In his opening speech on Tuesday morning at the IATA World Cargo Symposium, Tony Tyler, director general and CEO of IATA, covered a broad range of topics relevant to the air cargo industry. Important themes of his speech included collaboration across industry groups, establishing a better relationship with governments around the world and pushing technological innovations like e-freight. Tuesday afternoon, Tyler sat down with Air Cargo World to expand on some of these ideas and talk about how IATA will make sure cargo stays in the spotlight.
Air Cargo World: How do you think the public views air cargo, and do you think the industry suffers from a lack of positive PR?
Tony Tyler: It doesn’t really register with the public in the way it deserves to, but let’s face it, the public have got a lot on their minds already. Look what happened during the volcano airspace closures in April 2010, when people suddenly found that they couldn’t get things they were used to. Then it was pretty obvious that air cargo matters a lot.
It doesn’t need to be in the public’s mind, but it does need to be in the mind of policy makers and government regulators because it’s such a vital component of the airline businesses. I know from my days at Cathay Pacific, very many routes wouldn’t have been viable if it hadn’t of been for the cargo component. And, in fact, if you look at the success of Hong Kong as a cargo hub, you can see that the government does understand that; they get it.
ACW: But it seems like other governments around the world still haven’t understood the importance of air cargo.
Tyler: Many governments do understand it. There are plenty of examples – Malaysia, Singapore, Hong Kong, greater China, Korea, Japan. In Asia, people get the message. I’m not so sure about Europe and the United States.
The way we try to get the message across is we’ve done these economic studies that look at the value of aviation to local economies, and we talk about cargo as well as the passenger side. And when we lobby governments on issues from tax, airport charges, security, we remind them of how important air cargo is.
If you look at the reaction of governments following the Yemen printer cartridge incident, it illustrates that governments do understand the role of air cargo. Incidents like that, when they’ve happened on the passenger side – I’m thinking of the attempted shoe bomber, the liquids and gels issue – we’ve seen almost immediate knee-jerk reactions from governments implementing measures that once they’ve implemented they’ve found very hard to change. It’s quite often been a sledgehammer to crack a nut, and it’s imposed huge costs on the industry.
My fear, when running Cathay Pacific when that happened in 2010, was ‘Oh, no, here we go again; what are they going to do? We’re going to have a raft of regulations descend on us, and it’s going to make our lives impossible.’ But that didn’t happen. Governments had a second thought, and they didn’t want to kill this industry because of the huge economic impact it would have. So I take some encouragement from that.
ACW: One theme of your speech was collaboration and partnership among aviation organizations. Why does this seem like a new concept that’s hard to implement?
Tyler: It’s not a new concept. What I’m trying to do is remind people that we’d do a lot more together than if we pulled apart in different directions. Different organizations have different incentives and different priorities. But if you end up focusing on the differences, you’re not going to get as much done.
ACW: In the future, how important will cargo remain to IATA?
Tyler: I’ve come from an airline where cargo was a hugely important part of our business. Of course, even at Cathay Pacific, cargo was 30 percent, passenger was 70 percent. But having said that, the two are complementary, and if we want to do a good job for our members, and that’s what we’re here for, we need to make sure we’re doing a good job on the cargo side.
If you look at prospects for the future, it’s a really significant potential growth area for the industry. Passenger markets can eventually mature and saturate, but when you look at the way the world is moving in terms of the whole way that business life is organized, there’s huge potential in air cargo. Just-in-time management philosophies wouldn’t be possible without air cargo.
Product development cycles are so short now that you want to have the minimum amount of inventory because you may find that somebody else comes up with a better mousetrap, and all your mousetraps are rubbish. So you don’t want to make too many mousetraps; you just want to keep producing them and getting them to market quickly, cutting down inventory levels. Air cargo is the tool that helps you do that.
I’m a huge believer in air cargo. If it’s going to be important to the industry, then IATA needs to be on top of it and make sure we add value.