reflects the industry’s resilience and adaptability in the face of uncertainty. The in-person nature of the event, while not guaranteed, demonstrates a collective aspiration for a return to pre-pandemic normalcy, highlighting the sector’s determination to overcome current challenges.
Closing Remarks:
– The press conference for the World Air Transport Summit has ended.
– A concluding press conference will be held tomorrow at the end of the Summit.
IATA intends to hold the next AGM in Shanghai from June 17th to 19th, 2023, despite ongoing quarantine measures in China. Chairman Liu of China Eastern has extended an invitation for an in-person event, though no guarantees can be given in the current environment. The intention is to return to the normal routine of holding AGMs in June and not rearrange the event to a later date.
—
COVID-19 and Air Travel: Advocating for Sensible Measures
IATA’s stance on COVID-19 restrictions reflects a data-driven approach to ensuring passenger safety without impeding travel. The organization advocates for the removal of travel restrictions for fully vaccinated individuals and a risk-based approach for others. With studies showing minimal COVID-19 transmission risks in air travel, IATA calls for the harmonization of travel requirements and the adoption of digital solutions like the IATA Travel Pass to streamline processes.
IATA emphasizes the importance of a risk-based approach to travel restrictions, considering factors such as vaccination rates and infection levels. The organization has conducted extensive research to quantify the risks associated with air travel and cross-border travel. This research suggests that the risk of altering the dynamics of COVID-19 in a destination country due to air travel is very low. IATA calls for data-driven decision-making when it comes to travel restrictions. The organization cites the UK as an example, where a large number of PCR tests conducted among air travelers resulted in a positivity rate significantly lower than the general population. IATA believes that such data should guide policy decisions related to travel restrictions.
IATA advocates for the removal of travel restrictions for fully vaccinated individuals. The organization believes that the risk of contracting COVID-19 on an aircraft is minimal. IATA highlights the improved quality of testing and the low positivity rates among air travelers as evidence to support its position.
The risk of a traveler changing the dynamic of the coronavirus in the destination country is low. Antigen testing is considered a good mitigation measure as it is less complex and expensive than PCR tests. Data shows that the industry is safe, and measures can be implemented to mitigate risks without causing significant restrictions or costs. Governments should create a more harmonized and consistent approach to COVID-19 travel requirements. This would reduce confusion among travelers and ease the travel process. The IATA Travel Pass can adapt to any requirement, but a standardized set of certifications would simplify the process for travelers.
IATA and JetBlue Executives Discuss Mask Mandates, Industry Recovery, and Government Restrictions:
– IATA and JetBlue executives emphasized the importance of removing mask mandates on aircraft once scientific evidence demonstrates they are no longer effective in reducing the risk of COVID-19 transmission.
– They stressed that mask mandates should not continue indefinitely simply because they were implemented in 2020.
– While masks played a crucial role in restoring confidence and encouraging people to fly during the early stages of the pandemic, their effectiveness diminishes as case counts and vaccination rates increase.
– International travel recovery remains a challenge due to ongoing government restrictions, not the virus itself.
– The industry is forecasting losses in 2022, with a profitable North American sector and loss-making operations outside North America.
– The pace of recovery in international markets depends on the relaxation or removal of government restrictions.
– IATA and JetBlue executives expressed support for slot waivers at JFK and LaGuardia airports, particularly for international travel, to help airlines recover and rebuild their networks.
—
The Financial and Operational Impact of the Pandemic
The airline industry’s financial health has been significantly impacted by the pandemic, with rising oil prices adding to the challenges. However, leaders like Willie Walsh are optimistic that these increases will not substantially hinder air travel growth. The industry’s recovery is further complicated by operational complexities like vaccine and testing requirements for passengers, which IATA argues should be balanced with practicality and fairness.
Some airlines, especially in Africa and parts of Asia, face economic survival challenges while aiming for zero emissions. The IATA board and member airlines provided a pathway with five-year intervals to achieve emissions targets. The pathway considers available and future technologies, but it’s not the only way to reach the goals.
Consumer perception of airlines’ efforts to reduce carbon footprint is generally positive, although there is a lack of clear understanding about how these goals will be achieved. The estimated gross cost of achieving net-zero emissions by 2050 is approximately $2 trillion, including investments in sustainable aviation fuels, carbon capture and sequestration technology, and new aircraft. This financial burden may pose challenges to airlines already facing economic fragility. Rising oil prices, currently hovering around $80 per barrel, also impact airline recovery, although forward curves suggest a potential decline in 2022.
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The Future of Air Travel: Adapting to a Changing World
As the risk profile of COVID-19 evolves with increased vaccination and treatments, IATA emphasizes the need for corresponding changes in response measures. The organization also recognizes the growing importance of environmental performance as a competitive factor among airlines, with SAFs and new aircraft technology being key to achieving sustainability goals. However, the path to net zero is not uniform, with airlines choosing different strategies based on feasibility and consumer preferences.
The impact of fuel price increases on forecasted airline growth is uncertain due to the lack of hedging among airlines. The effects of fuel price increases would affect all airlines, making it a non-competitive issue. The industry supports vaccination as a risk mitigation measure, while also addressing concerns about operational complexities, testing capacity, and the rationale for mandatory vaccination in air travel compared to other forms of transport. IATA opposes mandatory vaccination for domestic and international markets due to global vaccine accessibility issues. Rapid antigen testing is advocated as a sensible risk mitigation measure, with improvements in reliability.
Robin Hayes’ Perspective on Competition and Environmental Commitment:
– Hayes emphasizes the industry’s unified commitment to sustainability and the importance of achieving net-zero emissions.
– Competition among airlines to achieve sustainability goals is seen as a positive factor that can drive innovation and accelerate progress toward the shared goal.
– Airlines increasingly recognize the value of communicating their environmental commitment to customers, as it becomes a key part of their brand identity.
—
Concluding Remarks: A Unified Vision for Recovery and Sustainability
In conclusion, IATA’s initiatives reflect a comprehensive strategy to not only recover from the pandemic but also to move towards a more sustainable, efficient, and passenger-friendly future. The organization’s advocacy for fair slot allocation policies, criticism of airports’ pricing practices, and call for government collaboration underlines its role as a unifying force in the face of diverse challenges. As the industry looks towards the future, the upcoming concluding press conference and available online resources will provide further insights into these evolving dynamics.
This article aims to encapsulate the multifaceted nature of the challenges and strategies outlined by IATA, highlighting the organization’s pivotal role in shaping the future of air travel amidst unprecedented times.
Media Contact Information:
– Tony Quansel’s team is available at the media center.
– Additional information and supplementary materials are available on the IATA website in the press room.
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