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tv   Talking Business  BBCNEWS  June 22, 2024 11:30am-12:01pm BST

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today marks the sixth national windrush day, which was established to honour the british caribbean community and commemorate the arrival of hmt empire windrush. 150 compensation claims submitted by people affected by the windrush scandal have been awaiting a final decision for at least a year. now on bbc news — talking business. hello, everybody, welcome to talking business weekly with me, aaron heslehurst. let's go and take a look at what's on the show. people want to fly, and they need to fly. you know, they need to connect for business. they need to connect to meet their family, and they want to travel and experience other parts of the world. up, up, and away! yep, the global airline industry — it is soaring to new heights, as millions of us look to take
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to the skies for a summer getaway. record numbers of passengers — they're predicted to fly this year, with airlines raking in healthy profits and airports fit to bursting. but against a backdrop of war, economic uncertainty, and the year for global elections, can it continue? and, with our climate in crisis, can any of it be done sustainably? i'm going to be discussing all of that and more — here they are — with a host of experts for our bumper aviation special. also, i'm catching up with one of the longest—serving airline leaders, the industry heavyweight — yep, the big boss of emirates airline, sir tim clark. wherever you'rejoining me from around the world, once again, a big hello and a warm welcome to the show. now, for many of us, it's that time of the year where we're checking our passports, getting our bags out of the cupboards, and dusting off our shades as we prepare for a summer getaway, jumping on a plane in search
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of the summer heat — or trying to escape it. the airline industry is now officially back on track, after the dark days of the pandemic. and i tell you what, their outlook is very bullish. a record high of nearly five billion travellers are predicted to take to the skies this year, with the world's airlines expected to post over $30 billion in profits on the back of it. and that increase in demand, it's projected to continue — with passenger numbers heading in one direction — and that's up — with around eight billion expected to take to the skies by 2043. good news for the airlines, but it is raising concerns over its potential environmental impact. aviation is currently responsible for around 2—3% of total global carbon emissions, which is significant on a per—head basis, as it's one of the most climate—intensive forms of transport. so, in answer to this, the airline industry has committed to a net zero carbon target by 2050. and the most significant current
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tool in the box to reach that is the use of so—called sustainable aviation fuel known as saf. that's jet fuel made from sustainable sources such as agricultural waste. currently, there are major hurdles over its availability, but significant progress is being made in its potential. and in fact, last year, we saw the first transatlantic flight by a large passengerjet powered only by those alternative fuels flying from london to new york. ok, so let's get stuck into all of this — and where better to start than with the voice for the airline industry? so, i caught up with the big boss of the international air transport association — of course, known as iata. willie walsh, fabulous to see you as always. and, willie, let me start with this, because on the show, i've just outlined some of the huge passenger numbers and predictions from you, from iata. so, let me start with that, willie — what do you see behind these phenomenal numbers, and where are the biggest areas of growth?
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where are they coming from? well, it's great to see the industry back now in growth above where we were in 2019. it's taken a long time to get back. and, you know, still a number of challenges facing the industry, but demand's actually quite strong right across the world. i think if you look at the asia pacific region, where it was slower to reopen, it is now gathering pace. but still some restrictions in place, you know, traffic between china and the us is still only at around 20% of where it was back in 2019. so, i think there's still scope for growth, but the growth really is pretty much everywhere globally. but, willie, i mean, do you think these phenomenal passenger numbers are sustainable given — well, given what travellers all say are hugely increased airfares since pre—pandemic? everybody has suffered from inflation. you know, it's not unique to the airline industry. and in fact, when we look at fares back in 2019 and today, they're just about keeping
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pace with inflation. so, yes, ticket prices are higher than they were, but it doesn't appear to be impacting on demand. and i think it proves what we said right through that period of the pandemic, that people want to fly, and they need to fly, you know, they need to connect for business, they need to connect to meet their family, and they want to travel and experience other parts of the world. so, it's good to see where it is. willie, are these airfares now the new norm? because i know you and others have said that the airlines, they have to fund this greener transition, well, somehow. yeah, i think that's a great question, aaron. you know, if you look at the profitability that we're forecasting for the industry this year, in margin terms — and i think it is important to look at it in terms of net margin — we're forecasting just over 3%, 3.1%. so, a very, very thin margin for an industry that's as important as aviation. and, if you consider the long—term outlook and the transition to net zero, you know, we know that sustainable aviation fuel is very expensive compared to traditional fuel. it can be anything up
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to six times the price. and that's going to have to be paid by somebody, and, given the margins that the industry traditionally operates with, you know, i don't think there's any way you can avoid the reality of higherfares. i think this is where politicians need to be honest, you know, i think some people have tried to portray this view that it won't cost us anything to transition to net zero. it will be challenging and it will be expensive, and ultimately, consumers will have to pay more. well, on that note, willie walsh, the big boss of iata, is the industry, all of your members, and the confidence in boeing? i members, and the confidence in boeina ? ~ , members, and the confidence in boeinu? ~' , , boeing? i think they consent given the problems _ boeing? i think they consent given the problems that _ boeing? i think they consent given the problems that we _ boeing? i think they consent given the problems that we face - boeing? i think they consent given the problems that we face in - boeing? i think they consent given the problems that we face in the i the problems that we face in the speed at which progress has been made. they are cautious about the future. we want to see greater certainty around what boeing will do. personally, iam confident certainty around what boeing will do. personally, i am confident that they will address it. i see clear
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determination on their part to put behind them, all of these issues. i think they know what the problems are, solving those problems will require some work. but it's not impossible to do. itjust requires the right focus, attitude and culture, and i think boeing is on the rightjourney at culture, and i think boeing is on the right journey at the culture, and i think boeing is on the rightjourney at the moment. but we need, as an industry, to see a strong boeing, and we will work with them to get them to where they need to be because we can't have an industry that is almost totally dependent on one manufacturer. we need competition and boeing will pay apart in the future. always great to have you on the show. thanks forjoining us, willie, and i'll talk to you soon. thanks, aaron. ok, so that's the overview for the whole industry, and, of course, the problems of reaching climate targets. but how are the airlines themselves dealing with all of this? well, to find out, i also caught up
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with the boss of sustainability at the world's biggest carrier, united airlines. lauren riley, great to have you on the show. and, lauren, let me start with this, because united airlines — the biggest airline in the world, your home market, north america, the biggest aviation market in the world — and, lauren, this phenomenal demand to fly, five billion expected this year. i mean, the industry's growing at great speeds, so i guess it does beg the question, how can all of this be done sustainably? well, it's great to be here, and it's really wonderful to talk about this subject in particular. you know, at united, we are very passionate about connecting the world and enjoying all the beauties of the planet. and our commitment, though, is to make sure that we do it responsibly and sustainably. you know, as we grow, as we rebound from a historic pandemic and we go back to normal flying, and hopefully continue to grow as an industry, we have a worldwide commitment across the industry to really develop sustainable aviation paths forward. and that's going to require a whole host of solutions, from sustainable aviation fuels
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to new fleet, to new technologies, all the way through electric and hydrogen, and beyond. and, as an industry, we're looking at all of those solutions. 0k, lauren, so the vast majority of the carbon footprint comes from burning fossil fuel. but we know sustainable aviation fuel — saf — it's been touted as the, well, as the ready—to—run option. but just for the uninitiated, lauren, can you just explain to us what it is, and how saf saves on emissions? you know, sustainable aviation fuels are pretty remarkable. so, just to give you some context, for united airlines, 98% of the emissions that we put into the atmosphere are from combusting jet fuel. so, when you think about moving towards sustainable flight, what we're really talking about is finding a way to either use less fuel, so we create less emissions, or replace the fuel with sustainable alternatives. and that's where sustainable aviation fuels comes in, saf. saf is chemically identical
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to conventionaljet fuel, exactly the same, but it's derived from waste or renewable feedstocks. and it uses renewable power, a little bit of carbon capture, and all of these great new technologies to produce a jet fuel that today has up to 85% less emissions on a life cycle basis. and the challenge is that we simply don't have enough production coming online yet. and what do i mean by that? let me give you a couple of numbers. last year, worldwide, about 150 million gallons of saf were produced — which sounds like a lot, and it's a massive progress over the previous years. but united alone, as a single airline, uses four—and—a—quarter billion gallons of jet fuel. and that's just one airline. but why, lauren? i mean, such a huge industry with such huge demand, why are they not ramping this up? all of these technologies are very nascent. they're very early—stage. and so, we're essentially in the business of creating a marketplace for alternative fuels. so, that's why we're working very hard with policy—makers
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here in the united states, across europe, and in geographies everywhere, so that we can help kick—start the marketplace through incentives, through mandates, with policies that enable us to scale sustainable aviation fuel, so that we can have a robust marketplace. well, on that point, lauren riley, chief sustainability 0fficer at united airlines, great to have you on the show, good luck with everything. i'll talk to you soon. thank you. right, so we've heard from a major airline — but what about the airports? how are they gearing up for all of this new traffic sustainably? well, to find out, i spoke to the big boss of one of the world's newest megahubs, the ceo of iga istanbul airport. selahattin bilgen, great to have you on the show. and, selahattin, let me start with this, because on this week's show, we're looking at this phenomenal demand for air travel that continues to rise. and this year, 2024, you, istanbulairport, a major global hub, you're expecting your passenger numbers to hit 85 million.
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now, if you do that, you'll become number one in europe, the biggest airport in europe, taking the top spot from london's heathrow. so, i guess the question is, how do you do that? are you ready? thank you, aaron, it's very good — nice to see you again. actually, we've been quite prepared for this, and the project has been expecting a large scale of growth from its initial start. and maybe, you know, we've been the number one airport in europe for the fourth consecutive year now, with respect to the air traffic movements. and now, this year, with this growth in airtraffic numbers, the passenger number will follow, as well. istanbul airport broke the record for daily passenger numbers last year injuly. we are quite prepared to be the number one in europe,
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and we are looking forward to be number one in the world, as well. we've also been looking, selahattin, at the sustainability push by the aviation industry to improve its carbon footprint. and we know the new istanbul airport, you fly the flag as one of the world's most sustainable airports. so, just briefly, can you highlight a few of the reasons why you're such a sustainable airport? we are a pretty new airport. we had the chance to design and build the airport with the latest state—of—the—art technology. building the latest airport has given us the advantage. but at the same time, our mentality has always been to be a sustainable airport from the beginning, as well. although we are young airports, we were able to go to level four an
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accreditation, only three years. just to mention a few numbers, last year our traffic was 19% growth, but we were able to decrease our energy consumption nearly 11%. we recycled more than 30% of our water from our roof. we were able to decrease our water footprint by 5%. currently we are investing in a solar power plants which will be able to provide electricity for the whole airport ecosystem from renewable sources. our airport has its own seaports, so 0ur airport has its own seaports, so we are able to connect our airport for yourfarm from the we are able to connect our airport for your farm from the port placed in any part of the world.
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well, on that point, selahattin bilgen, the big boss of iga istanbul airport, fabulous to have you on the show. good luck with everything, and we'll talk to you soon. thank you so much, aaron. see you in istanbul. ok, so there you go, that's istanbul airport, the home of turkish airlines which, along with united airlines and 2a others, is part of the world's largest airline, club star alliance. spanning the globe, the network offers a unique view of the industry. so, i decided to sit down with the big boss of star alliance. theo panagiotoulias, a real pleasure having you on the show, my friend. and let's start with this, theo. we're looking at bumper passenger numbers this year predicted, five billion to take to the skies. i mean, it's incredible. and i'm just wondering, how are your members seeing things? and i guess, importantly, how does star alliance help them to... well, how do you help them to meet this demand? well, thanks for having me, aaron. yeah, demand is really robust. the market is staying up, really resilient. we're coming into a very bumper summer this year, which is great after all the challenges we experienced in the past.
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what is our role? 0ur role is to make sure that we look at the problems along the customerjourney, and deliver upon customer experience enhancements across those journeys. and that's across all your members, right, the 26 members? across all our members. yeah, yeah, we focus on solutions, especially through technology. when you think about the booking experience, the customer experience, the connection experience, the loyalty experience — along that pathway, we look for problems, and we look through technology to make it more seamless for customers. but as the alliance, some will say, "isn't that the actual airline's role?" so, where does that balance, where you want to make it seamless, but also, the airline has a say in all of that? yeah, so the solutions we provide to the airlines are things that those airlines can't otherwise do on their own. right. so, i'll give you a really quick example. when you look at — we offer bag tracking now across multiple airlines. the various member carriers cannot
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do that unless they try and do it with all 26 members. they use us, star alliance, as the conduit, and they connect into us, and it allows us to fulfil that for them across the entire membership. how much is the capacity of airports around the world an issue for this growing demand? i think it's always an ongoing issue, and you've got different geographies tackling this at a much early stage. 0ther geographies are playing catch—up. but this is a very important issue, and the way to deal with it is to be making sure there is ongoing dialogue and understanding the repercussions and consequences, if you don't have thoughtful planning to anticipate and capitalise upon that demand, which continues to grow. you and i sitting right here in london. how important is london heathrow airport to star alliance? it's huge, it's crucialfor us. it's the one markets that we have 23 of
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our 26 member serving, so it's the busiest market globally. alliance. we have 20% of the same... star we have 2096 of the same... star alliance has _ we have 2096 of the same... star alliance has 2096 _ we have 2096 of the same... star alliance has 2096 of _ we have 2096 of the same... star alliance has 2096 of all _ we have 20% of the same... star alliance has 20% of all seats going out of london? it’s alliance has 2096 of all seats going out of london?— out of london? it's quite significant. _ out of london? it's quite significant. it's _ out of london? it's quite | significant. it's important out of london? it's quite i significant. it's important to out of london? it's quite - significant. it's important to have a competitive alternative to local markets, carries. most importantly, if we go back to what i was referring to it before, one of the main reasons why it's been a huge success for us over the last decade has been that focus on customer experience and multiple touch points. with gutter connection centre here that assists customers when they miss connection. we have goal tracker for customers going through, and we have all these other customer experience infrastructure that we've invested into, and something we are very proud of. it's
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all about the customer, as i touched on the outset, that differentiation exists, and we look forward to a very ten successful years at heathrow. very ten successful years at heathrow— very ten successful years at heathrow. ., , ., ., heathrow. the airport is not without its critics. it's _ heathrow. the airport is not without its critics. it's an _ heathrow. the airport is not without its critics. it's an that _ heathrow. the airport is not without its critics. it's an that charges - its critics. it's an that charges very high fees to your members to land, take off and use the airport. we've got alongside of expansion plans, all of that surely can't be that helpful to your members? 0bviously that helpful to your members? obviously it's challenging, but were also in pretty constructive conversations with heathrow about concerns we have raised. d0 conversations with heathrow about concerns we have raised.— concerns we have raised. do they listen to you? — concerns we have raised. do they listen to you? i _ concerns we have raised. do they listen to you? i hope _ concerns we have raised. do they listen to you? i hope so. - concerns we have raised. do they listen to you? i hope so. i - concerns we have raised. do they listen to you? i hope so. i think l listen to you? i hope so. i think they recognise _ listen to you? i hope so. i think they recognise the _ listen to you? i hope so. i think they recognise the success - listen to you? i hope so. i think they recognise the success of. listen to you? i hope so. i think| they recognise the success of all star alliance carries under one roof at heathrow, and all the benefits that comes with that from the customer experience perspective. let's talk about boeing. of course, you know, constantly making the headlines for all the wrong reasons.
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there's still safety concerns, boeing not delivering your members the planes that it needs. i'm just wondering what you are hearing from your 26 member airlines? i mean, do they have confidence in boeing? what i can tell you, from our 26 members, is that safety is paramount. everything else is a moot point unless you get that right. and i think you'll find that all our members have made that point, and communicated that point very clearly to all aircraft manufacturers. and so, i think, from that point of view, we leave it to them to resolve. but i think, from a membership perspective, that's been made very clear. well, on that point — and as a fellow aussie — theo, mate, a real pleasure having you on the show. good luck with everything. thank you, aaron, i appreciate it. talk to you soon, thanks, mate. the airline industry has come a long way since covid. 0ne airline at the head of thatjourney is emirates. recently reporting record incoming
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profits, is one of the largest international carriers. to find out why and take the temperature of all things flying i decided to catch up with one of aviation industry's leading figures, the president of emirates airline. sir tim clark, always a pleasure having you on the show. and, tim, let me start with this. i mean, the world is in an interesting place right now, to say the least. i mean, nothing new for your industry, which always deals very well, really, with one crisis after another. but there's a lot up in the air at the moment, tim. i mean, a huge yearfor elections, a lot of uncertainty and financial pressures — and yet, the bums on airline seats continues to be phenomenal. the airline industry at the moment is very strong. so, i've got to ask you, tim, what do you think is behind all of this? well, you probably hit the nail on the head when you said there's a lot of geopolitical, political uncertainty at the moment. people are facing multiple elections in europe and the us, of course, as we know. it's a troubled planet, and i think people are just getting on aeroplanes to go
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and enjoy themselves. it's probably a little bit of a facetious answer to it, but, you know, the people that are travelling on leisure, visiting friends and relatives, occupying our premium cabins, as well as the other cabins, has been quite a surprise to all of us, including — notjust emirates, but the whole industry. and, tim, there's been a lot of talk post—pandemic about the higher airfares. so, i guess the question is, tim, are there much higher airfares that you're all charging? are they sustainable? there is currently a strong level of demand, as you mentioned. supply is not back to where it used to be, in many areas of the world. so, i think that's having an upward pressure on prices. but, you know, the economies are not exactly stagnant. the global economy is continuing to move despite everything that's going on. and, you know, traditionally when you get major election periods in the western 0ecd economies,
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you tend to see a slow—down in demand. well, the reverse seems to be happening. the more froth there is on the political side of things in europe and america, the more people are travelling. so, this is a new one to all of us, and, you know, we are trying to adjust our capacity as best we can in emirates. but what are the hold—ups, i mean, your hurdles for emirates' continued growth story? although i think i know the answer, right? it's the plane—makers boeing and airbus. and, i mean, let's be frank — you can't get your hands on new planes fast enough, can you? no, we should've had the 777—9, the latest 777 lookalike should have been delivered to us in april 2020. now, if we get it by april 26th, i'll be quite surprised. now, how do we deal with that? the short term, we are retaining
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a lot of the old aircraft, completely refurbishing them in the first stage. and then, the second stage will be to knock them all out completely in the cabins, and rebuild the cabins with a brand—new range of products. but, tim, i mean, you have hundreds of new planes on order, and we all know that boeing keeps making the headlines for all the wrong reasons. airbus have big delays. if they're not delivered, the planes are not delivered to you on time, that is surely going to have a huge impact on your future strategies. of course it does. the order books for boeing are colossal. single aisle and wide body. so, the biggest single problem, once they crack the quality control issues, the safety issues, and all the systems and process issues that need to be brought into play in the factories, they've then got to scale production back to where it was prior to covid. and, of course, that is probably the most herculean task they've got in front of them, to meet the order requirements
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of the contracts that already are signed. and on top of that, there are lots of carriers that want to buy more boeing aircraft. they're being pushed out to the early �*30s — �*28 �*29, �*30. so, for us, our delivery stream is critical to the point. and, tim, let me end on this — in, say, five years' time, or at least by 2030, and i know — we all know — you're going to be retired by then, given the fact that you were going to retire just before the pandemic hit — but, tim, by 2030, what's the picture look like for the global airline industry? the airline community is far more resilient than it ever used to be. it's had so many knocks, whether it be wars, you know, global traumas, you name it, you look back over the last 30—110 years, and they've had to sort of keep going and navigate through all of that. so, they've got some pretty skilled people now who can work through, whether it be the new thing
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on the block, which is environmentalism, you talk about turbulence, whatever it may be. so, we're better at doing what we're doing. for me, if you can get through covid and you can come out profitable as the airline industry, you can get through anything. and, in fact, it tells you that you're resilient enough and you're strong enough to deal with anything. five years' time, it's going to be a good story. well, on that point, sir tim clark, the big boss of emirates, always a pleasure having you on the show. thanks for your time, and we'll talk to you soon. yeah, keep in touch. well, that's it for this week's show, i hope you enjoyed it. don't forget, you can keep up with the latest on our global economy on the bbc website or the smartphone app. of course, you can also follow me on x — x me, i'll x you back! you can get me at @bbcaaron. thanks for watching, i'll see you soon. bye— bye.
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live from london. this is bbc news the international red cross says 22 people were killed in shelling near its offices in gaza. nigel farage faces criticism after he tells the bbc that europe and nato provoked russia's invasion of ukraine. we'll be asking what ukraine makes of the comments, as russian attacks on the country's infrastructure continue.
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and the runaway donkey living his best life with a herd of new friends. hello, i'm martine croxall. the international committee of the red cross says its offices in gaza have been damaged by shelling, which killed 22 people who'd sought shelter around its compound. it said all parties had an obligation to take precautions to avoid harm to civilians and humanitarian facilities. the icrc did not say who had carried out the attacks, adding that it was the most recent incident to have endangered civilian lives. an israel defense forces spokesman told the bbc that initial inquiries suggested there was "no indication" that it had carried out a strike in the area — but added that the incident was "under review". let's cross over to rafah and speak to william schomburg, head of office in rafah for the international committee of the red cross.

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