Capacity and infrastructure – how can the imbalances between supply and demand be addressed?

Transcript

Peter Bellew:So this session is Capacity and Infrastructure and Addressing Imbalances Between Supply and Demand. One of the panelists said, how come there isn't an OEM here? And I guess if I was an OEM, I'd be hiding in the bushes when you're on a panel topic like this.

Allan Kilavuka:Thank you.

Peter Bellew:If anybody wants to ask a question, please, we'll try and make this as interactive as we can. I believe there's a Slido system working, or just put your hand up.

Marco Naverra:Thank you.

Peter Bellew:And we'll get to you. So, very fortunate, got a great panel, great diversity here. Aviation is growing faster than the infrastructure can cope with, and we all know that. And then the supply chain has also been quite chronic. We've got congested airspace, bottlenecks at certain airports, and we've got limitations in getting workforce at the moment. Also, the airlines, airports, the air navigation service providers are facing mounting expectations to increase efficiency and resilience. And the central issue extends beyond the specific constraints. We've got to find solutions to these problems. And key considerations are evaluating how we expand the infrastructure, optimize the existing assets we've got, leveraging technology. And interesting, in the last panel that everybody was saying that they really haven't touched AI yet, and also implementing policy reforms. We've got a great panel today. Um, if you— we have a living legend here, Paul Griffiths, 18 years in Dubai. I'm not sure there was anything more than about 3 or 4 hotels open then, uh, Paul, possibly when you started. So Chief Executive Officer of Dubai Airports, and under Paul's leadership, Dubai International has become the world's busiest international airport. And maybe that even deserves a round of applause, I think.

Michael Stanton-Geddes:So thank you.

Peter Bellew:And Paul's driven innovation resilience. He was just showing us there the app where he's able to see how many people are queuing and the queue times and everything. No, no, how many people are not queuing, or how many people are not queuing at the duty-free shop because they're making sure they get the money off them. And he's deep in development of the new Dubai Airport at Al Maktoum. Which there actually is an airport there already because my previous airline, we operated a number of flights there over the last 6 months. It's a super facility and that's set to be the world's newest, largest, and busiest airport. So we've got Predrag Vranjkovic from Eurocontrol. He serves as Head of Strategy, Engagement, and Institutional Relations. That sounds like a tricky portfolio, Predrag. Yes, it is. And he joined Eurocontrol in 2009. He's held a variety of senior roles there. And he served as CNS program manager, including work on the Single European Skies. So we'll be putting him under pressure why it isn't fully working yet. So please welcome Michael Stanton-Geddes, Director of Economics Compliance at ACI Europe. Michael has led ACI's economics, competition, regulatory pricing work since 2017, and he had a stint at the World Bank as well as at international corporations such as General Electric. We've got Diana Siegel, Vice President of Commercial Programs at Electra Aero. Diana is part of Electra's founding executive team, and since joining in 2020, she's yielded a pre-order book of over 1,000 aircraft. Experience at Aurora, and prior to that, she worked at BCG and Airbus in significant roles. And thankfully, we have somebody from the airline sector. So Allan Kilavuka is a leader. He steered one of Africa's most important airlines through some of its some really challenging years, and he has experience also in the low-cost sector as well, which, uh, they're merging that. And Allan, CEO of Kenya Airways, calm but decisive strategist, and his leadership has been pivotal reshaping the airline's resilience, sustainability, and customer focus. So great to have such a panel. Um, Paul, maybe we start with you. Um, I'm fascinated how you manage all the egos in Dubai. And you've squeezed 92 million passengers into 2 parallel runways, which is remarkable in itself. But it's the way that there isn't the same grief and hassle about slots and discussion at Dubai, even though you've got dominant locally owned carriers. How do you— how have you done that? How have you balanced that? How have you got the whole place pulling together? Because I think that's a key part of what we're discussing here today about making infrastructure work.

Paul Griffiths:Well, I think one of the key differences— I mean, I ran Gatwick for a few years before I went to Dubai, and I think the contrast between the two is very stark. When I was at Gatwick, I spent most of my time apologizing to people, you know, sorry about the Jet A1 on your daffodils, sorry about the noise, sorry about those DC-10s, etc. Just apology, apology. When I got to Dubai, it was just so different. My chairman just basically said one KPI, don't constrain growth, just keep your foot on the gas, keep everything running. Everyone understands in Dubai that the sector's economy and the whole social structure of Dubai depends on having a thriving and expanding and growing aviation sector.

Predrag Vranjkovic:Yes.

Paul Griffiths:And when everyone in town knows that you've got to be number one and you've got to push towards that, we don't have those sorts of problems. I mean, I've had— in the last 18 years, I've had one noise complaint. I used to get at least 12 a day at Gatwick. And it was because we were having the Dubai Airshow and the UAE display team were practicing over a certain sector. Now, most people in the room would actually quite like that.

Peter Bellew:Yes.

Paul Griffiths:But this individual wrote to me and said, look, you know, I don't like the noise and it's all a problem. And, um, I think I can answer your question about the difference in attitude. Um, I wrote back and said, look, it's just for the air show, it'll be over in a few days, um, and then you'll have 2 years before the next one. And he wrote back to me and said, I'm sorry, Mr. Griffiths, I don't really like your response. I'm going to complain to the government. And I I just wanted to write back and say, dear sir, we are the government. Unfortunately, I couldn't. I think the thing is, you see, no one really says that this is a problem in Dubai because we are so focused on the value that aviation delivers. It's something like 43% of total GDP is originated from aviation.

Peter Bellew:Really?

Paul Griffiths:Therefore, we understand that. I think that's the greatest shame Other countries that everyone complains about, you know, aviation being a pariah of the environment, it's a problem, etc., etc., the noise and everything, but actually the goods that it drives, the social and economic progress it enables, that is not really as prominent as it is in the aviation scene.

Peter Bellew:So in the rest of the world, we need everybody to think like a stakeholder, I guess.

Paul Griffiths:Well, I think the thing is, you know, if you can actually focus on an outcome that's common for everyone, and obviously we have to mitigate things like the environmental impact, etc., and we're a big leader on policy for SAF adoption and finding new technology to create biofuel, etc., so we're really focused on that as well. We've got an abundance of sunshine to be able to get the power to do it. So it's really understanding what the supply chain is, but being focused on driving an outcome. That's the biggest difference. Great.

Peter Bellew:Allan, you fly to Dubai, I know, twice a day, so you've got slots there. For you in Kenya Airways, what's your biggest constraint right now on dealing with balancing supply and demand? Maybe it's the OEMs. I don't know if you want to talk about that.

Allan Kilavuka:Yes. I think everybody would guess what I'm just about to say. It's aircraft. It's capability. It's capacity. To be able to fulfill our schedules on time, to grow. I just wanted to ride on one thing that Paul was talking about. By the way, I'm the one who asked about the OEMs. I was surprised that there's no OEM here because I was going to look them in the eye and say, what are you doing to us as airlines? Paul said that in Dubai or in the UAE, the governments, the UAE are really focused on supporting aviation and propping it up as it supports GDP growth, social and economic development, and the other way around. The socioeconomic growth then, of course, supports aviation growth. I think the problem we have in Africa is exactly the opposite, where we don't see this as aviation as being really center to supporting economic and social development. We see this as— governments see this as a revenue source. What tends to happen is that they increase taxes and make it completely unviable for aviation to thrive and grow, and therefore, in turn, support economic development. Airlines are restricted from— they don't have sufficient funding, first of all, to be able to grow and expand as they should.

Diana Siegel:Yes.

Allan Kilavuka:Also, traveling in Africa becomes extremely expensive, and so of course it retards growth in terms of passenger growth and even cargo growth, and in turn, of course, retards economic growth. In fact, one of the statistics I was looking at in the morning where you're supposed to have 2 times growth in your passenger and cargo numbers compared to GDP, well, in Africa, that's not the case. Because the average growth rate in Africa is about 4.5%, and if you look at the passenger numbers growth year on year, it's about 5%. It's 1 times, and the reason is because it's stifled. It's constrained because of policy issues. Our biggest problem today in Africa is that we don't have sufficient capacity. Actually, tomorrow I have another panel. I will expound more a little bit around How do we improve that and how do we grow in Africa?

Peter Bellew:Great. And Predrag, Eurocontrol, I always think it's poorly named because you go from Turkey to the Arctic, down to Africa and over into the Atlantic. So you're quite a bit more— so airlines are struggling with air traffic space across Europe at peaks right now. Do you think, are we ever going to see the full implementation by all the countries of the single European skies? And allied to that, Is it going to become much easier and cheaper to do it with the AI infrastructure coming along?

Predrag Vranjkovic:Yes. Well, it's, it's a very difficult and complex file, as you know. For years and years, we are trying to make, you know, to do this giant leap to the truly functioning single European sky. But it's just the— every time we are about to do that, something extraordinary happens. You know, we were just completed the update of the file before COVID started, then everything fell apart, and then to restart it was It was very difficult, but finally we had a new package coming out end of last year. And now we are— I think Commission is working on harmonizing the framework with the applicable rules. On our side, as the EU network manager, indeed we are managing the airspace. We are working with air navigation service providers to provide the best possible optimized performance for all the airlines. And we're really, you know, doing everything that we can to, you know, mitigate all the problems in the network. The AI is one of the tools that actually helps us. I'll give you an example. We use it as a window into the future, as a predictability tool, and we use it for predicting the airport regulations, for example. We are using it to predict the arrival times because we just amassed a huge amount of data in our systems. All the flight plans come to us. We also contain databases about all airspace across the European network. We can unlock that potential of the data. We also plan to use it more in the next horizon, 2026 to 2029. We are developing more tools that will help us to become more agile, to predict the problems more easily, and share them cohesively with our network. Currently, we are in the process of doing the integrated network management project, which is a big modernization project. Our legacy systems are 20 years old. We are now taking the technological leap and integrating all these separate legacy systems that we operated into one system in a big data cybersecurity lake, which we can then use to expand these tools. To your question whether we will ever have the truly single European sky, I think now we have a huge opportunity because if you see air navigation service providers across Europe, they're all embarking on the same project. We have 2 major technology providers. We are seeing technology consolidation where I think 40-50% of national air navigation service providers are moving to Thales TopSky platform, and then the other half is moving to Indra's iTAC platform, which are digital platforms. If we ensure in the next 2 years that our I&M digital platform and these digital platforms are integrated in a seamless way, Then I think we will be able to mitigate the fragmentation on the national level and have really, you know, true single European sky by exchanging the data, working very close together. So I think this is the approach that we are taking in the next year.

Peter Bellew:And Diana, you know, connected with that, you know, when you're talking to operators, what part of the world do you see the most demand from regions for your type of mobility solution? And then alongside that, you know, what's the gap between what the communities want and the infrastructure is there. You know, you've got something like Al Maktoum being built at the moment. You know, are you working with those guys to try and, you know, coordinate?

Diana Siegel:Sure. And just for quick context, we're building a 9-passenger hybrid electric aircraft that takes off in an ultra-short distance using blown-lift technology. And when we say ultra-short, we mean very, very short. 50 meters of ground roll is the distance that we take to get airborne, then climb up really steeply. North of 7 degrees, even if you lost a motor, and can maneuver in really tight spaces using very slow approach speeds. While it's a fixed-wing airplane, it operates very differently and opens the aperture to what kind of infrastructure you can get in and out of. Just to give an example of a couple of conversations that we're having with operators and customers, when we're speaking with major airlines, the conversation is mostly about how do we get additional feeder traffic into our already congested hubs, and landing on the main runway is pretty much a non-starter in that conversation. We're working with Boston Logan Airport, for example, looking at how you could use stub runways, taxiways that are not used in the current airport configuration and the flow configuration, maybe even take off and land from non-movement surfaces similar to what helicopters do today and stay separate from the rest of traffic. traffic so that you could add additional feeder services where they absolutely see demand. Just an example, there's 9,000 people that drive from Norfolk to Washington, D.C., a 4-hour drive every day to catch a flight out of DCA. No opportunity right now to get additional feeder traffic in there, but if you can stay separate from that main traffic from larger transport aircraft, that gives airlines at least the opportunity to bring in additional feeder traffic premium passengers, which is really valuable for that profit potential. Other use cases are direct point-to-point connections. JSX, Surf Air are customers that we're working with. They bypass the major hubs entirely. Plus, it gives you the opportunity to go to places that don't have air service at all. Ski resorts, we've just done a demonstration up at Snowshoe Mountain in West Virginia. No way that you could fit a full-size airport there, but If all you need is about a soccer field-sized space, with the EL9 Ultra Short, you could actually provide air access to that community.

Peter Bellew:Great. And Michael, you know, with the debates about how all the infrastructure is going to be built, it always mystifies me how some of the airports justify some of the expenditure. But the debates around price caps and CapEx oversights— Heathrow and Rome and even in Dublin and Arlanda— What do you think is the impact of the consequences of regulation on the consumer or the ability of the airlines to operate? How do you see that that gels?

Michael Stanton-Geddes:Yeah, that's, that's an important question. And I'm, I'm with the Airports Trade Association, so normally my, my, my zone here is actually upstairs at the Global Airport Development Conference, where that is the question that's, that's on the table. How do we make sure to finance?

Peter Bellew:But you're with the customers here now, the airlines.

Michael Stanton-Geddes:Customers.

Allan Kilavuka:And that's—

Michael Stanton-Geddes:and not only that, we're with the ecosystem. That's what's great about this panel is we're discussing the capacity constraints. The first point is that airports have the ecosystem, but airports have done a really good job of delivering the capacity that's needed. Airports like Dubai, airports across Europe are maximizing the use of the capacity. One of the challenges is local operating restrictions. A lot of airports that could theoretically handle a lot more traffic if we loosened curfews, allowed more movements on runways, changed operations. The— one of the questions was, what's the biggest challenge to building that capacity that's needed? We had in Europe in the decade up to COVID around roughly on average around €10.5 billion a year of CapEx. COVID hit and airports canceled, postponed, delayed, stopped projects. A huge stop in construction and development, and that's now coming back to bite with inflation costs much higher. So we now are seeing projected CapEx costs in Europe €15 billion a year, peaking on average over the next 5 to 7 years, peaking at around €19 to €20 billion in, in 2030. That is necessary CapEx. Airports are constrained, they're saturated. The largest airports are already at 80 to 90% capacity saturation on average, but airlines want to come in at the peak hours. We deal with the slot allocation regime to manage that excess demand, but we need to make better use of those slots and make sure that the airlines flying are using those slots most efficiently, or that we're pushing them into shoulder and off-peak hours. And then even when we solve the, the congestion throughout the day and throughout the season, we still need to build more. And that's where it's important to have stable, predictable, and understandable price regulation that convinces the investors upstairs at GAD that the airport sector is a place where you can put your cash. I don't think we're there. Alvarez Marsal does an Infrastructure Pulse Survey. They've done it for about a decade, twice a year. The most recent one came out a month ago, and there's only one sector in Europe that is less favorable than airports for infrastructure investors, and that's the regulated water sector, which has had— for the people from London in the room, we know there's been a very bad series of news and developments in regulated water. That's as negative as you can get for investment, and right in line behind that is airports. Why is it that airports are not seen favorable for investment? 2 big reasons: a lack of political commitment and stability and unfavorable regulatory frameworks.

Peter Bellew:Okay, which kind of brings us back to the success story of Dubai, where you've proven you can do it. Build it and they will come. And, you know, I'm fascinated at the moment, you know, I always look at numbers. I think you're squeezing 90 to 100 movements an hour out of The 2 runways? Well, I think on, on an extraordinarily good day, Gatwick gets close to 50 with 1 runway, but 2 parallels, it's very tricky to do it. How are you doing that? And I saw reference to AI was part of the solution. Can you talk about that maybe? Because I think the audience would be fascinated.

Paul Griffiths:Yes, certainly. I mean, not having capacity restrictions through the day is very helpful because one thing that fascinates me, you know, about airport investment People don't talk about the fact that they're spending billions on airport infrastructure and then it's closed for one-third of the day. We're very fortunate, we're 24/7. As you say, we have 2 non-independent runways. They have to operate independent mode, but we managed to squeeze the maximum capacity out of them by sequencing the aircraft very carefully because, of course, we've got a mixture of super-heavy and and lighter aeroplanes. If you get the sequence right, you can get the capacity right. We're very fortunate also having probably the world's largest concentration of the very largest aircraft. Our average passengers per slot is around 235, and I think Heathrow is about 180-something. That's very fortunate. I think looking at AI, looking at our stand planning, making the whole thing really run very, very competitively and Everyone focused on making sure that flow is kept moving at the optimal rate. I mean, that is really, really important. But it's interesting, this question about airport infrastructure. I wonder sometimes if we're looking through the wrong end of the telescope. I mean, take the London system. There are 17 airports within a fairly short radius of the center of London, but, you know, you could argue that it's only 2 or 3 of them that are really capacity constrained. And a fundamental role of an airport is to provide a seamless interface between travel on the ground and travel in the air. And I wonder whether that problem of airport capacity being so poorly distributed in terms of its utilization is because the ground links are not efficient.

Peter Bellew:Okay.

Paul Griffiths:And I'm very enthusiastic about hearing about, you know, eVTOLs, eVTOLs and short takeoff aircraft that could use, you know, could transform personal mobility to make that link between airports and surface transport so much more effective and efficient. Because the reason that those smaller airports are not utilized is because the transport links to them are so challenging.

Peter Bellew:How do you coordinate? Do you have a cross-company, you know, dnata, the airport, Emirates, FlyDubai, the carriers? Or do they just develop the technology independently in-house?

Paul Griffiths:Well, the very fortunate thing is our chairman, Sheikh Ahmed bin Saeed Al Maktoum, is the CEO of virtually everything in Dubai. He's got about 35 companies, and literally Emirates, FlyDubai, the airports, the air navigation service, the handling company, all the hotels, everything is under his chairmanship. We know exactly what the agenda is, and everyone knows how they need to deliver. So we don't have a massive sort of, you know, board meeting every week where we all come together, but we all know what needs to be produced and we're all very well coordinated. And the thing is, you see, you don't want to be the guy round the table who is the weakest link in the chain.

Peter Bellew:Yes.

Paul Griffiths:And that sort of pressure is slightly benign but always there. You know, we can't be the guys that actually are the reason why we couldn't get another slot in that particular hour. We are not the guys that suggest that the ground handling services are not quite up to scratch. You know, the whole thing has to work really, really well, and no one wants to be accountable for a problem.

Peter Bellew:So we need a benign dictator at every major airport?

Paul Griffiths:I would think a benign dictatorship and close coordination. Because the problem is, as an airport manager, you're responsible— you're accountable for everything, but you're responsible for very little. Out of the 100,000 employees at DXB, I employ directly only 1,700 people.

Peter Bellew:Really?

Paul Griffiths:That's twice— that's half the number I had in 2007 when we are at 3 times the traffic level. Investment in systems, process, and people is the absolute key. And having that pyramid where being number one and not constraining growth is right at the top.

Peter Bellew:Allan, with the rapid drop in the prices for AI-based aviation technology, because some of the decrease in the cost of the computing and the systems is 10x less possibly with what's coming, do you think Africa can benefit quickly from that? Do you think you can nearly jump a generation of technology possibly? and start investment to allow quick development of the aviation industry?

Allan Kilavuka:Yes, absolutely. Africa has done that in the mobility sector, in the tele-mobility sector. We jumped a generation from landlines straight into mobile technologies, so we can do that in aviation as well. That's perfectly in order, but there are In my opinion, some easy pickings. There's quick wins that we can quickly gain at the moment. In fact, one of them, again, I go back to Paul, is exactly what he said, which is how do we coordinate the ecosystem that works best for not just the countries, because we have 54 countries in the continent, but for the continent, because it is completely underserved.

Robert:Yes.

Allan Kilavuka:That's a very easy one to do. How do you coordinate better so that all the entire ecosystem works best for the benefit of aviation? Because we're only 16% connected. We should move to at least 50% connected within the continent. Then in addition to that, going back to the issue that I mentioned earlier, which is what are we today suffering from? High costs, lack of spare parts. lack of capacity today. Unfortunately, in the region that I serve, it is the most fragmented ecosystem in the world. We have— I was looking at the number of commercial airlines. In fact, that number, because we don't register some of our commercial airlines, we have the highest number of commercial airlines, most of them with 1 or 2 aircraft. Of course, completely unviable. The solution to that is how do you consolidate those to make them a lot cheaper to present to our passengers and customers? Unfortunately, that's taking long and it's draining the spirits of aviation in Africa. The faster we move into consolidating the space, the faster we move into You spoke about AI, but I say coordinate better. Again, we have 54 countries, all of them with separate regulations. Recently, the Gulf regions have come up with standardized aviation regulations that makes it easier for them to coordinate and work together. We have 54 of them. A lot of them have different languages, like Europe. Some of us speak English, others French, and all manner of other languages. languages. Coordinating together will make aviation much better, much faster. Maybe the last thing I want to mention is I think when it comes to capacity and support, if we work together, we can help make our schedules much more easier to coordinate. A lot of us have— I mean, my capacity, for example, I completely use my capacity. 20% of my aircraft is on ground because of issues around supply chain, like we mentioned in the morning, but I know that many airlines in Africa who have— are utilizing only 4 hours a day on the aircraft. I use about, on average, 15 hours on any of my aircraft, one of the largest in the world. We can balance that usage, utilization of aircraft.

Peter Bellew:Mm-hmm.

Allan Kilavuka:by working better together and fulfilling completion of our networks.

Paul Griffiths:Great.

Allan Kilavuka:I guess what I'm saying is I'm agitating for more working together and coordinating better.

Peter Bellew:Predrag, with the growth that's happening so rapidly in Europe at the moment, and there's a massive forecasted rise in demand, where do you think the biggest gaps remain with all the infrastructure right now? Because you guys can really see it from Eurocontrol on a live basis.

Predrag Vranjkovic:Yeah, so I mean, we are coming from a summer where we performed much better than, than we did in the previous, you know, '24. So we looked into, you know, what really worked this year, you know, how did we achieve these better results with even a traffic growth scenario in comparison to the last year. And also, I mean, we, we, we are also very close to our air navigation service provider to, you know, plan better for the, for the next, next year. We released the airport forecast that says 3.5% on average increase for the next year, but the growth is distributed in a different way throughout the network. In the south, you have stronger growth, almost double-digit in some of the states. Southeast axis is very— there is a strong capacity shortage there. Then the north of Europe is growing a little bit slower than than the rest, and the reasons are different. You know, we are operating very complex situation with Ukrainian airspace still being closed, and we are trying to overcome this. There is less airspace available to, you know, to operate the network. And, you know, these are the things that we are now capturing. And going into the next summer, we, we are mitigating that by a number of measures. The first one, we are working with the air navigation service provider to improve the planning, you know, staff availability, Fuel is the main driver. The ATCO availability is an issue that, that is there. So we are looking how to work on a smarter rostering, better sector opening schemes. How can we divide the airspace in a better way to deal with this demand and balance the, you know, the, the capacity and demand in a more efficient, dynamic way? So these are all things that we are doing. Also, we, we had a, you know, very good performance related to the weather last, last season last summer because we have implemented new weather procedures in the network management, which were just, you know, as, as my previous speaker just said, you know, collaboration has a power. And the summer before, we did not have these weather procedures, and then we saw, okay, we have a lot of weather-induced delays, maybe we should bring all the MET people from the local air navigation service providers together in a procedure where we discuss things. By doing that this year, we have saved 40% of weather-induced delays.

Marco Naverra:Yeah.

Predrag Vranjkovic:Just because we thought we saw that different regions are doing things in a different way. There is a power in harmonization, collaboration, definitely.

Peter Bellew:Again, it's a benign dictatorship for next summer if required.

Predrag Vranjkovic:Exactly, coming back to that. I think these are the initiatives that we will do for the next summer.

Peter Bellew:Diana, I didn't realize it was only 50 meters you need. That's like, in Dubai, that'd be 2 car parking spaces for Bentleys.

Robert:One.

Peter Bellew:Sorry, excuse me, I don't own a Bentley. So, um, what, you know, what kind of misconceptions do you see from airports? Because I think they're cautious and they probably don't grasp what you're trying to do. And that, you know, what kind of confusion do you see about infrastructure that you need that you don't really need?

Diana Siegel:Probably inadvertently, as the advanced air mobility community, we've generated this picture of that you need these large fancy structures, elevated structures, big designs, that you need at least 10 to 20 of those facilities to make a network work in a city. With this design, we aim to keep it very simple for airports and infrastructure developers. Like you said, 50 meters of ground roll. So if you're thinking soccer field-sized space is pretty much all that you'd need on the ground. The simplest ultra-short access point that works is— we've done it up at Snowshoe Mountain— was a graded grass strip. Cost us all of $15,000 to do that. If you contrast that with the The smallest municipal airport that you could build probably still runs you to double-digit millions invest and millions that it takes to operate it. With that concept, really redefining what it means to be an airport and how simple it could actually be. Also, for charging, it's hybrid electric. Think plug-in hybrid. You can plug it in and save on fuel burn, but it's not required. The turbo can recharge the battery and you're good to go at an outstation.

Peter Bellew:Okay, and Michael, there's a lot of talk about, you know, smart airports and digitalization. You know, what do you think is actually working or is going to make a short-term contribution today? And what do you think still feels like, you know, 10, 20 years ago?

Michael Stanton-Geddes:I mean, again, the industry is— the development in the industry is fantastic, from the innovations that were anticipated when the first big European hubs were being imagined in the 1940s, we're talking Heathrow or Charles de Gaulle-Roissy, the— already back then they were talking about automated baggage loading. It felt like science fiction then, it feels like science fiction today, where airports are working on cost control and making digitalization part of the The airport business is in operations, security, internal organization and management of the terminals and facilities, building BIM systems, BIM, for construction and CapEx. Those processes benefit from digitalization. The passenger-facing airline-related processes still are very manual and work is needed there. Yeah, we see a lot of work with suppliers who are working with the, the ground operations on the apron to bring in digitalization, AI, and automation there.

Peter Bellew:Okay, any questions from the audience? I see a hand up down there. I don't know if we can get a microphone. He's just coming over towards you there. And I don't know if anybody— I haven't got any questions on Slido. So we've got a question here. I don't see anybody So, you got a microphone. Great.

Audience:Hi, good morning. Thank you for the discussion. Unfortunately, we're talking about working together, but that doesn't seem to be the case because the airline is the only entity that actually pays the price. In Europe, much more with 261, we're penalized all the time while everybody else is indemnified. And let me give you an example. We fly from Cyprus to Athens double daily. Athens decides to close the runway during the day, one of the two, for 2 weeks respectively, and I get 2-hour CTOTS. So I have my passengers in the aircraft and I have to explain to them that it's not my fault, it's the airport's. Why can't they do maintenance at night like Heathrow, for example? But that's just a speck. Eurocontrol, you know, we're fed up of hearing every year what things are going to be done, but every minute counts. We have to add one aircraft on the ground just to cover for Eurocontrol's delays because they haven't coordinated with the nations, and that's not my problem, should be their problem.

Peter Bellew:Yeah. Your question has almost been answered by the model that they've shown that they have in Dubai where they've managed to get— I shouldn't keep using the phrase, but that they have managed to get cooperation at the center. I witnessed that myself actually because I was quite surprised that the way it's quite fair, that the way it's shared out.

Paul Griffiths:I think the thing is, look, the first thing is you've got to understand exactly who the customer is in this. I think the problem is that airports think they're in the infrastructure business and they think that they're a law unto themselves. My approach has always been, having been on the airline side, that the investment that airlines are making in equipment and attracting customers and putting products in the air is very significant. They are the B2C part of the supply chain. And the airport should see itself as a key strategic partner. They're a B2B business providing services and infrastructure to the airlines. Therefore, my salary is paid by the airlines who are selling their product to the consumer. And therefore, if I do something which harms my customer base, I'm harming myself. And I think the thing is that, you know, Before we do anything major, I will go and consult, you know, with Tim Clark at Emirates and Gaithar Gaith at flydubai and all the other airlines to say, how can we do this in the way which minimizes disruption? I mean, for example, you know, being a 24/7 operation, maintaining runways is pretty tricky because you can't use a natural closure period. So we've found the period in the day where we can actually accommodate all of the demand on one single runway, and we will take one of the runways out of commission to do regular maintenance. That has proven to be the least disruptive way of doing it. I'm curious about the Athens example. Do they not close at night? Could they not do it at night? That sort of thing. It's a tricky problem, but quite honestly, I think some airports just decide, right, well, it's easiest and cheapest for us to do it this way, and they don't take into account the impact on the customer. Now, I don't want an angry Tim Clark on my phone, and let me tell you, that's a very uncomfortable place to be. So I make sure that we're in full consultation and we make decisions collectively and collaboratively to be the least disruptive to our customer base.

Peter Bellew:We're nearly out of time, so I'm going to ask for a 30-second answer. I'll give you the question and I'll answer my— what I think. What's the one innovative solution you think could deal with the ongoing supply and demand issues, you know, for the long term? And for me, actually, I think the biggest challenge the industry faces is a shortage of engine repair and management shops. I think that actually needs to be quadrupled. You know, I think there probably needs to be a huge place in Dubai, a huge place in Kenya, Ryanair are talking about building their own massive engine shop somewhere in Europe at the moment. So for me, that, that's actually the biggest blocker for the next 10 years because some of the engines are only lasting 20% as long as the old CFM56s used. And maybe Michael, from— what's the one thing you think in 30 seconds?

Michael Stanton-Geddes:I'm the airport guy, so we— and the problem I highlighted, setting aside the financing one and who shares the risk and where the risk profile is, Political creativity and commitment. That's an innovation that is desperately needed.

Peter Bellew:It plays into—

Michael Stanton-Geddes:it's not industry, it's not hard, hard bits, but it's what's missing. If we need to serve the projected demand with airport capacity in 20 years, we need to start building today.

Peter Bellew:And Paul?

Paul Griffiths:Imagination. We live in a technical age now where technology can far exceed any demands we placed It's the limits of human imagination to apply that technology that I think is the biggest barrier.

Peter Bellew:Diana?

Diana Siegel:That we work together to find solutions to reconnect all those communities that lost their service. We heard in the earlier panel so many more communities that look to get into air service and access to the system.

Peter Bellew:Predrag?

Predrag Vranjkovic:For me, like 2 previous speakers, I think those things, but from the perspective of air navigation, is thinking like a network, not thinking like an individual player, but like altogether.

Peter Bellew:Allan?

Allan Kilavuka:Michael, you know, you took mine. I was going to say that we need a lot more MROs around the world, a lot more throughput. But let me, because you took mine, I'll take the other one and I'll write on that point that my colleague mentioned. I think our ecosystem needs to take joint responsibility when it when it comes to non-fulfillment of our passenger demands. It cannot be that the airline is left to explain all the mishaps while, in fact, the responsibility lies elsewhere. We need to work together to help explain these mishaps, and it should not be penalized on us as OEMs. He gave a very good example. I have 10 other examples I can give. I'm today paying $2.5 million because of a mistake that was made by the OEM, and they don't want to take responsibility.

Peter Bellew:Thank you.

Allan Kilavuka:So we take all the cost, all the blame, and we don't take any of the credit.

Peter Bellew:So thank you very much. I really appreciate the panel. Fascinating discussion. I've run 2 hours— 2 minutes, 19 seconds over time. I apologize, Marco and Robert, and I can't see who's in the dark over there in the corner, but please show your appreciation for the panel on a very interesting discussion. Thank you very much.

Marco Naverra:Thank you very much, panel. Yes, a very interesting discussion indeed. We could probably do an entire event just based on that discussion, but I'm going to ask 2 very quick questions of my CAPA corner colleagues up here. Robert, I'm going to start with you from Gridpoint Consulting. What was one key thing that you'd want to take away from that panel and you want to highlight to our audience here?

Robert:Well, I think certainly any of the airlines in the world, In the room here today will be feeling very jealous that their airport doesn't operate the way that Dubai does. I think it's a real exemplar of how things should be done. It struck me, you know, the challenges that exist in different parts of the world are kind of quite different, you know, whether it's airspace challenges in one place or fragmentation of the infrastructure and the aviation industry in another. But I think the thing that came across very strongly was everyone had the same views on the solution set, which wasn't just about building more infrastructure, although that is clearly needed, but a lot about collaboration and working together and the power of technology nowadays to help facilitate that and drive innovation.

Marco Naverra:Do you think that's possible?

Robert:Yes. I mean, I mean, we've seen it, you know, airports that are very constrained on a certain dimension. Obviously, the UK airports I know the best. It's amazing how much growth has been squeezed through those fixed set of runways. Quite why they needed to— well, all that human ingenuity to squeeze out an extra movement from a runway rather than just build another one is a bit beyond me. Nevertheless, the power of human creativity to to, to work their way around the constraints and problems. I think this industry's always been good at that, and I think things like AI, um, you know, will help drive maybe another wave of that, um, uh, you know, collaboration and ingenuity.

Marco Naverra:All right, uh, Bob from AWS, uh, same sort of question. I mean, again, so many different things we could probably talk about and take away from that, but what struck you the most?

Bob:Yeah, I mean, great to get the different perspective across airport, airline, airspace management, airports, and aircraft provider. I guess same thing, you know, what really struck me, I guess, especially from the AWS perspective, is how technology has the potential to, to increase the capacity. It was really interesting what Michael said, you know, 20 years ago or 50 years ago, we thought the technology would already be there, and it's still kind of not there. We're not really seeing the automation that, that we, we would have imagined. And I loved what Paul said at the very end, you know, maybe what's holding us back is, is our imagination. Because, you know, we are at this inflection point of technology, and there's a lot more autonomous equipment, and there's things like agentic AI that allows airports to move towards more autonomous operations. So I think that with a little bit of imagination, we can use the, you know, new technologies like AI and automation to really increase the capacity and to resolve a lot of the issues that we're seeing, especially during peak demand and delays.

Marco Naverra:Absolutely. I think technology, AI, is already— it's been mentioned multiple times, and we've got a discussion this afternoon which is going to be specifically focused on that. But thank you both, gentlemen.

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