This session explored the main challenges in dealing with the growing need of travellers and shippers to be globally connected. They discussed issues included aviation liberalisation, congestion (both on the ground and in the air) and the mitigation of environmental effects.

Demand for air transport has grown rapidly over the years. Aviation liberalisation has fuelled this development by encouraging competition and enabling new airline business models to emerge, such as the low-cost carriers. Some countries have embraced aviation liberalisation as a means to connect their economy with the rest of the world. (For example, Australia’s liberal approach towards foreign ownership of airlines serving the Australian domestic market has led to foreign investment which has benefitted Australian passengers. Also on an international level it has opened access for international services from foreign areas which has stimulated connectivity and economic growth.)

The centre of gravity of air transport demand is changing. New air routes are fast developing, on the back of new trade flows, and new aviation hubs have emerged. Against this background, some countries have fully integrated aviation into their economic development policies by establishing a policy and regulatory framework which is extremely supportive of aviation growth. As a result, some existing hubs are increasingly at risk of being by-passed as providers of direct global connectivity. This has led some of their governments to reconsider their policy towards liberalisation.

ACI Europe states that these developments show that air connectivity cannot be taken for granted and that governments clearly have a role to play to support the development of connectivity. However, it was emphasised that Open Skies policies have been essential to growing air connectivity and delivering increasing benefits to the travelling public and the wider economy and should remain a top priority. In addition, congestion, both at airports and in the air needs to be addressed as airspace remains very fragmented and inefficient. Hence, airport capacity often lacks where passengers need it the most.

Different interests and priorities among the several stakeholders within the sector make it difficult to reach consensus on these issues. The International Civil Aviation Organisation (ICAO) emphasises the need for a more holistic approach and proper user consultation on national and regional initiatives. Forecasting demand is crucial for airport planning and air traffic management, yet the dynamics of airline networks generates uncertainties with regard to investments. Satellite-based navigational systems and advanced digital communications promise to increase airspace capacity, thus resulting in more efficient and environmentally friendlier operating procedures without compromising safety. Yet, these improvements come at a cost which is to be shared among the different stakeholders. Increased collaboration is needed to overcome the last-mover incentive of investing in the new technologies. The ICAO investment incentive scheme is one of the measures to facilitate this, but more collaboration between governments remains essential to increase the interoperability in air traffic control services.

Risks associated with investments in airport capacity expansion have also increased as new airline business models and short-term airline partnership have emerged which enable airlines to switch operations between airports more quickly. Airports planners can deal with this by building in modular construction and flexibility and peer into the future using a scenario approach, such as the Airports Commission of the United Kingdom has done recently.

All in all, the panelists agreed that serving the needs of the travelling public whilst maintaining the highest level of safety and protecting the environment is a challenge that requires the collaboration and coordinated action of numerous stakeholders, including airlines, airports, air navigation service providers and aviation regulators. The ongoing growth in air travel drives the need to modernise airport and air traffic control infrastructure.

Quotes:

“60% of open skies agreements do not provide any business opportunities for airlines”. Toru Hasegawa 

"Rapid air transport links are the reason why Apple and Dell have got globalised value chains”. Brian Pearce 

“We can’t ignore the people aspect of aviation"...That’s another challenge we face on the infrastructure side, the human equation”. James Billing 

“Air transport is one of the most rapidly growing sectors in the world”. Brian Pearce