Transcriber: Monica Y. Reviewer: Annet Johnson
So thank you for having me.
I was very kindly introduced.
My name is Ben Katz.
I work for the Wall Street Journal and I cover the aviation and aerospace sector.
So today, as I mentioned,
I kind of want to take you on a bit of a journey.
So just kind of stick with me because we jump between a few different points.
Last year on the 23rd of May,
a flight from Greece to Lithuania was flying through Belarus
when pilots received a call from air traffic controllers.
The captain was given a code red alert.
Controllers claimed they had evidence
that a bomb had been hidden on board the aircraft
and was set to detonate over Vilnius.
The pilots were told to divert the aircraft
and instead land at the airport in Minsk, the capital of Belarus.
Among the 126 passengers on board was a 26-year-old man named Roman Protasevich,
a Belarusian journalist who fled Belarus in 2019
after becoming an outspoken critic of Alexander Lukashenko.
The pilots had little choice but to comply with the instruction.
When they landed, Mr. Protasevich was arrested and authorities put on a show;
disembarking the passengers, offloading the luggage and searching the plane,
but no bomb was ever found.
The diversion quickly became a major diplomatic incident.
The CEO of Ryanair, the airline that operated the flight,
and government officials, including Angela Merkel,
accused Belarus of fabricating the threat and coordinating what they called
a state-sponsored hijacking in order to arrest the journalist.
New sanctions were levied against Lukashenko
and Europe restricted its airlines from flying in Belarusian airspace,
a ban that's still in place today.
The industry warned that a dangerous precedent had been set.
What happens the next time that a pilot is informed of a safety threat
but doesn't know if she can believe the information she's given?
Air safety only works if there is trust between all parties,
but here it had been used as a smokescreen to manipulate a commercial aircraft flight
and in violation of decades-old international treaties.
Last week, ICAO, which is the U.N. arm that oversees global aviation,
said that new evidence had confirmed two things.
Firstly, that the bomb threat was deliberately false
and second, the Belarussian government had instructed the air traffic controllers
to divert the aircraft.
In recent years, fears have been building over the breakdown of aviation norms
as we’ve witnessed rising nationalism, protectionism,
and escalating geopolitical disputes.
It might seem pretty obvious, but aviation is arguably the industry
that most relies on globalisation and open borders in the world.
Perhaps the best evidence we have
is the crisis of the sectors experienced over the last two years.
From March 2020, in a matter of weeks,
governments put in place a range of measures which we’d never seen before
to protect against the spread of COVID-19.
Many effectively closed their borders to most international passengers.
Airlines in response were forced to ground their fleet.
Passengers were left stranded and had to be repatriated.
And millions of workers across the industry were retrenched.
Over two years, airlines lost $180 billion according to IATA;
that’s the International Air Transport Association.
That’s more than the combined profits that the entire industry had earned
over the previous five years
and it doesn’t account for the losses booked at airports,
at security and ground handling firms, at catering firms
and all the other companies that operate in the aviation ecosystem.
The industry is still reeling from the impact of COVID.
I love this photo, by the way, it’s fantastic.
This summer, as I’m sure many of you have experienced,
the sector isn’t quite having the best go of it.
Travel in the last few months has been characterised by long lines,
by lost baggage, delayed flights and last-minute cancellations.
And most of those issues are connected to the industry
just simply not having enough staff left to handle this surge in demand.
Before the pandemic, aviation bodies had already telegraphed
that the industry’s main tenet, access to open borders or open skies,
was on shaky ground.
If I can take you back to 2016,
in October that year, IATA outlined its annual passenger growth expectations
over the next 20 years.
In the forecast, IATA did something unusual.
So it gave its typical expectations for travel growth, but with a caveat.
The calculations were based on current international trade policies.
Under that assumption, passengers flying on commercial airlines
would rise by 3.7% annually,
almost doubling over 20 years and reaching 7.2 billion in 2035.
It then gave a second forecast:
what growth impeded by protectionism would look like.
In that world, annual growth would be capped at 2.5%
with traveller numbers reaching just 5.8 billion in 2035.
That reflects 1.4 billion fewer passengers.
One month after this forecast was given,
the former US President, Donald Trump, was elected to serve in the White House.
In his very first week in office,
he signed an executive order placing a travel ban
on seven majority Muslim countries, including Iran, Libya, Somalia, Syria.
The impact was pretty stark, pretty immediate.
In the eight days after the travel ban was first put into effect,
global bookings to the US fell 6.5%.
Dubai-based Emirates, the world’s biggest airline by international capacity,
said that its bookings to the US had dropped 35%.
And travels the other way from the US to the Middle East suffered,
falling 27% in the four weeks following the ban.
The executive order would face several legal challenges over time
and several tweaks, but ultimately it was expanded
to include countries such as Nigeria and Tanzania.
The restrictions would stay in place until 2021,
when President Joe Biden would revoke them on his first day in office.
In the same year that that ban was being put in place
another dispute was broiling.
In June 2017, Saudi Arabia and its regional allies would impose
an air and sea blockade on Qatar,
alleging that the really quite small Gulf Emirates had aided
and funded terrorism.
Saudi Arabia, the UAE, Bahrain and Egypt all closed their airspace to Qatar,
a move that would lock out Qatar Airways.
Behind me, you can see how critical Saudi Arabian airspace is
to the airline’s operation.
Qatar Airways, in response, had to completely redraw its network,
flying routes to Africa and Europe via Iran instead of going through the Gulf.
That added hours, fuel burn and crew costs to every single flight,
costing the airline billions over the nearly 4-year diplomatic crisis.
Fast forward to February 23 of this year, the day before Russia invaded Ukraine.
Our newsroom had been on alert that the war would start imminently
and I was spending the evening watching for any hints
that airspace was on the verge of closing.
It’s not really something that I realized until I started covering the industry,
but usually one of the first signs that a conflict is about to begin
is the closure of airspace to civilian aircrafts.
I remember sitting at my desk,
keeping in contact with the aviation authorities,
trawling the websites of air traffic controllers and regulators,
tracking planes in the sky and obviously following on Twitter.
The first sign really only came at about 6:30 p.m. and it wasn’t very clear.
Kharkiv International Airport, situated close to the border with Russia,
issued a notice that simply said that its runway would be shut for the night.
Here's what the notice looked like.
It was a basic operational instruction
mainly designed to tell pilots that in the case of an emergency
don’t land here, we’re not open.
What it didn’t say, which we needed to know as journalists,
is why the airport was closing.
Then we started to see more notices.
At 9:55 p.m., Dnipro Airport in central Ukraine closed and
Zaporizhzhia further south followed suit.
Each notice offered no explanation,
though we started to see unconfirmed tweets that tractors were being parked
along the runways to try and prevent Russian paratroopers from landing there.
It wasn’t until 2 a.m.
that we started to see aircrafts actually turning around in the sky.
Passenger planes that were flying over Ukraine were doing U-turns
and aircrafts that were about to enter Ukrainian airspace
were adjusting their trajectory to fly along the border.
At 2:30 a.m., the formal alert was published.
Ukrainian airspace had been shut to commercial traffic.
Over the coming hours, the closure would be extended to Moldova,
to parts of southern Russia and to parts of the Black Sea.
The war had started.
The next day, the political fallout began.
The UK was actually one of the first movers
banning Russian aircrafts and airlines from entering its airspace.
Countries from Poland to Bulgaria followed,
the US, Canada and ultimately the entire European Union.
Russia retaliated, banning airlines from what it called “unfriendly countries”
from flying through its own airspace.
Airlines were caught off guard.
In what turned out to be quite an emotional interview,
I spoke with the senior executives of Wizz Air,
which is a low-cost airline based in Hungary,
and they told me about their experience of the first hours of the invasion.
The CEO was woken by a call at two in the morning
from a government official to tell him that the airspace had closed.
From his bed, he alerted his second-in-command
who triggered the company’s crisis protocol,
which is really a protocol that airlines only use
in the case of a hijacking or a crash.
The team’s first task was to locate all of their employees in the country
and the second task was extraction.
Over the coming weeks,
all of the airline staff who wanted to leave were able to leave.
But the airline still had four aircrafts that are stuck in Ukraine, unable to fly,
because of the airspace restrictions.
In the 1970s, when relations between the Soviets and the West started to thaw,
Russian airspace became a critical through point for airlines.
By far the quickest way to connect between Europe and the Pacific Rim
is simply flying across Siberia.
Almost 195,000 commercial flights passed the Russian airspace in 2021
and, before the pandemic in 2019, that number reached 301,000.
Some airlines have built their business around access to that airspace.
Finnair, for example, established itself as a hub connecting Europe and Asia.
This is the route that Finnair now flies to Tokyo which takes up to 13 hours,
almost four hours longer than it was before the airspace had shut.
As hopes for a quick resolution to the conflict has waned,
the airline is now undergoing a complete review of its strategy and its network.
For the Russian industry, the impact of the sanctions would be more severe.
Take Aeroflot, Russia’s national flag carrier.
This is a message to passengers explaining that international flights
have been temporarily suspended due to unfavourable conditions.
The airline had spent the last two decades and billions of dollars
transforming itself from a Soviet-era airline
with a reputation for bland food and uncomfortable seats
into what actually was one of the highest-rated airlines in the world,
competing with the likes of Air France and British Airways.
It introduced a new fleet of Boeing and Airbus aircrafts,
it ditched its Soviet passenger jets,
it formed partnerships with companies like Delta Airlines
and it even became a long-term sponsor of Manchester United Football Club.
That entire undertaking has since come undone.
This flight was operated on February 27th,
showing how the airline had to navigate these new airspace bans.
While the restrictions have meant the loss of its key international markets,
sanctions on leased aircrafts have meant that
it’s unable to operate outside of Russia
without those leasing companies attempting to repossess their planes.
Sanctions have also been placed on the export of new jets and, crucially,
spare parts that Russian airlines need to properly maintain their aircrafts.
It's not clear how long those planes can safely fly without proper maintenance.
It’s a concern that’s shared across the entire Russian aviation sector.
But some officials in Europe,
for example the head of the European Union Aviation Safety Agency,
have suggested that the ban on spare parts be partly alleviated
simply to try and protect Russian travellers.
Russia’s invasion, the Qatar blockade, the US travel ban, Belarus’s hijacking
and the pandemic are all distinct examples of how dramatically the assumptions
that have underpinned global aviation for decades have started to shift.
IATA’s most recent 20th forecast is still optimistic.
It predicts that passenger numbers will reach 8 billion by 2040.
In a best-case scenario, that number could reach 9.7 billion,
but in a worst-case, just 5.6.
A lot has changed since the 2016 forecast
and there’s a lot of repair that the industry still needs to go through
as it emerges from the pandemic.
That’s evident in the scale of the travel disruption
that we’ve seen in recent months.
But even as airlines make apologies for losing your bags
or for canceling your flights, CEOs are so relieved.
They’re taking this better than expected surge in demand this year
as proof that people still want to travel.
One of the things that the pandemic showed us
is that for those of us who have the disposable income,
access to the skies is not an untouchable privilege.
As the world becomes more political
and we encounter changes that we never really imagined,
the promise of air travel becomes more precarious.
What we’re now facing is this question:
“Will air travel in the future be as accessible as we remember
and what does it mean for the world if it isn’t?”
Thanks.
(Applause)