Vision 2050

But what is the reality? How does the world’s most competitive and least profitable industry achieve these lofty goals when massive consolidation and unheard of profits will be required? After all, this vision comes at the end of a decade when the industry has lost a cumulative US$47 billion.

But Bisignani called on industry leaders to look beyond the crisis that buffeted the air transport industry over the last decade and to strategically define a sustainable future. “It is time to think big and to look beyond the cycles and shocks. Our duty is to work together to define a vision on which to build a sustainable future. ” Bisignani assured delegates that there were blue skies ahead.

“In just over a decade, I can see $100 billion in industry profits on revenues of $1 trillion. As we move towards 2050, this 10 per cent margin will become even more robust. This is not just a crazy dream. Before the recession, at least a dozen IATA members already had 10 per cent margins. We must make this a much broader reality. Change in all areas is possible. This vision – including sustainable profitability – can be our future,” predicted Bisignani.

Bisignani’s vision for 2050 rests on four cornerstones of change.

The first is profitability. Bisignani claimed that “efficiency gains never make it to the bottom line because airlines are deprived of the commercial freedom to operate their businesses like a normal business. ” “Our poor profitability makes every shock a fight for survival,” he added.

To blame is the industry’s hyper fragmentation with 1061 airlines as a result of the bilateral system which regulates the global aviation industry, Bisignani said.

“The restrictions on international capital prevent consolidation across borders. These restrictions of the bilateral system are a dam that holds us back. It is time for that dam to burst. ” Bisignani called on governments to act responsibly to ensure safety, security, and a level playing field. “Airlines need the freedom to build efficiencies across borders, better serve their customers, and achieve sustainable profits to fund growth and innovation,” he added.

However, it will be a tough sell to governments, many of whom correctly view their national airlines as critical infrastructure assets not to be traded away or controlled from another country.

The second pillar of the vision is infrastructure, with IATA calling for infrastructure to be reshaped around the needs of airlines – the core of the industry’s value chain.

In a radical departure Bisignani wants airports to pay airlines to bring passengers as shoppers to the ever expanding shopping complexes that masquerade as airports.

“Airports should compete for airline business based on efficiency. Commercial revenues will drive their business,” he said.

Bisignani focused on air traffic management, calling for major change. “I can see 10 global air navigation service providers (ANSPs) replacing the current 180 at half the cost. ” The Single European Sky (SES) would be the first of the 10 global ANSPs. However, he acknowledged that the SES reality requires real leadership. “What we have today in Europe is an uncoordinated bureaucratic mess,” Bisignani said. He pleaded for a date to achieve the US$6. 5 billion cost savings that the SES promises. “After 20 years of waiting, we are fed up. Heads of governments must set a date and deliver. ” One of the biggest challenges is fuel for the industry, suggests Bisignani. “Today’s jet fuel cannot sustain air transport in the long term. We must find a sustainable alternative and our most promising opportunity is biofuels, which have the potential to reduce our carbon footprint by up to 80 per cent. ” Bisignani urged greater support from governments. “Too often governments are only committed to environment when it means grabbing cash. Governments should be investing in biofuels and green technologies.

Local production with jatropha, camelina, algae, or even urban waste will open up economic opportunities in virtually any location. Not only will this secure a future power source for our industry, this will also break the tyranny of oil and drive economic development in all parts of the world,” he told delegates.

Still, widely differing views were expressed at the AGM on the market penetration of biofuels over the next 40 years.

In the bullish corner was IATA’s director aviation environment Paul Steele who said according to a report from E4tech for the UK government in a worst case scenario biofuels would account for 40 per cent of fuel usage by 2050. “In a best case we could have full replacement by 2035,” Steele told Australian Aviation.

“We have reduced the price of flying by 40 per cent since 1980. But as we made travel more accessible, speed and quality suffered. ”

But casting a sobering note on those numbers at the IATA executive briefing session on Climate Change Leadership was John Plaza, CEO and founder of US based Imperium Renewables, who warned that unless governments put a value on carbon it may not work. “We need government mandates and a carbon value for biofuels for airlines to work,” he said. Plaza noted that the “US Navy was emerging as a better partner” right now because of its mandated aims to remove dependence on fossil fuels.

Plaza also warned that oil companies were well entrenched with heavy subsidies and were “very potent competitors. ” He added from a US perspective that a mindset change was also required to force legislators to act.

“Carbon needs to be priced and governed in the US. We also need to ask how much we in the US care about climate change. Until US citizens recognise the problem and are willing to pay, we have an issue,” he said.

Currently, the lower cost of traditional jet fuel was an issue, but Plaza maintained that jet fuel would go up in price, while the production of biofuels would decline.

“Right now [with oil at US$70 a barrel] we can’t compete,” Plaza said.

IATA’s chief economist Brian Pearce told Australian Aviation that studies had shown that the tipping point for biofuels now was oil at US$100 a barrel.

Production cost problems and the attitude of governments notwithstanding, Steel said progress “had been extraordinary. ” “In just three years we have had test flights and certification will be completed by the end of the first quarter next year,” Steel said. “There has been extraordinary industry cooperation. ” “We are forecasting biofuels will be in regular commercial use in three to five years,” Steele said.

Getting away from biofuels, Steele said that the airline industry had made spectacular progress since 1990 with 3. 3 billion tonnes of CO2 saved through the use of new technology, air traffic control improvements and other efficiencies.

Going forward the challenge is significant, warned Steele. If the industry does nothing, CO2 output will double by 2050 whereas the goal is to halve output.

Steele noted that about 40 per cent of the turnaround would be gained from known technologies, operations and infrastructure, and the balance would have to come from biofuels and new technology.

And new technology is the focus for another of Bisignani’s visions “that passengers would become the industry’s greatest supporters to help change governments’ over-regulated and underappreciated attitude. ” “The customer is at the centre of our future vision. By 2050, we will have 16 billion travellers and handle 400 million tonnes of cargo. In just a couple of decades, we will see the middle class nearly triple from the 1. 3 billion today to 3. 5 billion people – a quarter of which will be in India and China. Accommodating that growth efficiently will be a challenge for all parts of the value chain – airports, air navigation service providers, manufacturers and governments. The solution must be strategic and aligned,” said Bisignani.

Bisignani noted that the air transport industry must engage its 2. 4 billion passengers to change government attitudes.

“To turn our customers into industry activists, we must improve the value proposition of price, speed, and quality.

We have reduced the price of flying by 40 per cent since 1980. But as we made travel more accessible, speed and quality suffered.

The infrastructure has not kept pace, resulting in delays both in the air and on the ground. New security procedures created new hassles. Our challenge is to gain the support of customers in demanding change from the governments. ” Bisignani conceded that the questions about the industry’s future are endless.

“And we will not find the answers in isolation. ” A significant part of achieving the Vision 2050 will be a new generation of aircraft and the industry has been given a glimpse of what to expect from recent submission in response to an 18 month NASA research effort to visualise the passenger aircraft of the future.

However, instead of exotic new space aged designs borrowed from science fiction, relatively familiar shapes dominate advanced concept studies which four industry teams completed for NASA’s Fundamental Aeronautics Program in April 2010.

Looking more closely there are some subtle differences, says NASA, with new airframe and propulsion technologies such as shape memory alloys, ceramic or fibre composites, carbon nanotube or fibre optic cabling, self-healing skin, hybrid electric engines, folding wings, double fuselages and virtual reality windows.

According to Richard Wahls, project scientist for the Fundamental Aeronautics Program’s Subsonic Fixed Wing Project at NASA’s Langley Research Center in Hampton, Virginia, “standing next to the airplane, you may not be able to tell the difference, but the improvements will be revolutionary. Technological beauty is more than skin deep. ” NASA asked industry and academia in October 2008 to develop advanced concepts for aircraft that can satisfy anticipated commercial air transportation needs while meeting specific energy efficiency, environmental and operational goals in 2030 and beyond. NASA’s goals for a 2030 era aircraft, compared with an aircraft entering service today, were: • A 71 decibel reduction below current FAA noise standards, which aim to contain objectionable noise within airport boundaries.

• A greater than 75 per cent reduction on the ICAO’s CAEP/6, standard for nitrogen oxide emissions.

• A greater than 70 per cent reduction in fuel burn.

The teams were led by General Electric, Massachusetts Institute of Technology, Northrop Grumman and Boeing.

According to NASA there were some common themes from the four reports as under: • Slower cruising – at about Mach 0. 7 and at higher altitudes, to save fuel.

• Engines that require less power on takeoff, for quieter flight.

• Shorter runways – about 1500m long, on average – to increase operating capacity and efficiency.

• Smaller aircraft – in the medium-size class of a Boeing 737, with cabin accommodation for no more than 180 passengers – flying shorter and more direct routes, for cost-efficiency.

• Reliance on promised advancements in air traffic management such as the use of automated decision making tools for merging and spacing en route and during departure climbs and arrival descents.

• The teams recommended a variety of improvements in lightweight composite structures, heat and stress tolerant engine materials, and aerodynamic modelling that can help bring their ideas to reality.

NASA is weighing the recommendations against its broad objective of developing aeronautics technologies that can be applied to a broad range of aircraft and operating scenarios for the greatest public benefit.

Jaiwon Shin, associate administrator for aeronautics research at NASA in Washington DC, said that the “input from our customers has provided us with well thought-out scenarios for our vision of the future, and it will help us place our research investment decisions squarely in the mainstream. ” “Identifying those necessary technologies will help us establish a research roadmap to follow in bringing these innovations to life during the coming years,” said Shin.

Boeing’s submission included a range of aircraft with the baseline aircraft dubbed N-sugar free (sugar for ‘Subsonic Ultra Green Aircraft Research’) a 154 passenger mixed class 737 look-a-like.

The same aircraft incorporating a host of new technologies named N+3 ‘Refined Sugar’ promises a 50 per cent reduction in fuel burn.

The baseline aircraft has a TOGW (takeoff gross weight) of 79,450kg made up of OEW (operating empty weight) of 54 per cent, fuel 26 per cent and payload 20 per cent.

The N+3 Refined Sugar aircraft made from composites offers a significant weight reduction to a TOGW of 61,750kg with OEW making up 56 per cent, fuel 17 per cent and payload 26 per cent.

The Refined Sugar aircraft would have a 47. 7 per cent reduction in fuel burn over the baseline aircraft, but would not be ready till 2030.

Two other designs – Sugar High and Sugar Volt (see title pic) are built around a high wing solution and a mix of battery and conventional fuel power promising between 38 per cent and 63 per cent reductions in fuel burn per seat over the baseline.

Sugar Ray – a blended wing body – is also in Boeing’s solution to NASA’s goals, with a 43. 3 per cent reduction in block fuel per seat and 37db quieter than the baseline aircraft.

The next step for NASA will be to award one or two research contracts for work starting in 2011.

Later this year, Bisignani will call leaders from airlines, industry partners, stakeholders, governments, and customers to meet in Singapore to develop an open, robust, and comprehensive process with results to be reported at the 2011 AGM.

It is a bright looking future if these aims can be realised.