It feels much longer but Willie Walsh has only been the new Director General of IATA since 1 April 2021. It has not taken him long to make his mark. You wondered whether working for IATA, Walsh would need to be more of a politician than a CEO. However, what is clear, is that Walsh will be a politician on his own terms only.
In one of his first industry interviews since he took over as the top man at IATA, Walsh was speaking at this month’s CAPA Live event, the monthly virtual conference hosted by aviation industry news and data company CAPA. Whilst starting off by saying that IATA has an important role to play within aviation, it didn’t take long for Walsh to comment that ‘IATA is a bureaucratic organisation and it doesn’t need to be’. It would seem perhaps that one of Walsh’s early priorities might be to slim down IATA so it can better serve its airline members.
Walsh has always been an outspoken critic of governments and politicians in general and it did not take him long to warm to one of his favourite themes. Walsh commented: ‘You know my style; I have never been shy of criticising politicians if they need to be criticised. It can be easier for the Director General of IATA to say things that might upset politicians than for airline CEOs.’
Walsh’s main concern is that politicians are afraid of making decisions as they are afraid of the consequences. The current COVID-19 pandemic is a case in point, with Walsh critical of travel restrictions, especially given the success of the vaccine rollout. Walsh noted that ‘aviation is a key to freedom all around the world to have cheap fares, but people can’t afford to travel due to high testing costs which is not right.’
Walsh was extremely critical of the need for PCR tests when vaccine rates are high and the cost of tests could prevent people from travelling. Citing research undertaken by IATA, Walsh said that in Malaysia a PCR test costs $27 but in Japan the cost was $278. Walsh’s view is that as governments mandate tests, governments should cover the costs of tests or at the very least not apply VAT (sales tax) to the costs. Walsh pointed to France as an example of a country where the government is covering the costs of PCR tests. ‘IATA needs to shine the spotlight on countries that are ripping off consumers, we need to challenge whether PCR costs are needed before and after travel; we need to manage risk.’
Moving onto vaccine passports, Walsh was asked about the proliferation of different versions of documents proving passengers have been vaccinated. Walsh cited IATA’s own digital solution, stating that data needs to be digital as airports will never be able to cope if every passenger must go to a check-in desk to show proof of their vaccination. The IATA solution integrates into airline apps, so that passengers can do everything in advance of going to the airport. Walsh also pointed out that there needs to be an arrival solution: ‘We want to work with governments on this. Whoever develops this (arrivals app) needs it to be capable of integrating with airline processes and government immigration services.’
The discussion moved next to the rise of nationalism and the restrictions this is placing on travel. China was cited as an example of where arriving passengers are restricted to those that have been vaccinated with the Chinese ‘Sinovac’ vaccine. Walsh believes that over time, there will be more alignment, as more vaccines become recognised, although it may be 2022 before this is more widespread.
Walsh was asked about the return of business travel, as Lufthansa had recently stated that it expected only 80% of business travel will have returned by 2024. Walsh was keen to point out that not all business travellers fly within premium cabins, citing the fact than when he was CEO of British Airways, a significant number of people in premium cabins were travelling on leisure. This is a trend he expects to strengthen over time, allowing the industry to deal with any reduction in business travel demand.
Mr Walsh was then asked whether, following the pandemic, we will see a loss of air liberalisation. Walsh was cautious in his response but didn’t believe it will happen. ‘You might see a minor change but not a step change in behaviour.’ Asked if the UK’s withdrawal from the EU would mean less European liberalisation, Walsh moved back into attack mode, criticising both the UK’s and Europe’s response to the pandemic: ‘Mistakes have been made,’ he stated. Walsh elaborated by saying he was disappointed with the suspension of free movement within the EU. ‘The EU states should have been working more closely together,’ he noted.
Walsh went on to say that global pandemics have been on every airlines CEO’s risk register but admitted he had not foreseen countries and whole regions shutting down travel due to a pandemic.
Willie Walsh may have moved from the top seat at IAG to the top seat of IATA but he remains a strong and respected voice within the industry, one that remains willing to be critical of politicians and governments alike. The industry would be poorer if he ever lost that desire to speak his mind or his passion for aviation. The next few years at IATA should be an interesting ride – please fasten your seat belts.
CAPA Centre For Aviation holds monthly virtual conferences which are currently free to attend. To register for the next conference, visit https://centreforaviation.com/events/live