Date: 15 September 2007
McGill Conference - Aviation Security and Environment by Giovanni Bisignani
It is a pleasure to be here in Montreal, IATA’s home. A home that we share with some very important partners: ICAO
and McGill University.
The good news is that hard work is improving airline prospects and the industry will show a combined profit this year.
But running an airline remains a tough business. A US$5.1 billion return on revenues of US$450 billion is no reason
to celebrate. The credit crunch shows how quickly fortunes can change. Between fuel and infrastructure, 39% of our
cost base is out of our control. The outdated bilateral system limits commercial freedom and despite important recent
developments we have US$200 billion of debt.
Change
Fortunately, some important changes are happening. IATA launched the Simplifying the Business initiative in 2004
just before the last Assembly.
Just look at what we have achieved since then:
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E-ticketing went from 16% to 84% and paper tickets will disappear worldwide in 259 days. So, if you
travelled to Montreal using a paper ticket, frame it, it will soon be a nice souvenir!
E-freight pilots are underway in five key markets: Singapore, Hong Kong, the UK, Canada and the
Netherlands and others are lining up to make it a reality by 2010.
Common Use Check-in Kiosks operate at 78 airports.
68 airlines issue bar coded boarding passes and four airports are experiencing the benefits of RFID.
Most importantly, passengers are enjoying greater convenience as the industry reduces costs. IATA is now looking to
the next stage: A global self-service strategy to join the technology elements into a seamless process and a new
approach for baggage management.
Governments and the ICAO Agenda
With global standards, air transport has grown into a mass transit system used by 2.2 billion people annually,
supporting 32 million jobs and US$3.5 trillion of economic activity annually. Air transport is crucial to our planet so
decisions made in the coming weeks will have an impact far beyond the industry itself.
Today I will address the top three agenda items for the Assembly:
Safety, security and the environment
Safety
Let’s start with safety—our number one priority. 2006 was the safest year ever with 1 hull-loss for every 1.5 million
flights. The accident rate improved 50% in the last decade but every accident reminds us that we must do better. We
have had many reminders recently and it will take all of our efforts to keep driving the accident rate down.
IATA and ICAO are effective partners on safety. Together we are addressing critical situations in Africa, Brazil,
Indonesia and Russia.
ICAO’s Global Aviation Safety Plan is based on the Safety Roadmap developed by IATA and industry partners. Our
common target is zero accidents. Transparent global standards are the only way to get there. ICAO’s Universal
Safety Audit Programme plays an important role, growing in relevance with increasing transparency.
IOSA, the IATA Operational Safety Audit is a complementary programme for airlines - with over 160 airlines now on
the IOSA Registry. Many governments from Chile to Turkey use IOSA to enhance their safety oversight. It’s free and
it’s effective and I encourage all governments to make use of this great tool. To help airlines implement IOSA
standards, IATA developed and published the Integrated Airline Management Systems. And where extra help is
needed our Partnership for Safety Programme is helping cover the gap in Latin America, Africa, Indonesia and
Russia.
Today, I am pleased to announce that we are expanding on the success of IOSA. To improve safety amongst ground
handlers, we are launching ISAGO - the IATA Safety Audit for Ground Operations. It is the only global safety
standard for this important part of the industry. It will help reduce the US$4 billion in costs from ground handling
accidents, US$11 billion if you include personnel and medical costs. We will publish the standards this year and the
first audit will take place in 2008.
Like IOSA, our goal with ISAGO is to improve safety and quality while reducing the number of redundant audits. I will
be encouraging the Assembly to recognise the benefits that IOSA has delivered and support our efforts on ISAGO.
Security
Global standards are critical for security. Airlines are much more secure today than in 2001 but the system is still a
US$5.6 billion uncoordinated mess. The industry is spreading global best practice with Security Management
Systems that complement ICAO’s security programme. They are now an IOSA requirement - mandatory for all IATA
members. Governments are not moving fast enough or broadly enough. Two examples:
 First, the US-EU agreement on passenger data was important, ensuring that airlines will not break European
privacy laws to comply with US security requirements. However, there is no global harmonisation of data
requirements.
 Second, the common approach to liquids and gels is a step in the right direction, but the screening process
is not harmonised: shoes on or off? Laptops in or out?
And there are still too many unique rules. The UK’s one-piece restriction for hand luggage is inconvenient
and counter-productive. I do see some hope in ICAO. The success with liquids and gels proves that ICAO
can deliver results.
It is time to build on that.
Annex 17 gives ICAO a platform to develop a more relevant role by promoting a risk-based approach to security
among governments. We need a constant level of vigilance that is constantly adjusted to deal with specific threats or
events. To achieve this, we must develop a common risk-assessment methodology. Identifying high and low-risk
passengers and freight will allow us to devote time and resources better. Known-shipper and known-traveller
programmes help identify the low-risks.
Advanced Passenger Information and Passenger Name Record access will help find the high-risks but we need data
exchange and protection protocols. So we will be asking the Assembly to endorse a risk-based systems approach to
security for states and establish a common risk assessment methodology.
Achieving this will be a giant step forward to cleaning up the mess and to making security both effective and
convenient.
Environment
Environment tops the industry’s political agenda—despite our good track record. We are 2% of global carbon
emissions. Fuel efficiency improved 70% in the last 4 decades. The IATA fleet will achieve at least a further 25%
improvement in fuel efficiency by 2020 and new aircraft are expected to be 50% more fuel efficient in 2020.
Demand for travel is growing at 5-6% a year but efficiency will limit our contribution to global CO2 to 3% even in
2050. No matter how you look at it
airlines are a small part of a big issue. Unfortunately, we were silent in our success and now we have a potential
nightmare of taxes and charges.
It started with the EU draft proposal on Emissions Trading followed by a billion pound addition to the UK’s Air
Passenger Duty.
Environment: The Strategy
IATA’s 240 members agreed to a four point strategy to guide us:
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One: Invest in new technology
Two: Build and use efficient infrastructure
Three: Operate planes effectively
Four: Once we have achieved these three let’s look at economic measures. First, positive measures to
encourage technology investments but also working with governments to define a global voluntary
emissions trading scheme.
The strategy is not just words - we have delivered real results. In 2006 IATA’s fuel programme saved a lot of CO2:
 6 million tonnes by shortening 350 air routes
 8 million tonnes from IATA GO teams working with airlines to implement best practices
 A million tonnes through better operational procedures
We did our homework, but two critical components were missing: effective communications and a vision. We are
working with our members to communicate with passengers and through the media correcting false reports and
underlining achievements. In the coming months IATA will have information stands at airports across Europe and our
cross-industry partnership—through the Air Transport Action Group (ATAG) is helping all industry partners to speak
with a unified voice.
Environment: The Vision
Aviation’s carbon footprint is growing and that is no longer politically acceptable for any industry. We must develop a
common vision for where our industry should be in 50 years.
For me, there is only one answer which I presented at our AGM in June. We must become an industry that does not
pollute with carbon neutral growth in the medium-term and zero emissions in the longer-term. I don’t have all the
answers but some of the potential building blocks for a carbon-free future are here:
 Fuel cells
 Solar powered aircraft and
 Bio-fuels
Importantly our vision has strong support from our technology partners. Engine and airframe manufacturers agree
that we must ultimately aim for zero carbon emissions and the fuel suppliers recognise that this is a priority for their
customers. If we are to make this vision a reality, ICAO leadership is critical, setting challenging but achievable
environmental targets for both governments and industry. This will help states that are truly concerned about the
environment to make progress with current technology and plan future programmes against a technology roadmap.
I see targets working in three core areas:
1. Infrastructure Efficiency
The IPCC estimates that we could improve our environmental performance by up to12% simply by eliminating
inefficiency in air traffic management. A further 6% could be gained with improved operations. Combined, that is
about 120 million tonnes of CO2 every year. Airlines have the right incentives: improving efficiency saves fuel costs
but too often. ATM is a different story.
ICAO adopted a Global Air Navigation Plan which would have enormous environmental benefits. But after 15 years
of talks, the 12 million tonnes of annual CO2 savings from a Single European Sky is still far from reality.
ICAO must set the right incentives and targets for environmental improvements. Let’s cut the infrastructure
inefficiency in half in five years. Much of the ground work is already done with the Global Air Navigation Plan. Now
states and ICAO must set realistic implementation targets.
2. The second element is technology
By using existing technology short-term gains can be achieved: 10% efficiency from better aerodynamics and 5%
from weight reductions. In the medium-term, fleet renewal will improve fuel efficiency 25% by 2020.
In the long-term we need to build greener aircraft and find better ways of powering them.
What is ICAO’s role? First, it is to set performance indicators in the short, medium and long-term for alternative fuels,
engine performance and CO2 emissions. Similar to the way it handled the noise issue a decade ago.
Secondly, ICAO must promote a stable regulatory environment with a predictable investment horizon. Technology
investments are enormous
and if the regulatory framework changes mid-way, all is lost. Governments must commit and stick to technology
goals—set by ICAO or the financing for serious R&D will be too risky.
Thirdly, ICAO should develop a role in encouraging states to invest in research. Governments have cut their R&D
funding to half the 1980 level. This must change.
3. The final element is economic measures
These are not a part of the vision - when we achieve a carbon-free industry they will be irrelevant. But they are a
political reality for many governments. And the drafters of Kyoto identified ICAO as the organisation to lead the
industry. Already we have a great incentive to reduce fuel consumption. Fuel is 28% of our costs.
Positive economic measures can play an important role. Governments can encourage airlines to re-fleet with tax
credits or fund basic research in green technologies. The most pressing economic issue today is emissions trading.
The European proposal was a wake-up call but the environment is a global issue for which regional schemes will
have limited impact. If these are implemented unilaterally the result will be legal and diplomatic fights. ICAO’s role
here is absolutely critical. We need a voluntary global emissions trading scheme that is compatible with carbon offset
schemes and that charges fairly. Airlines should not have to pay for emissions resulting from infrastructure
inefficiency. CAEP (Committee on Aviation Environmental Protection) delivered the technical guidance. The
Assembly must deliver the political solution with a global system based on mutual consent.
Conclusion
The core promise that airlines make to their customers has three dimensions: safety, security and environmental
responsibility. A common vision and global standards are the key to success.
Environment is the issue of the day. We can choose to follow our successful model for safety or we can repeat the
mistakes made in security. This Assembly is the last opportunity for ICAO to deliver global leadership. To be blunt, if
ICAO member states miss this opportunity they put the relevance of ICAO at risk along with 32 million jobs and
US$3.5 trillion in economic activity.
IATA’s vision is the commitment of an industry going beyond carbon neutral growth to a carbon-free future. ICAO and
its member states must overcome local politics and share in this global vision. Airlines can run their own business—
like any other business but it is the responsibility of governments to provide a stable regulatory environment. Failure
to agree on the way forward with ETS would certainly lead to legal battles between Europe and the rest of the world,
the US included. For an industry that is only now returning to profitability this is an uncertainty that is unacceptable.
This Assembly is an opportunity to work together—industry and government, to deliver great results that provide a
solid platform for the future growth of this great industry. This Assembly has a lot of hard work to do. I know that
ICAO’s member states share our sense of urgency on the environment and understand their responsibility to show
leadership.
IATA and the industry are here to support and I am confident that in two weeks time we will have many positive
results to discuss.