Fireside Chat With Paul Griffiths

Transcript

Peter Harbison:So as I say, thanks very much indeed. I don't think you need much introduction. Paul is a multi-talented, long-standing CEO of one of the most successful airports in the world, biggest international airport in the world, and also a man of many talents though, and a very creative thinker. We've always enjoyed having Paul on our sessions. He thinks outside the box, and we're going to do a bit of thinking outside the box today, I think. And certainly, if there are any suggestions from the audience as we go along— not that I can see anybody because the lights are so bright— but we'll take those as well. So what we're going to do— one of the areas that perhaps some of you are following and others not, but I think everybody has a mistaken attitude or belief that this isn't— this is science fiction. But we're going to talk a little bit about urban air mobility, which is basically little whirlybirds flying around in the city and a bit beyond there. And it's something which focuses very much also, of course, on the customer experience and making life easier for the interface, getting to the airport, through the airport, Out and the rest of it is always a bit of a pain, particularly on short-haul services. We were just talking about that. And these, these new aircraft, sometimes autonomous, are actually likely in the next 5 years, from what I understand, likely to start challenging some of the shorter-haul air services. So if you're hopping on a turboprop operation for 20 minutes or so, These are the sorts of services that in the very near future are going to be challenged probably by the new technology, the new imaginative creative ways of moving people around. So we're going to take this in 3 stages. First of all, we'll talk about moving around in the city itself because, I mean, Paul is, as I said, a man of many talents. He's not confined to thinking about airports. He's got a very broad scope of vision. So we'll look at— we'll talk about moving around in the city itself and what impact that has on the city and on the way you are mobile. Then from the airport to the city— from the city to the airport, how you— how this might change and perhaps in terms of a very connected experience. And then from the airport or from the city to another city. So with that said, Paul, um, I've had my little speak. Would you like to sort of give a few thoughts on this and anything else that sort of tickles your imagination in the area?

Paul Griffiths:Sure. Um, I think the first thing is we have to think very carefully about what we're really trying to achieve here with future mobility. I think the first thing is that air travel is clearly, because of its speed, something that is very relevant for long-distance travel. And I think there's plenty of examples now, particularly with the ability to harness new innovation and technologies over shorter distances, that there may be more effective ways of traveling over shorter distances. And there's been a lot of talk about maglev, British invention from the 19— '60s. There's a lot of talk about Hyperloop, yet untested in a public environment. And, and I think the thing is, the biggest inefficiency that we all suffer is not so much the mode of transport, but the cumbersome legacy interfaces between modes of transport. You know, what's the point of having a, a 40-minute journey by air between 2 city centers if it takes you an hour and a half to fight through the traffic to get from the airport to the city center, that sort of thing. And I think one advantage is that— one of the advantages that rail travel has had over air travel is the termini at each end of a rail journey are fairly compact and can be conveniently located close to centers of population because the environmental and noise impact is obviously much less than an airport. And over shorter distances, I think over the next few decades, we'll start to see a lot of migration of short-haul travel away from air-based service to some form of ground-based service. So I think that there will be a polarization of technology based on the elapsed journey time. And the second point is autonomous travel versus Organized mass transit. And I think here there are, there are 2 things sort of fighting with each other. The first thing is obviously mass transit tends to work where you've got large numbers of people that want to get from defined point A to defined point B. The difficulty, of course, is when you've got many-to-many, where you've got lots of individual journeys where people want to start from different points and end up in all sorts of different points. And if you look at the way we overcome that at the moment by road-based transport, by individual cars and use of taxis, etc., it's hard to imagine a less efficient and more wasteful use of resource to accomplish that. And much as though many of us here, myself included, love those personal statements that arise from having a branded shiny vehicle sitting outside our houses. Some of the most astonishing economic statistics I read recently from the US about how many trillions of dollars are tied up in personal ownership of vehicles, and that's not counting Jay Leno's garage, of course, which probably adds another trillion on its own. But also, if you think about the utilization, how much time we actually spend using that pretty expensive personal asset, it's shockingly wasteful.

Peter Harbison:And is there an average time, sort of global average? What is it, probably an hour a day max?

Paul Griffiths:I reckon it's 10 to 15% of the time. Yeah. And whilst we as a species still need to sleep, it will never be more than, you know, sort of 40%. I think in the current generation and future generations will look back on us and think, do you remember when a substantial amount of your personal wealth was tied up in personal mobility? Now, of course, you know, we just press a button on our device and a small bubble arrives. We step in the bubble and it knows where we want to go and we get charged for use. That's why I think Uber has been such an incredible transformation because just like low-cost airlines, it's— Uber is not about a piece of clever technology that's automating taxi bookings. It's the network efficiency that it can drive through the interactive route planning—

Peter Harbison:Mm-hmm.

Paul Griffiths:That's possible by mobilizing all of those individual assets of personal transportation into a network which can then be far more effectively used as a commodity for many people to join in. So that concept of going from personal ownership to shared ownership and actually bypassing that into a pay-as-you-go model is much, much more efficient way of getting personal transportation organized. So, I think long-distance air travel and what may succeed air travel, which I think the next technological leap has got to be, to find an energy-efficient way of escaping the Earth's atmosphere, which is holding us back at the moment. You know, it's incredibly expensive to go faster in the air, which is why most aircraft now are slower than they were in the past. And I'm not just talking I mean, we're talking about Concorde, you know, the latest generation of twin-engine airliners is actually slower than the 4-engined aircraft that preceded them. So there are a number of opportunities, I think, to use new technology in a different way, and it's the application of that new technology that, to me, presents the most exciting opportunities. And as far as airports and aviation is concerned, Biggest challenge, I think, is how do we eliminate all the inefficiency that exists currently in that modal translation between ground and air? And I think it's incredibly inefficient at the moment, and I'd like to see a transformation because as airports expand, you know, you've got longer walking distances, you've got more congestion, you are forcing Thousands of people a day to go through a central process, not because of the convenience of the passenger or the airline, but for the convenience of the airport operator that finds it more economic to put those services in one place. So if we could disaggregate that and use this concept of personal mobility, so as soon as you step into your bubble in the suburb in which you live, that—

Peter Harbison:Mm-hmm.

Paul Griffiths:conveyance will know exactly what aircraft you're going on, which gate that aircraft is parked, and hopefully by dealing with all the baggage and the immigration and check-in processes in the background, we could end up with those personal mobility pods taking you direct to your aeroplane. So I think the future for airports will look a lot different to the way it looks at the moment. And actually, if you think about it, if you could do that, you don't need You don't need vast check-in halls. You don't need vast baggage systems because those personal mobility pods will do the job of the baggage system. And I'm sure that's going to be a much better customer convenience, and delivering people directly to the aeroplane will cut journey times and make it a much more pleasurable experience. Because, you know, I think the thing is the, the scale of travel has taken a lot of the convenience of of it away because we are forced into waiting modes in such a lot of the journey. And I think they're unnecessary and modern technology will remove the need for them even faster than we think.

Peter Harbison:I want to ask what that might do for your airport retail sales. But let's just go back. I mean, Dubai is well ahead, I think, of most cities in the world. Just when you talk about your pods, How far along are we in terms of that sort of mobility in the city? I mean, what, what's involved in it? Are we 5 years away or is it 15 years away?

Paul Griffiths:I think the thing is the— there are a number of companies around the world that have the technology. I think what they're all looking for is, is 2 different things. First, a good commercial application for them, and anyone using Heathrow Terminal 5 car parks will know there is a pod-based transit system between the car park and the terminals. I think the other thing is that they need, they need some scalability. You've got to get them to a point where they're a serious capacity provider for an airport, because obviously the number of passengers needed per hour is quite significant. So if you're aggregating all of those journeys, into individual journeys, then you'll need the scalability and the complexity of it. Third thing, of course, is new technology needs to go through a certification process. I mean, my old boss Richard Branson came to see me not long ago when he was very interested in getting Virgin Hyperloop off the ground and wanted some cash to put into it. And I said, well, look, really, I think as an airport, we've got to remain technology agnostic.

Peter Harbison:Right.

Paul Griffiths:We've got to wait for the technology to emerge with an operating certificate that we can seriously deploy. I don't think being an early adopter in this space is perhaps the best way forward. I think when there is a proposition of some form of personal mobility or even faster rapid transit on the ground, once that is certified for public use, Then airports like Dubai can start to take quite seriously that proposition. We've already defined the need and we are working with a number of manufacturers to come up with some propositions. I think that if that can be encapsulated in an airport planning master plan, which actually can be mobilized and paid for by the savings in infrastructure, Because you don't have to build all these vast palaces because the technology's changed, then I'd rather put the money into improving the technology of bringing people to and from the airport than I would in building a massive baggage hall and a massive check-in area just to, you know, heap more and more misery upon the traveling public.

Peter Harbison:So that's really what you try to do, is it? Now the secret comes out. But so you're talking mostly though about surface, are you? And when do we get into the air? I mean, how far is that away? You've got— you've had, I know, remote autonomous air taxis in Dubai.

Paul Griffiths:Well, they're experimental. The thing is, you see, there's a lot of— I think technology falls into 2 different camps. There's the application of technology, which to me is where the value generation It really is. And then there's the, we're doing something new and different, which is the innovation elements of it. And unfortunately, a lot of that innovation element stops at the PR stage.

Peter Harbison:Mm-hmm.

Paul Griffiths:And I think the idea of flying autonomous taxis, I don't know. I, I, I think it— there are significant downsides. I mean, the personal safety, I think that that if you're worried about the safety of autonomous vehicles on the ground, we should be even more worried about autonomous vehicles in the air. And I think that technology, again, needs to be proven by a proper certification process before it's fit for public consumption, if you think. So I think— and again, how much will it genuinely save? What is the range within which that type of service could be offered? You know, if we're relying on— the difficulty with any form of aviation is you have to take your fuel with you.

Peter Harbison:Mm-hmm.

Paul Griffiths:And obviously, in the case of batteries or, or actually kerosene or whatever it is, it's, it's quite heavy. And sustainable sources of fuel when they're airborne are still going to present a problem. So we need some form of safe technical breakthrough to facilitate that. And I don't know, I don't know how comfortable anyone would feel if they were relying on, you know, some propellers spinning above them powered by a lithium-ion battery that unfortunately perhaps there might have been a break in the cable when they were charging it up, and you never know. But some So I think personal mobility by the air, if you look at all the controversy that there's been about personal drones and imagine that being applied to personal mobility, you know, there's, there's a few non-technical challenges to be overcome before I think we'll see that as a widespread proposition.

Peter Harbison:Yeah, from the regulatory side in terms of air traffic control, that seems to be something that the authorities are pretty well on to in terms of Being able to devise separation because you've got— you don't have silly humans in control of these things. They're, they're totally controllable.

Paul Griffiths:And I think, you know, it's back to the idea of creating a network. And if each of these vehicles is in touch with all the other vehicles, the ability to self-separate, I'm sure, would have to be the way. And you could geofence certain corridors, I think, you know, like they do with general aviation in the US, you know, anything At 1,000 feet is sort of self-separating, and I think that's where the technology really needs to end up. I think the thing is about driverless cars on the ground, we will get there, and I think what we're seeing is the resistance is really more about the resistance to change than it is the resistance to technology because why is a driverless car any different to a railway journey? Because, you know, you've got trains that are driverless that have been running around various systems around the world for some decades now. The difference there is the segregation between railway tracks and roads. You know, railway tracks are known to be segregated and are dangerous places for people to, to go if they're on foot. Roads are all about common use between pedestrians, and the separation's maintained by the the human brain, you know. But I think the thing is the technology is, is there and we should trust it more. I think Waymo, the Google self-driving cars, are now more safe than having a human behind the wheel. They now are saying that you're more likely to be involved in an accident with, with someone driving a car than you are if Waymo's in control.

Peter Harbison:They don't get drunk either, do they?

Paul Griffiths:Absolutely right, yes.

Peter Harbison:So, okay, so I mean, you're— I was talking to somebody last week who's part of a very large company who's developing the technology in this area. And of course, as you say, the PR machine is probably a bit out in front of the front bumper. But, and he was envisaging pods or modules or whatever that where you don't have schedules, you just have these things—

Paul Griffiths:Demand-based.

Peter Harbison:Coming along demand-based. And if they're 3 or 4 people, It gives you much, much more convenience. So I mean, the, the time saving— we were looking before, weren't we, at the Shinkansen, the, the, the hundreds of millions of hours that are saved by, and the economic flow-on of just not inconveniencing people, having them stuck in traffic or whatever for, for hours and hours. So there is a sort of— I was gonna say corporate, but it's more a What's the word I want? The civic need to, to have these savings, isn't there? Because there's an environmental impact, that issue that comes in from the side. If you can create obviously much more efficient lithium or whatever batteries as we go through, that's, that's the cutting-edge technology that's needed. You're going to find that the, the invading forces of environmentalists and, and the The, the, the higher cost of having these things is actually going to meet at a certain stage and make them viable. How far out is that?

Paul Griffiths:Well, I think that's the big concern I have about air travel. Unless we find a fully sustainable alternative to hydrocarbon fuel for air travel, I think there's going to be some issues because the Airbus decision that the A380 is no longer the way forward suggests that the units of capacity will be slightly smaller. That means the burden of responsibility on the supply chain to provide more slots and more airport capacity will intensify. And the difficulty with that, of course, is more airport capacity means more airports and more runways. And I don't think that we're living in an age where environmentally, economically, and politically—

Peter Harbison:Yes.

Paul Griffiths:creating more and more airports in any democratic environment is going to be an easy thing.

Peter Harbison:Mm-hmm.

Paul Griffiths:And I'm not sure that that's actually necessarily a bad thing, because if you think about it, in a lot of parts of the world, it's not the lack of airport capacity overall, it's the lack of airport capacity that people judge to be in the right place. I mean, if you look at the London airport system, for example, where you've got You know, Luton, Gatwick, Heathrow, Stansted, Biggin Hill, London City, you know, and I think London Oxford, they like to call themselves as well. I don't know how far you can get from a city center before you have to drop the name of the city. I think Ryanair have got some statistics on that. And—

Peter Harbison:They certainly tested the margins.

Paul Griffiths:Indeed, absolutely right. But the thing is, you see, that this is where I think ground-based transportation plays a major part because if you can bring airports that are further out of city centers into an integrated transport system and you can cut journey times, you could then use regional airports far more effectively. I mean, it was interesting how another UK example, Birmingham, the proposals there to build the new high-speed rail link to Birmingham, which I think would take something like 20 to 40 minutes off the journey time to London. Will that make Birmingham another satellite airport for, for London and other regional centers, you know? And ultimately, if the answer is yes, then they'll have to build another runway at Birmingham. That's the problem. So I think the efficiency of the ground-air interface, which we were talking about right at the beginning, has to be the way forward, not just for ground-based transportation, but for airports and airlines as well. And, you know, as we were talking about Shinkansen earlier, just having flown in from Tokyo and having used it for the first time, you know, you've got 16 cars between Tokyo and Osaka per train, 10-minute service intervals, you know, something like 1,200 to 1,300 seats per train. And now, surprisingly, the Shinkansen has got 80% of the travel market between Tokyo and Osaka. So there's a very, very good example of how an alternative to air travel— and of course, I think we all remember, don't we, that the highest density 747s were always deployed on domestic routes in Japan.

Peter Harbison:Mm-hmm.

Paul Griffiths:606 economy seats. I remember traveling on a JAL 747-300 a few years ago. And for that to be replaced by another mode of transport in a very short space of time is pretty impressive. Same's happening in China, and I think you've got upwards of close to 500 million people traveling annually on high-speed rail in China.

Peter Harbison:Mm-hmm.

Paul Griffiths:Compared to 350 million in Japan. So, you know, the numbers are amazing. And when you've got distances like London-Manchester now, which are just under 2 hours by train, why would you think of an air journey with all the inefficiency of airports at each end when you can be city center to city center in actually less time?

Peter Harbison:Probably ironically because it's much cheaper.

Paul Griffiths:That's right, yeah, but that, that shouldn't be the case. It should not be the case.

Peter Harbison:It's about competition though, isn't it?

Paul Griffiths:It is about competition, but when you've got rail, when you've got the capacity of rail, being so efficient in the huge units of capacity you can carry on a single train, why should— why should— and, you know, we talked a lot in the past about the sustainability of air travel and the return to shareholders and return on cost of capital. If you actually stack those 2 things together and added the environmental impacts, I just wonder whether one of the problems is that rail not being seen in some countries as a strategic part of the national infrastructure. I mean, in France, it's a strategic part of the national infrastructure. The ability to construct high-speed rail in France is so much easier than it is in the UK. I think the UK has a much lower, or if any, subsidy available to the rail industry compared to a lot of other countries.

Peter Harbison:Yes.

Paul Griffiths:You know, yeah, I think governments perhaps have a role to play here in trying to incentivize more sustainable forms of travel, and maybe railway infrastructure and its improvement and update could be one of those, one of those areas for, for debate and exploration.

Peter Harbison:Okay, anybody, um, got any observations, questions? Anybody know much in this area of urban air mobility? Got any thoughts on what Paul's been saying? And then one of the issues I'm sure a lot of you have heard about too is the EU, the European Union, is— the Commission is talking about terminating the prospect of flying from Paris to Brussels, or what was the other route? So one or two other very short-haul routes anyway, just actually banning it for environmental reasons. I think that's a very good idea. That's a good sort of European Commission approach to things.

Paul Griffiths:That big stick approach, I really don't think is an acceptable consumer proposition. It's much better, surely, to allow organizations, whether they have any form of public ownership or private ownership, to create a better service and allow the consumer to make the choice. I mean, that Paris-Brussels is a very good example where Air France KLM have stopped Paris-Brussels flights because the Thalys service between Paris and Brussels is so efficient and so quick now. And of course, the sustainability element of it is very important as well because it's very easy to power a surface-based transportation medium from a sustainable source. When you're using the energy to stay aloft, it's very different and more difficult.

Peter Harbison:Right. Well, we've strayed a bit from the, the intra-city whirlybirds flying around that I'd envisioned in 5 years' time. You're probably a bit less sanguine about the prospect of that, 2030 beyond.

Paul Griffiths:Well, I think, I think the thing is that when you look far into the future, I think the technologies we're using today will seem fairly archaic. You know, and I, I wonder whether that idea of personal mobility will be more applicable to faster journeys on the ground than it will personal mobility in the air. And I think really the, the journeys in the air will, will, will be a lot faster. I think we need to find an energy source that enables us to get out of the Earth's atmosphere. Remember Ronald Reagan, I think in 1985, promised the development of an Orient Express Express in his inauguration speech that would, I think, what was it, Chicago or New York to Tokyo in 2.5 hours, something like that. We're still waiting for that. Aircraft are getting slower, not faster. That's the irony of the situation, despite the technology being fascinating and probably available at some stage.

Peter Harbison:Well, where Reagan failed, I'm sure Mr. Trump can do it.

Paul Griffiths:He'll certainly promise it, that's for sure.

Peter Harbison:Paul, thanks very much for a very engaging discussion. And yeah, I mean, lots of, lots of thoughts there. I mean, I think the important thing is that we're trying to push the boundaries. You're looking to push the boundaries. Not accepting the current situation is a really critical part of this. Let's disrupt things.

Paul Griffiths:Absolutely right.

Peter Harbison:Great.

Paul Griffiths:Couldn't agree more.

Peter Harbison:Thank you very much.

Paul Griffiths:Thanks very much, Peter. Thank you.

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