Listen in as IATA's Senior Vice President for Operations, Safety and Security Nick Careen outlines aviation's top operational, safety and security challenges that could lie ahead in the new year.
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Transcript
Karen Walker:
Hello everyone and welcome to Window Seat at Aviation Week Air Transport Podcast. I'm ATW and Aviation Week Network Air Transport editor-in-chief, Karen Walker, and I am delighted to welcome you on board.
And this week I am really happy, because I've been joined by someone that I have been hoping would join me on Window Seat for a long time. He's one of my favorite and most experienced industry experts in the business. I'm talking about Nick Careen, the senior vice president of operations, safety and security at the International Air Transport Association, or IATA.
IATA, of course, is the trade association for the world's airlines representing some 340 airlines that provide over 80% of global air traffic. Nick, welcome. We're actually in Geneva right now and I'm delighted to be talking with you. Nick joined IATA in 2015 before which he held executive positions at Air Canada and Jazz.
And as I said, we're in Geneva, IATA's headquarters office. Nick's been one of the people here doing some briefings on all things related to airline and airport operations. So, I'm going to pick Nick's brain a little on what were the key things in terms of operations for 2024 and what that might potentially mean as we head into 2025.
Nick, I'd like to start with safety. On the whole, 2024 has been another actually good year for the airline industry, which, of course, has been improving on its safety record, year after year.
Give us some key points here and where there may still be concerns. I'm thinking particularly on things like incidents on the ground, aircraft getting damaged by equipment and that sort of thing, and then air traffic management situations. We have seen some close incidents and so give me the overview there of the key things.
Nick Careen:
No problem. It's a pleasure, Karen. And if you're here to pick my brain, this will be your shortest podcast ever. But, I think, you're right. Safety, I've been asked this a few times today already, and safety is always the number one priority in our business, and it's no surprise that we're continuing to see an improvement, but we never rest on our laurels in this business.
There's always challenges, and you hit on a couple of them. When we talk about ground damage, it's always an area that—it sticks out. It's costly, especially now when aircraft availability is tight because of some of the challenges, and I'm sure we'll get to that in a second. So, it actually becomes more and more evident that this is something that we need to do more on.
The biggest area of focus, for us anyway, as an industry with the ground service providers and the airlines and the airports for that matter, is on investment in what we call enhanced ground servicing equipment. Which essentially, for the simplest references, like all the bells and whistles you have on your car today, we would like to have it on our ground services equipment as well.
And without getting into too much detail in terms of what we're trying to do here, we do have a certification program that we have been implementing that we will continue to implement, and we'll grow into 2025.
We'll probably have close to 300 applicants in terms of being able to see where they are in the process of implementing this type of equipment that has the standard stuff that you would expect to see—the sensors and the speed controls and the data provided to the operators in terms of where it is and who's using it and if it's being used correctly and all that stuff, which we currently don't have widely implemented at this point in time.
Karen Walker:
Right, so, if I'm understanding this correctly, it's stuff like those stairs that are used sometimes that go up to the aircraft or the bridges. It's things that are on and around the ramp area. But if it was a car and it got close to—a modern car got close to something it shouldn't you get a beep, beep beep. It comes down to the fact that they don't have that sort of thing going on right now, yes?
Nick Careen:
It depends on the airport, the airline, the ground service provider, the type of equipment they're using. It can come down to the age of the piece of equipment, whether or not they've decided to retrofit it or not, but yes it does, it is as simple as that.
Some of these things are old, the pieces of equipment, they just don't have that technology. And even worse if it's a diesel, sometimes the jumping and the very difficult to control speed, and approach to the aircraft and that's a challenge. So, investing into the future and having these bells and whistles are going to make a difference in the long run.
Karen Walker:
And then what about air traffic control, air traffic management and some of the close to airports incidents that we've been seeing? What's your take on where we've got to so far this year on that and what needs to be looked at next year?
Nick Careen:
My first instinct is that near-misses—so when you look at in this business, we've spent an inordinate amount of time learning from when things actually did go bump in the night.
The fact that we're at a point in this industry where we're looking at things that could have gone bump in the night is a true testament to where we are as a safety-driven operation or safety-driven organizations around the world in terms of our airports, the ground service providers, the airlines, et cetera. So, I think that's good air traffic management as well.
We started the year off a little rough, which I think all the air traffic management systems around the world took notice of that. There were some challenges. There are some challenges that remain to be challenges in terms of staffing levels in certain parts of the world and technology that's being used that obviously needs to be invested in. But we're confident that that's happening.
Is it happening at the pace we would like? Perhaps not, but that's just the nature of our business. But we are safe, and we do know that just like airlines, air traffic management takes safety as their number one priority as well. And so, they will learn from any incident or potential near-miss and be able to put procedures in place to make sure that it doesn't happen again.
I think that's the real benefit. And when we look back at 2024, that's what we should be taking away from it is that we learn from these things, and we've made and implemented changes to avoid them in the future. Whether that's in the length of shifts, whether that's in how many shifts we do in a row, or whether that is the technology that's being used to oversee the air traffic management area.
So, I think, we could talk the rest of the day about whether or not they're as efficient as they need to be in terms of managing airspace and what that means for the future, but that's not safety related. And in terms of safety, we share the same brain.
Karen Walker:
Yeah, two aspects to that actually, it's quite important with all the sustainability issues is that congestion—air traffic management congestion—leads to more CO2 in the air and more fuel being used that doesn't need to. But as you say, that's one issue important, but this issue is safety and as you say, the industry really gets on top of that very seriously.
Nick Careen:
Absolutely. That's the number one priority.
Karen Walker:
So, you mentioned something just at the beginning of this that I want to then pick up, which is the supply chain. Huge issue for airlines of the last two or three years really. It doesn't look like things are getting much better at the moment. It's affecting deliveries of new engines, deliveries of new aircraft and cabins and equipment, and it's also affecting spare parts, and therefore it's having an impact on airlines and their planning for growth.
They're saying we're going to go into this city and that city and add this frequency, and then they find they don't have the new aircraft or they're holding on to less-efficient aircraft. Can you just touch a little bit first on that and then I want to maybe talk a little bit in terms of the maintenance, the MRO side?
Nick Careen:
It is a lingering effect of COVID, whether that's part supply, whether that's raw material challenges that still exist, some of which is a result of geopolitical challenges that are out of everybody's control.
And so, it's one of those things that if you were to put your finger on one of the biggest challenges that the industry's facing right now, that's there. It's there for all the reasons you mentioned.
Why? I guess we could look at the OEMs, the aircraft manufacturers themselves in terms of not being able to properly forecast, which does have an impact on the airline's ability to capture growth and to plan for the future.
You're seeing examples where airlines are actually taking some of their old aircraft out of the desert and refitting them because they know that they're just not going to have the airplanes that they had planned in the future and that comes at a huge cost.
And so, it's something that we don't take lightly, and it's something that we continue to work with industry, whether that's the aircraft manufacturers, but more importantly now it's the avionics manufacturers as well as the engine manufacturers because it's a call shared by all of us at the moment.
Not necessarily, you can't point the finger at one particular area, but transparency is the name of the game, and we need to see greater transparency in that.
Karen Walker:
Willie Walsh, the IATA director general, of course, spoke earlier this morning about huge frustration with this issue by the airline members.
You picked up on the MRO side, which I think is an interesting part that's not necessarily getting the media attention, at least in general. We know that aircraft are being delayed, new aircraft, but what you're saying is that there is a delay now in terms of being able to get the maintenance done, yes?
Nick Careen:
It's part availability, part transparency. One of the things that has become really obvious in all of this stuff is that, and I think I mentioned it earlier, we've talked about supply chains forever from a maintenance perspective. I've been lucky enough to work in a maintenance department, and you see where just in time becomes so important.
It's efficient and it costs less, and so it just makes good sense. And everybody talked about (Japanese business philosophy) Kaizen and whatever lean manufacturing process, GE was professing it, and here we are now in a position where people are hoarding parts.
You do that because you have to protect your operation and it's natural to think that way, but that's just not the right way to approach this in the long run. And so, we have a product at IATA called MRO Smart Hub, and we have a significant number of members on there, over 2,000, and we have, I think, there's 450 companies that participate in that.
But that's not the only one, but it is an example of a program out there that actually allows for greater visibility on what's available that currently some people may not have access to. And so, we need to see more of that. We need to see better forecasting to allow for airlines to be able to not be sitting on this stuff.
And then this supply chain issue will sort itself out, it will. And then what do you do? You're going to have a bunch of, and I've been there where you're now getting rid of things that 10 cents on the dollar because you sat on it for too long.
So, I'm not saying that that's every airline’s case, but I think it is a strong case that we should be using platforms to be able to share this information and then taking that perhaps to even other things beyond just normal rotables and parts and looking at engines potentially as well.
Karen Walker:
Talking of IATA programs, new programs this year, something, I hope I'm getting this correct, FuelS. Is that-
Nick Careen:
FuelIS, yeah.
Karen Walker:
FuelIS, thank you. FuelIS, which is an interesting program about helping airlines understand where they stand relative to their peers in terms of fuel efficiency. Tell me a little bit about that, please.
Nick Careen:
So, we use our GADM Program. So, our GADM Program is our Global Aviation Data Management Program and within it, it has an incident database, that has a FDX flight database, which is being populated by, I think, now it's 9,000 aircraft, they're sending data to that. So, it's about almost 30% of the global flights at the moment and growing pretty rapidly.
We have the accident database, we have the maintenance cost database. And the flight database, we have the opportunity to be able to provide airlines with the ability to benchmark themselves against a group of peers.
They have to use a rule of three so we don't get into a situation where an airline can compare themselves to and know exactly what airline they're comparing themselves to, which is not something that we would promote.
So, if you do a fuel efficiency program within your airline today, you're going to go in or you're going to be able to look at whether or not, based on documentation, are we doing the right things? Are we doing engine watches enough? Our aircraft flight, do we have a program to keep them keep weight off, et cetera? What's our flight planning system? Are we trying to meet our blocks at 90% or 60% tiles and all those things that every airline does. But what this thing does it also allows you to be able to look at every phase of flight and compare yourself to a group of peers.
Perhaps there are areas that someone or some others are doing better so that it gives you some areas to focus on in terms of becoming more fuel efficient. And let's say no, we use sustainability as a good reason for that, but it is either the number-one or number-two costs for the airline, so there's an added incentive to make sure that they're managing their fuel.
Karen Walker:
Absolutely. And maybe related to the surging and still very strong post-COVID demand for air travel. We are seeing very high load factors and people want to fly, and the airlines are certainly trying to do their best to deliver, despite all these problems.
But one sticking area, and I know this is something that IATA is doing regular surveys on, and you are really monitoring that is baggage handling—or more to the point when the bag doesn't turn up or it didn't turn up where it was supposed to.
There's some concern there, even though that's a really important issue for people, especially if they're flying internationally, they want their bag to go with them. Can you just tell me a little bit about what you saw this year again and priorities for what can be done about issues in '25?
Nick Careen:
Bags are always an interesting topic. There's a good section of the population who'd probably check their bag if they had more confidence in the system and there's good reason for that. But the industry has improved dramatically on this.
During COVID, a lot of stories came out and there's all kinds of reasons for that. It's not all airline related. Some of its airports, some of its staffing, some of it is just simply volume.
The operational performance, the airlines was impacted dramatically and is a heavy connection flow within our business because we're interchangeable, interoperable. So, it really pointed the finger that, hey, put the spotlight on it again, so to speak. But the fact is that there is still an opportunity to improve baggage and our customers, when we do our global passenger survey every year, it's always in the top three. It's always there. It's a pain point, and customers expect to get their bags when they're traveling.
And people aren't traveling, they're traveling for a vacation, they're traveling for weddings, they're traveling for unfortunately funerals. They're traveling for occasions and so if their baggage is not there, then it has a dramatic impact on that particular service offering. So, it's incumbent on us to find ways to get better.
Now we've identified three obvious areas that we believe that we could tackle a little bit more robustly. Modern baggage messaging is a big part of that now. It's a dry subject for most people, but it really is. Right now, messaging is used over type B. It's antiquated, it's been around for 50 years. Those teletype messages, anyone that's been around an airport, that's what's driving this. Very limited on characters, very limited on what you can share. It's really hampering the ability for airlines to recover, and recovery is what customers are looking for.
The expectation of a customer, 32% in our last survey expected the airline will recover in 12 hours. Well, if you're flying internationally, good luck with that.
So, we obviously need to find a better way and we believe that by adopting XML, eventually JSON, and even being able to ingest [Apple] Air Pod information into a system that allow the airlines to interrogate it and provide better outcomes in terms of being able to reunite you with your bag, it's an obvious area.
And so, we are doing trials this year and we will do more next year. Airline interest, we didn't dream this up; the airlines are interested in it. Of course there's a cost-attached to transition. So, we're going to gradually help with that and build a business case and build a new modern baggage system that allows for airlines to be able to utilize it. That's probably the biggest one.
I mean, the other one that comes up is electronic bag tags, and we believe that that's got a huge potential as well in the long run, primarily because, I think I mentioned that earlier today as well,
if you look at regular operations, airlines really lose bags or mishandle bags it's primarily because of a volume issue where you've got flights diverting everywhere and all of a sudden you've got a thousand bags on the floor and you got individual bag tags on every one of them.
In order to be able to reflight that bag and put it in the right place, whether it is to go back home or to wherever destination, an alternate destination, every one of those things need to be scanned. If you have an electronic bag tag that could be done in one fell swoop, it can be adjusted into the airport system and away it goes.
So that's another obvious area that airlines have expressed interest in us be being able to rekindle it. It's been around for a long time, but there seems to be a growing amount of interest now.
Karen Walker:
So, it seems to me if there's one recurring theme here, the airlines are still facing very tough issues and challenges. Just making money is still very hard in this industry, but they are keen for these solutions.
And it does seem to me that what often comes up now is technology, new technology and digitalization, which is also about what future generations—young people, they want it, they demand it, correct? So, this work is being done.
And yet what we're also seeing is governments still wanting to regulate and insist on airlines, what they do with bags and how they handle things like ancillary fees and all that. We've recently just seen moves in the US that very much seemed to mirror what was introduced by the European Union. Can you just give me a comment on that side of things?
Nick Careen:
No problem. Airlines fly airplanes; governments regulate—and they love doing it. And this industry is probably one of the most over-regulated industries in the world. Some of it for good reason, some of it for not-so-good reasons.
The other thing is that they layer regulations on top of regulations, so there's never a desire to take a look and say, do these make sense anymore? Should these actually be renewed or removed? That does not happen. There's not one politician in the world who’ll put their name on removing something. They're happy to put their name on adding something and that's an example in the US.
Pointing the finger at an airline or the industry itself is a populist move. We've seen it in Europe under EU 261. We're seeing it in the US, which we hope with the new administration we see that perhaps diminish a little. We're seeing it in Canada as well, because it's an easy diversionary tactic.
It solves nothing. It drives up costs. And in the end, the only one who ends up losing, and this is the consumer, which was the whole reason for doing it in the first place. There's better ways to approach this.
If you use the US as an example: the US government are responsible for enough areas that they need to fix that if they were to actually put their attention to that, we would see less impact to the industry and ATM was one of them. So, I think, they're populist moves that do not serve anyone's benefit other than to get re-elected.
Karen Walker:
Yeah, absolutely. It's the headline grabbing the thing for ... I'd just like to just ask you one last thing, Nick. Another year over, or almost over, and this industry never ceases to amaze me in terms of the challenges it does deal with and overcome.
IATA reported today that it expects the industry overall to be profitable this year and again next year, [a] slight improvement next year. The big thing that I noticed is that what we're looking at this year and next year is that all regions will be profitable as a collective. It's not a case of where some regions will still be in the red.
When you think how soon that is after COVID, that's quite remarkable. What do you personally feel? Do you feel optimistic going into '25?
Nick Careen:
Absolutely. Still here. And you know what? Even just the simple fact of having this discussion with you resonates with me. Because it always reminds me, if I was to be asked this question 30 years ago that I would be sitting in Geneva having a conversation about the aviation industry and how I felt about it, I'd laugh my head off. So, it's a privilege to be here.
But yeah, the resilience of this industry is perhaps what gets in everybody's blood. Nobody can ever put a finger on it to say, "Oh, once you get into aviation, you can't get out of it." It's true. It is so dynamic. It is so resilient. There's always problems. My grandfather would say, "You'll never work yourself out of a job around air," and that's true. But we fix them, we move on, and we continue to look to innovate.
I think the digital transformation that the whole planet is undergoing, never mind just our industry, is very exciting because the impact of that is going to change, have an exponential change on how we do things.
It's going to actually happen faster than we have seen over the last perhaps 25, 30 years. So that is very exciting, looking forward and the growth. And the fact that we're back to profitability obviously allows for investment, the necessary investment that is elusive and why some of the low-hanging fruit, so to speak, we haven't been able to get to.
Karen Walker:
Excellent. Nick, great to talk with you and thank you. Nice to have that optimistic feel at the end of this year. So, thank you again, Nick. And also thank you to our producers, Cory Hitt and Guy Ferneyhough. And, of course, a huge thank you to our listeners. This is Karen Walker disembarking from Window Seat.
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