Tony Tyler, IATA’s outgoing Director General and CEO, speaks to Graham Newton about his time in the role and his tireless campaign to extol the industry’s benefits
Looking back on your career in aviation, what changes or trends really stood out for you?
I started working at Cathay Pacific in late 1978. I think we had about 14 aircraft at the time. When I left as CEO in 2011 to join IATA, we had more than 150 aircraft if you include Dragonair. And that’s just one airline. Others around us were growing just as fast.
To witness first-hand the industry’s growth in Asia over that period was amazing. And that growth had a positive impact far beyond the airline industry. Asian economies—including China—were expanding, and the people in those economies were becoming more prosperous.
It was obvious what aviation was doing—connecting the region and linking it to overseas markets. Not only was this making Asia accessible to trade, but also it was supporting rapid growth in tourism, both inbound and outbound. In doing so, aviation created tremendous value for Asian economies and this is where the “force for good” messaging that has characterized my time at IATA was born.
Was it a difficult decision to leave Cathay Pacific and join IATA?
I had been with the Swire Group man and boy. I started there when I was 22. And there are not many better jobs in aviation than being the CEO of Cathay Pacific. But I also knew that the work IATA was doing was important and interesting, and that being the IATA Director General was also a great job.
In any case, I had one year left at the Swire Group before I was at what was then the mandatory retirement age. So I swapped one more year in a great job for five more years in another great job. I swapped a front row seat on Asian growth for a front row seat on the global story. That seemed like a good deal to me. I consider myself very lucky.
Was there anything that surprised you about IATA when you joined?
I knew IATA well and had served on the board for several years. But I was still surprised by the sheer volume and range of work in which IATA is involved. Not many people stop to consider the value of the work done by the coding department, for example, but you can’t start an airline without a code. And when you think about the global picture rather than just one airline, you also realize just how important it is to set standards for the industry.
The fact is, if IATA didn’t exist you would have to invent it.
Did you have any specific goals when you started out at IATA?
There was an impression among some in the industry that IATA wasn’t necessarily the easiest partner with which to do business.
My time in Asia sensitized me to the benefits of partnership. I knew how important it was to understand the needs of a partner who may have a different view or cultural background. I brought that philosophy with me and I focused on making IATA a better partner.
How difficult has it been to promote the idea of partnership while still standing firm on matters that are important to airlines?
Our partners are all intelligent, sensible, considerate people. And so are we. Why can’t we do business together?
Of course, there are issues on which we’ll disagree. If you take airport charges, then clearly airport revenues are airline costs. It’s going to be hard to align our views on that subject and there is no point focusing on that.
But in so many other areas, we are fully aligned. Take safety, security and the environment, to name but a few. The focus has to be on the areas where we can work together.
Airlines must defend their corner on issues such as airport charges, but there is no reason why we can’t have a grown-up relationship with all of our partners.
Has the partnership with governments developed as you hoped, or is convincing them of aviation’s benefits still a work in progress?
You have a job for life if you’re involved in lobbying governments about aviation. It will always be a work in progress.
There are a few that get it—Hong Kong, Singapore, and the Gulf countries spring to mind. But even in these places, things aren’t perfect.
With others, you get a few wins here and there, but it isn’t easy. It’s not like a commercial deal, where you haggle over a contract with both sides interested in reaching a conclusion. And it’s not just the Minister that you have to impress, but his or her advisors. You must do your homework and present a compelling story. And once in a while, a little further down the line, you see that a government has done something you suggested.
Are there any programs that you expanded or initiated that you feel will have a big impact on the industry?
Fast Travel and Smart Security will certainly have an impact, and they are both making steady progress. They are evolutionary, though. They don’t need everybody to do everything involved in the programs for there to be value in them.
So while there is great potential, it is not like e-ticketing. There, if you had one partner who kept paper tickets, you would still need the paper infrastructure and the value would be lost. It was all or nothing, and a strategy of compulsion worked.
That’s not been the case with the more recent programs. If we take New Distribution Capability and the forthcoming One Order, they are necessarily evolutionary. However, I am confident that they will be every bit as important as e-ticketing. In fact, their impact will be more profound because it will change the way people shop for air travel. Changing the way your customers buy is the most fundamental change any business can make.
All the other programs are performing well. If I had to choose one where we might need to do something different, it would be IATA’s Safety Audit for Ground Operations (ISAGO). I think in due course we’ll need to find a way to require its adoption.
Global standards in ramp safety rigorously applied would have tremendous benefits for the industry.
Have you deliberately targeted low-cost carriers for IATA membership, or are the increasing numbers on the membership list simply a by-product of the work IATA is doing across the industry?
IATA is open to carriers of all business models. It’s great to see that openness reflected in a membership that is even more representative of the industry as a whole.
It’s been great to see more budget carriers joining. Of course, there needs to be a compelling reason for them to join, and IATA’s work across the industry has played its part in that.
And I’ll make the point that I really don’t like the term “low-cost carrier”. Nobody wants to be a high-cost carrier. I use the phrase “budget carrier”. But to me they are more correctly described as “new model airlines”. The budget sector in 2016 is very different from what it was a decade ago. Their business models have matured. That has made IATA systems and solutions more appropriate to their strategy. And it’s a lot cheaper to use those systems and solutions if you’re a member. Better to be a member than a paying guest.
Of course, IATA will need to keep pace with changes in the industry. We are relevant to our members today. But IATA must continuously earn that relevance by understanding how the needs of all our members are developing.
Are you leaving any unfinished business at IATA?
IATA is the industry standard setter. And the changes that we are driving are transformational. They are big initiatives that don’t fit neatly into a calendar year or the tenure of a Director General. So, there is plenty of unfinished business. And that should not come as a surprise.
The most obvious example is the global carbon-offsetting scheme. It will be a key development for aviation’s future. I am optimistic that we will achieve a global offsetting scheme at the ICAO Assembly later this year.
I will be at the ICAO Assembly with Alexandre [de Juniac, the incoming IATA DG and CEO] in September as IATA transitions to his leadership, so I hope to witness an ICAO agreement on global offsetting.
That will set the industry up to meet its carbon-neutral growth target from 2020. But we must also approach global offsetting in the right way. It should not be “job done” but rather “what next?”
The long-term goal is to cut emissions to half 2005 levels by 2050. I would bet that sustainable alternative fuels for aviation will play a role. They work—we have proved that—but we need to find a way to make them commercially viable.
But 2050 is 34 years in the future. And if you look at how far we have come in the past 34 years, I am sure it is an achievable goal. I have no doubt we will find efficiencies and technologies that are hard to imagine today.
Finally, what next for you?
I will be moving back to Hong Kong, but I won’t be turning my back on aviation. I have already accepted one non-executive role with BOC Aviation—an aircraft leasing company based in Singapore. And I might have time for one or two more. Whatever I decide, rest assured that I will continue to champion aviation as a force for good.