The World Routes Strategy Summit's first session ‘Critical issues in air transport today – are we making progress?’ saw much debate about where the industry is currently at, and focused on the pressing matters it faces.
Moderated by BBC World News presenter, Aaron Heslehurst, a live poll was held where delegates had the opportunity to vote for what they felt were the most important issues. The poll found the most critical was infrastructure challenges, second was aviation profitability, third was safety/security, fourth was taxation and fifth was oil price stability.
Safety/security was discussed at length at the start of the session, with the recent air transport tragedies of MH17 and MH370 coming under the spotlight at the start of discussions by panellists. Datuk Badlisham Ghazali, managing director of Malaysia Airports Holdings Berhad (MAHB), asked for more visibility from aviation bodies on what is being done by the industry to increase safety, and make sure another tragedy does not take place, which he says is concerning him.
"The industry needs to move forward in more visible way. Response has not been as visible as what I had hoped for," he explains, referring to the recent MH17 incident, but he did welcome action on safety by ICAO and other aviation bodies, although feels it should be propagated more to the public what is being done to avoid a repeat.
Panellists were also ask why aircraft were flying in the conflict zone in eastern Ukraine but others not, and Thomas Windmuller, SVP airports, passenger and cargo services at IATA, queried why some airlines had information not to fly, but others had not received the same vital information.
Infrastructure challenges proved the most important issue for delegates voting, but investment in projects were said to vary across the globe, such as in China where money is being pumped into developing infrastructure, but it is less in other regions, while whether passengers shoulder the cost of improvements also came under the microscope.
Profitability battles in aviation was also high on the agenda, and in the opinion of Windmuller, the industry is in a good time, but there are challenges to become profitable: "We are in a period of sustained growth in volume, but not necessarily profitability. The number of airlines that recover their capital cost is very small," he explains
“The problem is not just airlines, it is aviation. There are very few parts and components that are making big money. These include airports, and air navigation services, who do not make a profit, and do not cover their long-term capital costs,” he adds.
According to panellist, Azul chief strategy officer, Trey Urbahn, airlines can be profitable if they are disciplined with their costs, and he explains his carrier has managed to achieve this, and adds: "The industry is as well positioned as it has ever been." He says the biggest issue facing the industry in Brazil is taxation, as 36 per cent of his airline’s profits go on taxes alone, and explains that Azul is working hard with the government to address taxation, but he wants to see the taxation garnered reinvested in infrastructure.
Meanwhile, Ghazali told attentive delegates that the aviation industry in Asia is in a “good time”, with passenger traffic booming, while he expects this to continue for the next 10-15 years, but it faces all five of the challenges.
Heslehurst also earlier told World Routes delegates that aviation now supports 58 million jobs, there are 50,000 routes, while it is a $7 trillion industry, and if it was a country it would be the 21st largest based on GDP.