IATA: Fedex head David Bronczek focuses on industry viability

Singapore
Source:
This story is sourced from Pro
See more Pro news »

FedEx Express chief executive David Bronczek took over the reins from Tony Tyler as IATA chairman in mid-2010 for Giovanni Bisignani's last year in office and oversaw the selection of the director general's successor - who just happened to be his own predecessor! IATA's first chairman to come from the freight sector in more than a decade, Bronczek has witnessed the market recovery during his term, but also challenges as the industry flies through more turbulence.

"In many ways, the aviation sector is facing an inflection point that comes along once in a generation and that shapes the future for decades to come," observes Bronczek. "Even as we deal with immediate challenges such as energy prices and security concerns, our focus has to remain on building the viability of our industry over the next two to three decades. Issues of capacity, infrastructure and regulation will always be core priorities. But increasingly we're seeing other factors, such as the environment and energy alternatives, that have a greater role in our decision-making."

A DIFFICULT YEAR

Bronczek says that even though it has been "a difficult year", it remains "an incredibly exciting time to be part of it". He believes that aviation's economic recovery is a work in progress as the returning spike in fuel prices erodes margins, which means that the industry's success will depend on its ability to improve efficiency. An important part of this will be its ability to compete on a global scale, which will be driven by the harmonising of systems and processes.

"Harmonisation of worldwide air traffic modernisation programmes continues to be a challenge but gradual progress is being made," says Bronczek. "IATA has been vocal in expressing our desire for a harmonised system and we're starting to see signs that the service providers and regulatory agencies are listening."

Infrastructure is another major issue that must be addressed, says Bronczek. "As I know from my vantage as IATA chairman, infrastructure is a global issue and any barrier in the global system has ripple effects."

During Bronczek's watch IATA launched its "Vision 2050" initiative which is focused on generating long-term, sustainable solutions to help the industry become more competitive and ultimately, more profitable.

"IATA projects that by 2050, our industry will be handling 16 billion passengers and 400 million tonnes of freight. Clearly, we need an over-arching plan for dealing with numbers of that magnitude. The four pillars of Vision 2050 - profitability; infrastructure; sustainable technology; and meeting customer needs - will help move us toward that goal."

Bronczek says he made the issue of climate change a priority when he became chairman. "We still need a globally-inclusive solution in aviation. While that result was not achieved at COP-15 in Copenhagen or COP-16 in Cancun, the united front of our industry has helped governments to realise we are serious about addressing this issue. "I'm also encouraged that despite weathering the worst financial crisis in our history, airlines have kept their environmental initiatives largely intact," he says.

"Another promising area is second and third-generation sustainable biofuels from non-food sources, such as algae, that have the potential to reduce our carbon footprint by as much as 80%. That would be an enormous breakthrough. It would help protect the environment while promoting energy independence."

Bronczek says that his year as IATA chairman has broadened his perspective on the industry, and that his cargo background makes him mindful of the significant differences between the passenger and frieght sides of the business. "For example, IATA now estimates that airlines globally are spending $7.4 billion annually on aviation security, a 25% increase from the previous estimate of $5.9 billion," he says.

"Security measures for air cargo should be threat-based and risk-managed. Differences in levels of threat from different areas of the world, or from different types of operations (passenger and all-cargo) should be recognised rather than adopting a one-size-fits-all approach," he adds.

HONOUR

Overseeing Bisignani's last year in office was "truly an honour", says Bronczek. "During his tenure, Giovanni rebuilt IATA and set a high standard of leadership. He knows we can't afford to fall into the trap of making quick fixes. We need long-term solutions.

"Like Giovanni, Tony [Tyler] has a deep understanding of our industry and where we need to go. He's committed to moving the climate change debate forward in a way that's constructive and realistic for aviation. His experience leading Cathay Pacific will give us much greater insight into the Asia market," he says.

Looking ahead, Bronczek sees fuel price volatility as "the single biggest wild card" in the economic recovery, but remains assured that members are still counting on growth. "The World Trade Organisation forecasts world trade to grow this year by 6.5%. That figure is compatible with the 6.0% average annual increase in trade the WTO recorded between 1990 and 2008, just before the recession began. The numbers show the global economy is moving in the right direction. As an industry, we'll be able to focus again on investing in growth for the long-term."