\u201cAirline margins are very tight, and the economics are even more challenging when it comes to regional connectivity.\u201d<\/p>\n
Iata\u2019s Asia-Pacific zone includes some big and densely populated markets.<\/p>\n
Then there is New Zealand, where regional routes have recently faced extreme strain, and there is no fully state-owned airline.<\/p>\n
This week, Air Chathams\u2019 decision to suspend Auckland-K\u0101piti Coast flights<\/a> led a local airline group to call for a national conversation about the connectivity the country expected.<\/p>\n \u201cAn airline isn\u2019t by definition a national infrastructure service provider, not in the same way that maybe you would argue, the postal services or something like that,\u201d Hee said at the Iata annual general meeting.<\/p>\n \u201cIt\u2019s not that airlines specifically need a handout, or they need some special support, but is there a business case for airlines to operate on a particular service? <\/p>\n \u201cIf there isn\u2019t, then airlines are acting very reasonably within their normal commercial decision-making framework by not operating. <\/p>\n \u201cBut if there is a national need to connect those communities, then that should be funded by the state.\u201d<\/p>\n Air New Zealand is 51% state-owned. Hee suggested for such a mixed-ownership model, subsidies were unlikely to get much support.<\/p>\n \u201cUnless it\u2019s a fully state-owned airline, I actually don\u2019t think that the ownership structure should play into that conversation at all.\u201d<\/p>\n But he did add that many countries regarded some bus or train services as essential to connectivity and supplied them with public funding.<\/p>\n Air New Zealand chief executive Nikhil Ravishankar and Qantas International & Freight chief executive Cam Wallace are among those at the Iata AGM.<\/p>\n Skills shortages<\/p>\n On skills shortages affecting pilots, engineers and air traffic controllers, Hee said a variety of solutions would be needed.<\/p>\n Some might seem to just involve old-fashioned marketing.<\/p>\n \u201cManpower in general, and skilled manpower, is a theme that the aviation industry will need to navigate over the years to come. Training is important, as is the role of ensuring that aviation is continued to be seen as an attractive career.\u201d<\/p>\n But he said airlines needed a variety of partners to build the \u201cpipeline\u201d from identifying shortages and ensuring training spots were available. <\/p>\n And while AI and robotics might often be seen as a threat to jobs in some sectors, Hee said they could help fill skills shortages in aviation.<\/p>\n He said new \u201cmega airports\u201d were coming to the Asia-Pacific, and airports were very manpower-intensive operations.<\/p>\n \u201cWe\u2019ve looked at different schemes, working with airport partners to try and encourage better use of biometrics, for example.\u201d<\/p>\n Those projects typically meant airlines had to work with regulators and other parts of the sector to make more efficient use of airport space.<\/p>\n \u201cThere are already airports working on things like robotic assistance in areas such as backhandling, in areas such as ramp work. <\/p>\n \u201cAll of these things could have incremental improvements in productivity and also reduce the strain from shortages in the short-term.\u201d<\/p>\n Jet fuel price<\/p>\n Hee said Asia-Pacific airlines had shown resilience in the face of surging jet fuel prices.<\/p>\n And he said the region was driving much of aviation\u2019s global growth, with annual passenger numbers expected to triple by 2025.<\/p>\n But speakers at the Iata summit so far have indicated that if the fuel price crisis led to consolidation, meaning some airlines folding, that would come as little surprise.<\/p>\n The Iata AGM continues this weekend.<\/p>\n It will be the last one for Willie Walsh as Iata director-general.<\/p>\n The former Aer Lingus and British Airways chief executive will take over as chief executive of India\u2019s IndiGo.<\/p>\n His successor at Iata is yet to be announced.<\/p>\n -The Herald travelled to Brazil courtesy of Iata and Latam Airlines.<\/p>\n