The World According to Walsh

IATA Director General Willie Walsh is a rare, refreshing association executive who is unabashedly outspoken, reinforced by a remarkable grasp – without consulting notes or teleprompter – of facts and figures on a range of topics. He does not default to canned, corporatespeak talking points, nor does he dodge controversial subjects.

Walsh has been at the helm of the International Air Transport Association, which represents 340 passenger and cargo airlines who carry 80% of the world’s air traffic, since April 2021… in the middle of the Covid pandemic… after serving as chief executive of International Airlines Group (IAG) and before that British Airways and Aer Lingus. The self-assured Irishman began his career as a pilot cadet at age 17.

The DG’s term was originally to expire after five years but has been extended to 2027.

Last week, Walsh again held court for more than 100 aviation and business journalists from around the world for IATA’s annual Global Media Day. As a Geneva, Switzerland resident, it’s an easy commute for me across Lac Léman to IATA HQ, and one of my favorite events of the year.

A few highlights of Walsh’s remarks during the Q&A session:

Pilot Shortage

“When we look at this in aggregate, over the longer term, we don't see a supply issue for pilots. I think the particular challenge in the US was as a result of regulations that were unique to the US; most other areas are not expressing any concerns about their ability to recruit pilots,” Walsh summarized.

I asked him, “Do you see the US changing the 1500-hour pilot rule in our lifetime?”

“No, I don't think there's any evidence that will happen,” he responded. “I think if it were to have been addressed, we would have seen it already. But there doesn't appear to be any political appetite to address that issue. And it's politics, you know. I don't see it as a safety issue. To give weight to the quantity of hours rather than the quality of hours, it doesn't make sense to me... but I don't see a change.”

Walsh also addressed a question on the single pilot issue. “I don't see it happening. I see no demand for it from the industry. I think it makes an interesting story, but I don't think it's going to happen. And to my mind, you will remain with a multi-crew operation or you'll go to autonomous flights. I don't see the logic in going from multi-crew to single pilot to autonomous.”

Technical Skills Shortage

Mohammad Taher, aka ‘The Airport Guy,’ who has become a social media sensation for his aviation recruiting videos, commented that the average age of fleet aircraft is going up (now a record 14.8 years)... “that means more maintenance, that means more time in shops; we're looking at a lot of people about to retire over the next 10 to 15 years. What would happen to our industry if we don't attract the technical talent that's going to be able to uphold the trajectory?”

Walsh replied: “It is the concern that the industry faces. I look to India for both the question and the answer. India doesn't have a supply issue when it comes to pilots. India has the highest proportion of female pilots in the world. India recognizes the opportunity in terms of investment in maintenance, repair and overhaul facilities, and they're now looking to train their people because they see the opportunity to create good, well-paid jobs in an industry that is going to require talent going forward.

“I think we've got a problem in Europe, particularly recruiting and retaining skills like mechanics and engineers. I think the experience of the pandemic has added to that challenge because the hybrid working environment, which has become very attractive to people, clearly is not an option if you're having to go to the hangar to do your work. You can't work from home. It is probably one of the biggest challenges that the industry will face as we go forward.

He continued: “The message is, you know, this is a fantastic industry. It's an exciting industry, and we're seeing some evidence in certain parts of the world where people with those sorts of skills left, went to pharmaceutical, went to IT. Jobs during the pandemic are now returning to the industry. And we're hearing that they found pharmaceuticals and IT quite boring compared to the excitement of the airline industry.

“I love the industry. I've found it fascinating, challenging and rewarding. And that's the message we need to get across, that this is a great industry to be part of. If you have the skills to be a mechanic or an engineer, your job security is 100% because those talents, those skills, are going to be required for this industry for many, many years to come.

“We have to then address the gender issue and get more women attracted into positions... technical positions like mechanics, engineers, pilots... than we have traditionally succeeded in doing.

“How do we speak to the young people around the globe? We can speak to them as an industry that is absolutely essential in terms of driving economic development everywhere on every continent; that's already inspiring. On top of it, we can say that you will come into an industry that is really committed to changing its energy source... you can be an active part of how we can decarbonize this industry.

Aircraft & Engine ‘Monopolies’

Reuters European Airlines Correspondent Joanna Plucinska asked, “What can realistically be done to speed up the waiting period for airlines when it comes to engines and planes?”

Walsh: “There's very little that we can do at this stage. What we need to do is to pile the pressure on to the manufacturers to resolve these issues. We've been patient. We've given them time. I think our patience has run out. The situation is unacceptable. We're not seeing sufficient effort being put into addressing this issue. It's now got to the stage where airlines are being forced to retain aircraft that they don't want to operate. Airlines are paying way above the odds for aircraft that are now leasing because they can't get the aircraft that they've ordered. Aircraft are staying on the ground far longer than they used to because the performance of the engines, in particular, is nowhere near where they should be.

“It's not much point having fantastic new technology engines if we have to keep taking them off the wing and putting them into a repair shop. And what we're seeing now is that engines are spending far more time in the shop being repaired than they used to. Historically, aircraft are having to fly older than they used to. Airlines are having to lease and purchase even aircraft that they wouldn't normally consider operating.

“It's completely unacceptable. I think it reflects the fact that, to some degree, we're dealing with quasi-monopoly suppliers. In the past it's clear that there were certain suppliers abusing their dominant position. You have to wonder, is it in their interest to continue with these supply chain problems because they're the ones who have caused the problem, but they're also benefiting to a significant degree from the problem that they've caused, and it's at the expense of the airline industry?

“We've got to a stage where we've had enough. We've been patient. We've given them time to sort it out. They haven't sorted it out. There's no evidence that they are sorting it out. So I think we're going to have to ramp up the pressure and maybe look for support to force the suppliers to get their act together, because it's just not good enough the way they are at the moment.

“I'm reflecting the disappointment, the anger, the frustration that's being expressed to me. I think had I been running an airline, my patience would run out a long time ago. What is clear is that the industry is facing very significant increases, way above inflation for some of the spare parts that we are required to use on our aircraft and in our engines. Dealing with some of these suppliers who are critical suppliers to the industry but appear to be immune from normal competitive dynamics is very frustrating to us and that's something that we are looking at again. I'd prefer that we didn't have to go down that road.”

Sustainable Aviation Fuels (SAF)

In the ongoing quest to reduce aviation’s carbon dioxide emissions, the industry still struggles. Both in the supply/ demand balance and in the public perception of aviation’s culpability.

Walsh: “The message is very much this is a very dirty industry. That's not even necessarily factually true in relative terms. I object to anybody criticizing the activity in our quest for sustainability and reducing emissions. When we're talking about reducing emissions, it's really all about the energy source. It's not about the activity. There's also no activity in the global economy that doesn't need changing its source from fossil fuels to renewable fuels.”

“The US certainly led the way with the incentives, both state and federal, which provided a major boost to investment in the infrastructure for sustainable facilities in the United States. In Europe, we haven't seen the same approach. Europe has sort of taken the stick approach where they've introduced mandates and believe that if they mandate you to buy something, that that provides an incentive to somebody to produce it. That's just hasn't happened.

“I think we need to call out the big fuel producers who make great announcements and looked for lots of plaudits, Shell and BP included, who have withdrawn or have pulled back from the commitments that they made in terms of producing sustainable fuels. They need to play their part.

“France is a great example of this, where they've been mandated to provide a 1% blend. And they haven't been producing it. They are fined for not meeting the mandate, but they don't care. They're just passing those fines on to the airlines who have no choice but to use the product.

“So this is clear evidence where these mandates make absolutely no sense whatsoever. You mandate the fuel company to produce it. If they don't produce it, they get fined. They don't care if they're fined because they know that they are in effect, monopoly suppliers. They're just passing those fines on to airlines who ultimately will have to pass those fines on to consumers. There's zero environmental benefit. There is economic damage. The consumer is bearing additional costs that they shouldn't have to. And politicians are slapping themselves on the back for the wonderful measures they've taken to promote the production of sustainable aviation fuel without actually asking themselves are these measures leading to the result that we wanted?”

Electric & Hydrogen Aircraft

China Economic Daily quizzed Walsh on alternate propulsion. “At the end of the day, it all goes into the external combustion engine. Do you foresee the day when the energy density issue of the batteries could catch up?”

Walsh: “Electric, hybrid, hydrogen, yes, they'll play a part, but their contribution to the abatement that will be required will be small relative to the contribution that sustainable aviation fuels can make. And that's why we've tended to emphasize the need for production of sustainable fuels over other technologies. Aircraft that get delivered today will still be flying, more than likely, in 2050. And that's why we need something that can address the technology that we know exists today. Hydrogen-powered aircraft: Airbus has been talking about 2035 for the introduction of a commercial aircraft, but it's not going to make a big impact by 2050.

Schiphol Airport Restrictions

A Dutch journalist asked, “Why is it such a problem and what would you recommend or advise the Netherlands government?”

Walsh: “What is perceived to be a minor change to the number of movements has a massive impact on the quality of the network. And it is quite complex, but the idea that you can just reduce the number of movements and that you will continue to operate to all of the destinations served from Schiphol is a serious mistake.

“Schiphol is heavily dependent on transfer traffic to sustain the global network that it has. The reason Schiphol is so well connected is because it's an efficient hub. And the structure that KLM in particular have built up to connect the short-haul network into the long-haul network facilitates significant long-haul destinations that couldn't be served otherwise. I don't think the government in the Netherlands understands that. They think they can just adjust down the number of movements at the airport and the network will remain the same. It will have a massive impact if not properly addressed. And that's the bit that I think is very worrying, that they've shown little or no understanding of the dynamics of a hub airport.

London Runways?

Finally, a British reporter raised the perennial question: “Any thoughts on the airport situation in the UK and the various applications for new runway capacity?”

Walsh: “I do not expect to see a third runway at Heathrow. I think the cost and environmental challenge that Heathrow faces is beyond anything that could be achieved. You may see a second runway at Gatwick, but the prospect of a third runway in Heathrow I would rate at zero percent.”

Read More:

My interview with Walsh’s predecessor, Alexandre de Juniac, who also was forthcoming with reasoned opinions:

An Interview with IATA’s Director General - Uniting Aviation