The business of freedom will fly again: Alexandre de Juniac, former IATA Director General and CEO

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Alexandre de Juniac, IATA’s Director General and CEO, stepped down on March 31, 2021. He spoke to Airlines. about his time in office

IATA’s former Director General and CEO, Alexandre de Juniac, talks about his time at IATA, the challenges that the industry faced in the past COVID-hit year, and his optimism for the future of aviation.

What attracted you to the job as IATA Director General and CEO and what did you want to achieve?

I was formerly the CEO of Air France-KLM, so I knew that the majority of airlines usually struggled to break even or perhaps lost money. But the industry at this time was growing strongly and was in a run of profitability that hadn’t been seen before. And as airlines were finally making money that meant there was an opportunity to make a difference and implement needed changes. That attracted me.

Of course, the growing concern was the environment. We established the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) soon after I joined, in October 2016. That was a huge step forward because it was agreed at ICAO level and it gives us a clear path for emissions reduction.

Many of the other challenges were the ones you would expect. We needed to have the right infrastructure to maintain the growth and we needed to keep costs low and have responsible taxation regulations.

Overall, the aim was to do everything possible to promote the industry—which I call the business of freedom. We wanted aviation to have the freedom to connect the world, create jobs, and boost economies.

For that to happen we needed to improve our relationships with governments and other aviation stakeholders. That meant we had to focus and identify the key issues and the potential solutions. It was working well until COVID-19. Nobody foresaw the pandemic.

“Now is the right time for somebody fresh to ensure the recovery doesn’t falter but rather gathers speed. I am sure Willie Walsh is the right person to lead IATA and the industry going forward”

What has it been like leading the industry over the past year?

It was hard because the situation changed so quickly. It is still changing with new variants.

The virus and its spread were unknown quantities. COVID-19 wasn’t even declared a pandemic by the World Health Organization until March 2020. Before that point we thought it might be largely contained within Asia-Pacific and most of the disruption would be in that region.

But things changed rapidly, and IATA shifted into crisis mode within the space of a few days. It was clear we had to have different priorities and different targets.

Remember, the industry was well prepared for a crisis and had all the right elements in place. We had successfully dealt with pandemics in the past like SARS and H1N1 (bird flu) but COVID-19 was more extreme by several orders of magnitude.

The challenge was made more difficult by the approach of governments. There was no consistency in governments’ responses. There was total disarray and to a large extent that is still the case. In other words, we have got an extremely fast-moving, fragmented picture and that is the worst possible scenario for a global industry that needs global standards, predictability, and harmonization.

“I am very optimistic. The recovery will happen because the appetite for the freedom to fly is still there”

What changes did you make internally?

A lot of cost out was taken out of IATA in a very short time to ensure we were in a good position to fully support the industry going forward. That was painful but it had to be done. The industry had to preserve cash and so did IATA.

And we could not compromise on key functions, like the financial systems. We knew how vital it was to get to get money from Point A to Point B in a timely manner. There was an enormous strain on the systems during the pandemic as everybody needed money. We managed to take cost out of the financial settlement systems while 
improving their flexibility to cope with the extraordinary situation.

We also had to find the resources to invest in critical projects to support the restart. IATA Travel Pass is a good example. This will play a key role in restarting the industry.

And, of course, the biggest change is a new DG. Now is the right time for somebody fresh to ensure the recovery doesn’t falter but rather gathers speed. I am sure Willie Walsh is the right person to lead IATA and the industry going forward.

Has the crisis harmed the relationships between aviation stakeholders?

No, the coronavirus pandemic has created stronger connections between aviation stakeholders and given us a common interest. We are all in the same boat and we are fighting this together. We have the same problems and together we can find common solutions.

Has the industry done enough on the environment?

CORSIA was a key step in our successful environmental roadmap. But, of course, we must go further. Strong targets are in place and the industry is fully committed to halving net emissions by 2050 compared with 2005. But 
we must see what can be done to reinforce and accelerate that commitment.

We rely on several elements. There is not one magic bullet. So, sustainable aviation fuels, operational optimisation, efficient infrastructure, and market-based measures will all combine to achieve our targets. To go faster, we just need to be even more successful at these individual elements.

“We wanted aviation to have the freedom to connect the world, create jobs, and boost economies”

Are airlines going fast enough with digitization or will lack of revenue stifle progress?

The crisis has definitely accelerated the digitization of the passenger experience and automation in general. That can be seen most clearly in IATA Travel Pass. The App is the best way to deal with the current travel requirements in a manner that keeps passenger processing manageable. It allows airlines to answer the demand that is undoubtedly there, although governments must agree on standards for the information.

Standards make technology work. The industry understands this and understands what technology can do. It enables us to work not only more efficiently but also to keep costs down. That is why investment in digitisation will continue.

And I am convinced that IATA Travel Pass will be one of the stories about how the industry improved in the crisis. Digital identity, which is at the heart of the IATA Travel Pass, will boost OneID and the positive transformational impact that will have on the passenger experience.

2050- Strong targets are in place and the industry is fully committed to halving net emissions by 2050 compared with 2005. 

How will the future pan out for the industry?

I am very optimistic. The recovery will happen because the appetite for the freedom to fly is still there. But business travel may be delayed compared with travel that is personally motivated.

You can see that in China and in those air travel corridors that are open. Business travel is different because there are good tools for video conferencing that people are becoming used to and because company travel budgets have been slashed. Also, big events have been canceled and there are fewer business conferences. These things will take time to resolve but I am certain they will come back. It is a matter of when and not if.

I think we will see the same structure as the industry recovers. There will be low cost and network carriers addressing different segments of the market, for example. But long-haul low cost might disappear for now. And there will 
be fewer operators as some will probably go bankrupt and those that survive will operate less aircraft. It will be a smaller industry for a while, but it will grow again.

The one trend that might take longer to reappear is consolidation. That will be scarce for many years. No matter how it is done, consolidation always costs something, and nobody has any money for that type of activity. Also, many governments have injected a lot of money into their flag carriers and home airlines and this will prove a barrier. It will be difficult politically and financially to unwind the complexity of ownership. And with less flying taking place in general, the desire for consolidation won’t be quite so strong.

Will the passenger experience be different?

The new health measures will be temporary, but it will be interesting to see how it affects thinking in the industry especially once we get a clearer picture on demand. Will airlines adapt the configurations of their aircraft? How will they approach cleaning and sanitization even when the pandemic has subsided? The way meals and drinks are handled may change. There could be many new ideas in these areas.

The industry and IATA have worked hard to put the passenger front and center in all our initiatives so the passenger experience of the future will be based on what the passenger wants.

Is there anything you would have done differently?

If anything, it would be promoting open skies and open borders more strongly. A globalized, connected world creates jobs, powers economies, and unites friends and family. Aviation is a positive force. It brings enormous benefits and the current fragmentation hampers all of that.

If this pandemic has proven one thing, it is that air transport is clearly the business of freedom.