Remarks to International Aviation Club

Remarks to International Aviation Club
Marion C. Blakey, President and CEO, AIA
Wednesday, January 28, 2015

Gerry, thank you for that very kind introduction and good afternoon.  It’s always great to join so many friends and colleagues at the start of a pivotal year for aviation.

We’ve seen such pivot points before and what a huge difference they can make.  For example, last month, I joined many others in commemorating the seventieth anniversary of the Chicago Convention.  In the same Hilton Hotel that hosted the Convention, it was clear that the 52 signatory nations did much more than create a body of rules for one transportation sector among many.

The Convention revolutionized how we live today in ways that simply could not have been imagined at the tail end of World War Two.

And it was remarkable that the Convention moved forward at a time when the swift end of the war was not assured.  Indeed, with the ink on the Convention’s proclamation barely dry, the Battle of the Bulge erupted nine days later, prolonging the war in Europe for five bloody months.   But the signers of the Convention knew that even in the darkest times one can imagine a better future and help bring it about.

Similarly, there was another war raging in our country over a century and a half ago, when a determined Abraham Lincoln pushed for the Transcontinental Railroad.  Lincoln recognized the transformative power of this means of bringing people together would be well worth the enormous cost, even during a time of conflict.

Lincoln also took the long view about the value of education in affecting positive change.  “The philosophy of the school room in one generation will be the philosophy of government in the next,” he said.  I look here and see people well qualified to educate our current policy makers and the public about our industry’s vital role in positively shaping our modern world.   And this year you will really need to be heard.  And there are key decision points looming that require active educational efforts by all of us.

Policy makers in Washington, Montreal and in Europe will soon decide on policies that will have tremendous long-term implications for aviation and the global economy.  For the sake of a future in which the safest form of transportation will become even safer, in which aviation makes greater strides to reduce global warming, and in which manufacturers of unique Unmanned Aircraft Systems will help save thousands of lives – we all need to be heard.

You know the stakes.  Will we preserve industry’s innovative potential to make breakthrough leaps in safety and environmental technologies?  Or will we burden industry with inefficient command-and-control regulations that stick us with costly, unproductive mandates?

With growing dynamic demand, will we adopt trade and export promotion policies that encourage our aviation manufacturers to compete internationally?  Or will we get bogged down in polarizing political arguments that create uneven playing fields in the international marketplace?

Let’s hope that informed by enthusiastic advocacy efforts, policy makers world-wide will grasp the importance of today’s critical aviation issues.  Let’s hope they make the right choices for the sake of our collective future.

Those choices are coming soon.  In just a few days ICAO will host an important conference on aviation safety in Montreal.  Given last year’s events, it’s appropriate that ICAO work to improve aircraft tracking and responses to planes in distress.  We can avoid a repeat of the confusion following the tragic disappearance of Malaysia Airlines Flight 370.

In accomplishing this objective, however, let’s proceed with care.  The rush of some regions to impose their own regulations is very counterproductive.  It works against the broader safety goal we seek by forcing into the system inefficiencies, design complexities and a lack of harmonization.  Many in this audience can spur rational progress by educating the decision makers in Montreal about this issue’s nuances.

In Montreal, the group I chair, the International Coordinating Council of Aerospace Industries Associations, ICCAIA, will call for a near-term focus on performance based requirements rather than prescriptive technology requirements for airline tracking.  We believe a collaborative regulatory framework is the way to go, enabling various technology alternatives to be deployed over time.

Let me add one point about last year’s Malaysian Airlines incident regarding the need for all stakeholders to responsibly address aviation’s safety issues.  And that most certainly includes the media.
Some time ago, as National Transportation Safety Board chairman among other accidents I dealt with the tragic loss of American Airlines Flight 587.  In doing so, reporters lobbed at me tough but, for the most part, fair questions.  What I experienced was a far cry from the sensationalized, wild speculation that occurred after the Malaysian incident.  Believe it or not, one cable network’s anchor asked an expert if it were “preposterous” to imagine a black hole causing the aircraft’s disappearance.  Preposterous indeed.

Obviously, that’s an extreme example.  But let’s face it: We’ve come a long way from when the public could trust most major broadcasters to address serious issues thoughtfully as opposed to sensationally.

One means to ensure responsible aviation coverage is to educate people about what industry is doing to make aviation’s enviable overall safety record even better.  AIA’s new report: “Industry Innovation and Government Oversight,” is one example of what we can all do to foster dialogue and greater understanding of complex issues.  This report illustrates how industry-government collaboration on risk-based decision making, data sharing and safety promotion has led to significant safety improvements.

The report focuses on the certification and delegation system, through which the FAA is leveraging qualified industry expertise and organization to keep up with ever-increasing market demand for safer, innovative products.

AIA’s broader intent, as Congress turns to the FAA reauthorization bill is to safeguard the ongoing certification process against unnecessary regulatory changes.  Perhaps Congress can even strengthen the process.  By continuing to streamline and expand FAA delegation, industry will be able to offer new capabilities that will bolster aviation safety.  This in turn will free FAA’s staff to focus on critical issues and long-term safety trends.   Such actions will work to strengthen safety throughout the international system.

In the FAA bill, we believe Congress should also work to ensure that other national authorities have the incentive to adopt a streamlined process for aircraft certification.  As the FAA remains the gold standard for certification, it makes no sense that U.S. manufacturers be charged millions to get other nations to certify equipment the FAA has already certified.  This is another area where a spirit of harmonization makes eminent sense.

Of course no FAA discussion can neglect this year’s deadline for integrating civil Unmanned Aircraft Systems into the national airspace system.  I think we all recognize that the congressional mandate placed a real burden on the FAA, one that is difficult to meet.  And it’s clear that safety issues have been a major hold up for the small UAS rule and rules for other UAS categories.

While AIA and our member companies understand how these concerns are affecting the process, some perspective is in order.

Typically, the safety conversation boils down to two things: how to avoid collisions between piloted aircraft and UAS, and how to ensure that UAS safely land, even after the rare loss of communications links.  But we should look at the broader picture.  While banning civil UAS or slowing their introduction could marginally reduce an element of risk, doing so would demonstrably make our world less safe.  UAS have tremendous life saving potential when lost people need to be found, when wildfires develop, tornadoes hit, and power lines, oil rigs and bridges need close inspection.

As the regulatory process moves forward, decision makers should take into account the need to balance justifiable safety concerns, with the significant safety gains we can realize from UAS operations.  Again, education and engagement will hopefully lead to better policy-making.

The future of our aviation infrastructure is another major concern.  As this audience well knows, but not all policy makers grasp, our nation’s air transportation system is experiencing serious capacity challenges, and other national systems are as well.  Ongoing NextGen modernization efforts are making a major difference in helping to prevent congestion and delays, reduce carbon emissions, and improve safety.

But to be fully effective, NextGen must be fully funded and harmonized with the European SESAR system.  Unfortunately, FAA’s NextGen budget for this fiscal year is $200 million below the Administration’s request of only two years ago.   And if sequestration returns in Fiscal Year 2016, NextGen funding could further decline.  This year AIA is urging Congress to take a hard look at needed investments for the future, and ensure that NextGen doesn’t fall behind.  I hope you will join us in calling our lawmakers’ attention to this important issue.

A final note on aviation regulatory policies.  I sincerely hope that ICAO reaches agreement next year on market-based mechanisms to reduce aviation’s carbon footprint.  Through NextGen improvements to the management of traffic flow and through industry’s strong commitment to R&D on improved aircraft and engine designs and alternative jet fuels, we’re making tangible progress.  We need policy makers to understand that haphazard, prescriptive regulations will only marginally make things better at great cost, and impede the game-changing breakthroughs that this industry is prepared to deliver.

Finally, I’d like to touch on economic and trade policies that can also aid our industry’s growth.  We know the trend lines are positive.  Last year with a big boost from civil aircraft sales abroad, which represent 88 percent of aerospace exports, overall U.S. aerospace exports grew from roughly $111 billion in 2013 to nearly $119 billion.   Going forward, Boeing’s market outlook projects that over the next 20 years, the number of airline passengers will grow 4.2 percent each year, and cargo traffic 4.7 percent per year, well over projected annual world economic growth of 3.2 percent.  As a result of this growth, Boeing anticipates airlines will need nearly 36,800 new airplanes in the next 20 years, valued at $5.2 trillion.

With these positive conditions helping to bolster an aerospace and defense industry hampered by budget austerity, you’d think certain things would be no-brainers for Congress to support.  One example is passing trade agreements like the TransPacific Partnership that will expand significantly both cargo and passenger traffic between America and key Asian markets.

Another is supporting the continued operations of the Export Import Bank of the United States.  This institution helps finance billions of U.S. aerospace exports, supports more than 200,000 jobs, and strengthens the defense industrial base by helping large, medium and small companies succeed in new markets abroad.  Two years ago, Bank President and Chairman Fred Hochberg told this gathering that the Bank “has a more vital role than ever to ensure that capital goods keep flowing to help move the global economy forward.”  I agree wholeheartedly.

Unfortunately, a few rigid ideologues in Congress have made it their crusade to halt the Bank’s operations.  I imagine that there are foreign manufacturer representatives here who are flabbergasted that the U.S. would even consider declaring unilateral disarmament when it comes to the international arena of export promotion.

Well, I can tell you one thing for sure.  AIA has taken up the fight for keeping Ex-Im going strong and we won’t stop until the Bank is fully reauthorized, hopefully before the June deadline the previous Congress imposed.  And if you represent a manufacturer of everything from passenger to business jets, to helicopters that are sold abroad, and especially the parts and components that keep them flying, I know you’ll be there with us fighting every step of the way to make sure Congress knows the stakes and acts accordingly.

In closing, I hope that when this group is together a year from now we can look back and say that aviation policymakers rose to the occasion, and like the forgers of the Chicago Convention, helped aviation lead the way in creating a better world.  I know there are some people in the audience who had the honor of meeting Welch Pogue as did I, the remarkable gentleman and Civil Aeronautics Board chairman who was the chief architect of the Chicago Convention.  Before he passed away 12 years ago at the age of one hundred and three, Welch gave a speech in which he lamented that future international aviation agreements will be slow in coming.  “But do not give up in despair,” he said.  “Turn to those things that are possible.”  It is in this spirit of hoping that working together we can achieve the gains that are possible, I thank you again for the opportunity to speak to you today and for all that you do to make our great aviation system even greater.