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Homepage »Airlines » Interview
I Am Very Impressed
Monday August 7, 2017 01:19 MSK / Russian Aviation
On June 27, the new CEO of IATA Alexandre de Juniac had a working visit to Russia. Mr. De Juniac has held a number of working meetings with the aviation authorities of Russia and heads of airlines of Russia and the neighbouring countries. During past meetings the number of issues were discussed, some of which were announced at the press conference held on the same day, both during the welcome speech and during the Q&A session. We offer you excerpts from performances of Mr.De Juniac. De Juniac has broad aviation sector experience, including 14 years at French aerospace, space, defense, security and transportation company Thales, and its predecessor companies Thompson-CSF and Thompson SA (1995-2009). In his last position at Thales, de Juniac was responsible for the company’s operations and sales in Asia, Africa, the Middle East and Latin America. De Juniac has also held positions in the French government. His career began with the Conseil d’Etat (State Council) from 1988 to 1993.
Alexandre de Juniac
Alexandre de Juniac became the seventh person to lead the International Air Transport Association (IATA) when he took on the role of Director General and CEO from 1 September 2016. De Juniac has almost three decades of experience in both the private and public sectors. This includes senior positions in the airline and aerospace industries and the French government.
De Juniac served as Chairman and CEO of Air France-KLM (2013-2016) and prior to that as Chairman and CEO of Air France (2011-2013). Under de Juniac’s leadership Air France and Air France-KLM underwent a successful restructuring that improved efficiency and strengthened performance. He has also served on the IATA Board of Governors (2013-2016).

Subsequently, he served in the Department of Budget (1993-1995); and in the Ministry of Economy, Industry and Employment as Chief of Staff to then Minister Christine Lagarde (2009-2011). A French citizen, de Juniac was born in 1962. He is a graduate of the Ecole Polytechnique de Paris and Ecole Nationale de l’Administration. At IATA he will work from both the association’s main offices in Montreal, Canada and Geneva, Switzerland.

We are very honoured to be here in Russia.  Russia and its airlines is a very important participant of our organisation.  There is not only very strong aviation industry in Russia but it has also strong airlines with a very good service. Russia is on the second place by the number of airlines - participants of our organisation - 11, conceding only to China. Yesterday we flew with your company Aeroflot, I have to say, it was very nice. Also I would like to say that we have a very close cooperation with the Russian authorities, including in the field of aviation, with whom we have a very strong partnership. This morning we had a meeting with the Minister of Transport of Russia, where we congratulated the authorities with significant improvements, including ones in the field of aviation infrastructure.

Let me highlight a number of problems that the world aviation as a whole and aviation in Russia in particular are facing. In general, the economic situation of air carriers in the world is good. According to our forecast, in 2017, airlines around the world should receive $ 31.4 billion profit with revenue of $ 743 billion, which is approximately 5% of clean margin. For three years our profitability exceeds the capital cost what is an exception for aviation. This means that the aviation industry will bring profit to shareholders. But all these large numbers should not create unnecessary illusions. In fact, our industry is rather fragile and there is still no place for too optimistic expectations, because our industry (aviation) is particularly vulnerable to various risks and shock situations. A simple figure that illustrates my idea - our aviation industry earns only about $ 7 per passenger. Thus, there is no buffer against shock situations. Yes, we make a profit, but the situation is fragile.

In general, the situation in 2017 looks positive, both for passenger transportation and for cargo transportation. So to speak about Russia, for the first 4 months of 2017 the growth of passenger traffic was 12.4%. We see this growth in passenger traffic, both on international and domestic routes, which is good news for everyone: for the country as a whole, for passengers, for air carriers, for tourists, for businessmen.

The first important topic I would like to talk about is the safety of flights. Our industry is very safe, we are trusted both by passengers and freighters. The world aviation carries 4 billion passengers a year. From the view of safety, in Russia the situation in this area is very good. Over the past 3 years there have been no air crashes, aviation accidents involving death of people (note: on long-range aircrafts). Of course, such an improvement occurred, and thanks to the efforts of the authorities, and thanks to the efforts of carriers: some measures were taken to strengthen flight safety and to update the fleet of aircraft. Our organisation IATA also played an important role, because we establish processes and procedures to improve the situation in this area, including our IOSA (operational safety audit) system. By the way, 12 Russian carriers are participants of this program. Here I have to say once again that this is an area where we are very cautious every day.

Of course, there are areas that can be improved. In addition to air crashes, there are also incidents without a tragic outcome. In 2016 in Russia, according to statistics, there was one accident on 400 thousand flights, and on average, there is one aircraft accident for 620 thousand flights, meaning there is a gap that we are trying to reduce, thanks to the joint efforts of our organisation and our partners in Russia.

Now I will mention 3 more topics, which are also important. First of all, I want to say here that it is very important for world aviation that international standards are established and that they are properly observed. When the aircraft makes flights, there is a departure point and a landing point, and these points can be the most diverse cities in the world: Moscow, Singapore, Paris, Tokyo .... Everywhere the aircraft must be able to fly safely. Therefore, we constantly think about how to actualise and implement these global standards around the world and how to help Russia implement them as well. This is what we care about, and what we are working on with the Russian authorities.

So, now I want to address today those three areas where the solution of legislative issues is especially important. The first is a very positive example of Russia ratifying the Montreal Convention of 1999, and soon, in August of this year, it is expected to enter into legal force. This Convention is devoted to the globalisation of the law related to obligations, and also electronic data interchange. This is a very positive news. The Ministry of Transport, the State Duma, the President's staff, everyone made their efforts to ensure that this document was aproved. Congratulations!

The next important document to which we would recommend joining the Russian Federation is the Montreal Protocol No.14. It is related to how to deal with passengers who allow hooligan actions on board of the aircraft. This is indeed a very difficult and big problem. It is important to globalise the efforts of companies in this area. This applies not only to the Civil Code, but also to the Criminal Code of the countries. As far as we know, President Putin has tightened the measures that can be taken against such passengers in Russia, but we would also welcome the signing of the Montreal Protocol as an additional measure that will be especially useful outside of Russia. For example, when passengers are transported from Russia to Europe, so that such passengers can apply the measures on some legal basis and outside of Russia. Here we believe that the Montreal Protocol is a useful tool.

The third important document that we consider necessary to mention is the system of compensation for the reduction of harmful emissions into the atmosphere of the International Civil Aviation Organisation, abbreviated CORSIA. First of all, this system is aimed at reducing CO2. Here I must say that aviation has become the first industry to take on such high ambitious commitments to reduce CO2 emissions. Here we also say that by 2050 we have committed ourselves to reduce emissions of harmful substances by half, which is a very ambitious goal, over which all participants of our industry, aircraft manufacturers, airports and airlines are going to work. And here the CORSIA system will become a very important market tool that will help fulfil these tasks. Starting in 2020, it will operate on a voluntary basis, and by 2026 it will become mandatory. Airlines will be able to buy these environmental "credits" to compensate their emissions.

 Within the framework of ICAO, this system was adopted in October 2016. It was joined by 190 countries. Here I can only express my regret that Russia is not one of these countries. I must say that Russia's acceptance of this system would be in the interests of all parties, because otherwise we will have a patchwork of various taxes, administrative and other laws, legal acts, regulatory measures that will be very expensive, inefficient and too complicated. In return, CORSIA is offered as a truly unique international agreement that will help all countries, including Russia, to make a difference for the better in the climate change situation.

Further, in the course of Q&A session, Alexandre de Juniac in particular said:

-     As for passenger traffic in Russia, like I said, for the first 4 months of 2017 the growth was 12.4%, which is higher than the average in the world. As for the profit forecasts, we do not have a separate forecast for Russia, but there is a forecast for Europe. It equals to $7.4 billion. I must say that, half of all profits come from North America, followed by Europe, followed by Asia, Africa and the Middle East.

- When an unpleasant event occurs with a passenger, for example, loss of baggage, delays, compensations are necessary, but a harmonised international system is needed. And here we stand for a fair balance between the rights of passengers and the rights of airlines. Because if there is a variety of national rules and laws, it can become just an unbearable, too heavy burden for the airline, can affect the ticket prices. From our point of view, the Montreal Convention is a very good compromise, which establishes certain global limitations - limits of responsibility. I must say that, most likely, they are close to the fact that Russian airlines already pay passengers according to Russian laws. Here I also want to add that the problem of the passenger is also the airline's problem too. If there is a delay of the flight, then this is a big problem for both the passenger and the airline, for example, if the aircraft is stuck in one of the airports for some reason. Therefore, here we advocate that there is a balanced approach and balanced legislation.

- As for passengers admitting hooligan actions on board, the main question here is which legislation to apply in each specific situation. Let's say that we have a citizen of one country who flies by the airline of the second country and arrives at the airport of the third country. Here it is necessary to decide which legislation to use. The present confusion leads to the fact that often such passengers remain unpunished. So the Protocol No.14 is related to the establishment of general rules, which legislation and in what cases to apply.

- I must say that our priority is flight safety and that pilots have the necessary skills to manage specific types of aircrafts. Here, at the level of national governments and aviation authorities, the most important legislative measures are being taken to make the system of relations between the airline and pilots more strict. First of all, for us safety of flights is important. Perhaps you have already seen this statistics of one of the aircraft manufacturers. In the next 20 years, the world will need more than 617 thousand new pilots. Moreover, 40% of these needs are in the Asia-Pacific region, 18% in Europe, 4% in Russia.