The end of the peak summer travel season in the northern hemisphere provides an opportunity to take stock of where we are as an industry.
We are coming off another record summer for air travel demand. In addition to the bread and butter business traveler, aircraft were full of those using their vacations to explore our planet, visit with friends and relatives, or perhaps just unwind on a beach somewhere. With over 20,000 unique city-pair connections on offer and over 100,000 flights per day, the options are practically unlimited.
That’s not to say that everything went perfectly. Some airlines struggled to operate their published schedules, owing to aircraft delivery delays related to engine issues, or engine problems in the installed fleets. Safety was not compromised; but efficiency and productivity were. In Europe, travelers were too often victimized by air traffic delays, because governments have not invested enough in infrastructure and because of air traffic controller job actions. And jet fuel prices remain stubbornly high, reducing the demand boost that might otherwise occur from lower airfares.
More troubling is the fact that air cargo growth is slowing. This partly is attributable to the end of the inventory restocking cycle. Manufacturing firms’ export order books in key markets of Europe, China and Japan are weakening. And currency turmoil is roiling some emerging-market economies.
On top of this we are seeing the beginnings of a global trade war. There is no immediate threat to 2018 being a profitable year. But even if the tariffs to date are focused on goods that do not typically move by air, there is good reason to be watchful.
Trade is key to globalization. And globalization has made the world a more prosperous place. Since 1990, 1.1 billion people have been lifted from poverty thanks to world trade. Expanding middle classes in China, India and elsewhere are a direct result of the creation of the global economy.
Aviation can be proud of the role we have played as an enabler for these phenomenal changes. Of course, trade is also an engine of growth for airlines.
But we need to be committed globalists not just for the opportunities that it creates for aviation. If isolationism wins the day, the world will take a broad step back economically.
We also need to recognize that globalization has left some behind and this helped to propel populist movements. There are no quick fixes to address this—least of all raising barriers to trade that hurt producers and consumers in both developed and emerging markets.
Trade wars, border restrictions, and the forces of protectionism do not look like they will leave newspaper headlines any time soon. That gives even greater purpose to the need for aviation to bear witness to the fact that society is undeniably richer (materially and socially) because of growing linkages between countries. The business of freedom must prevail. Trade wars only produce losers. That’s a message we must repeat at every opportunity.
Alexandre de Juniac: Director General and CEO, IATA