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Host Airline

Master of ceremonyBill MorrisonAuthor, trainer, consultantSandler

IATA Wings of Change Europe, Berlin, 19-20 November 2019

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A strategic roadmap for Aviation Carsten SpohrChairman of the Executive Board & CEO / Chair of the Board of GovernorsLufthansa Group / IATA


Welcome AddressSteffen BilgerParliamentary State SecretaryFederal Ministry of Transport and Digital Infrastructure, Germany


The new European Commission’s vision for a sustainable air transport industry


Filip CornelisDirector for Aviation (DG Move Directorate E)European Commission

Sustainable Growth, the only way forward

Alexandre de JuniacDirector General and CEOIATA


What role for Europe in an ever more global and shifting economy?

Brian PearceChief EconomistIATA


Challenges for European air transport

Brian PearceChief Economist

19th November 2019

Europe’s air cargo is shrinking and travel is stalling

Source: IATA Economics using data from IATA Statistics

3.8

4

4.2

4.4

4.6

4.8

5

5.2

5.4

5.6

120

130

140

150

160

170

180

2015 2016 2017 2018 2019

FTKs

, bill

ion

per m

onth

RPKs

, billi

on p

er m

onth

RPKs and FTKs carried by European airlines, billion per month, seasonally adjusted

RPKs

FTKs

The trade war is causing serious damage

Source: IATA Economics using data from Netherlands CPB and Oxford Economics

European business and consumers less confident

Source: Markit PMI composite, EU DG ECFIN consumer survey

-30

-25

-20

-15

-10

-5

0

40

42

44

46

48

50

52

54

56

58

60

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Net

bal

ance

of r

espo

nden

ts

Inde

x, 5

0 =

no c

hang

e

EU28 business and consumer confidence

Consumer confidence

Business confidence

Central bank extraordinary support resumes

Source: Refinitive Datastream

0

1000

2000

3000

4000

5000

6000

2007 2009 2011 2013 2015 2017 2019

US$

billi

on

Central bank assets

European Central Bank

US FederalReserve Bank

But no support from fiscal policy

Source: IMF World Economic Outlook, October 2019

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

% o

f pot

entia

l GDP

Change in the Government's structural budget deficit as a % of GDPEuro area US China

Stimulus

Austerity

Economic growth forecasts could well be cut

Source: IMF World Economic Outlook, various

-5

-4

-3

-2

-1

0

1

2

3

4

2006 2008 2010 2012 2014 2016 2018 2020

% c

hang

e ye

ar-o

n-ye

arIMF forecasts of EU28 economic growth

October 2014

October 2016

October2018

Dates show the revision of EU28 GDP forecasts by the IMF

October 2019

The weak economy should keep oil prices low

Source: IATA Economics using data from Refinitiv Datastream

20

30

40

50

60

70

80

90

100

110

120

2014 2015 2016 2017 2018 2019 2020

US$

per b

arre

l

Brent crude oil price and oil future curve

Nov 2018 futures curve

Nov 2019 futures curve

Airlines will need strong balance sheets

Source: IATA Economics using data from The Airline Analyst

0

1

2

3

4

5

6

7

8

2010 2011 2012 2013 2014 2015 2016 2017 2018

Net

deb

t adj

uste

d fo

r ope

ratin

g le

ases

/ EB

ITD

ARNet debt as a ratio of EBITDA

Middle East

Asia Pacific

Latin America

N America

Europe

Investment grade

Long tail of weaker airlines in Europe

Source: IATA Economics using data from The Airline Analyst

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0 5 10 15 20 25 30 35 40 45 50 55

US$

milli

on

Individual airlines, number

EBIT for individual European airlines, $ million, 2008 versus 2018

2018

2008

Competition remains strong

Source: IATA Economics using data from DDS

0%

10%

20%

30%

40%

50%

60%

70%

80%

2011 2012 2013 2014 2015 2016 2017 2018

% o

f tot

al b

ase

fare

reve

nues

Revenue share of intra-EU routes served by 1, 2, 3 or more airlines

1 airline 2 airlines 3 or more airlines

Climate change one of the key structural challenges

Source: HSBC ‘The Second Frontier: Climate is changing for airlines’, September 2019

0

1

2

3

4

5

6

7

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Sent

ence

s pe

r ear

ning

s ca

ll

Frequency climate issue discussed at earnings calls with investors

European airline investor calls

US airline investor calls

0

1

2

3

4

5

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Annu

al d

epar

ture

s pe

r hea

d of

pop

ulat

ion

GDP per capita, US$

Passenger departures per head of population vs living standards

US

UK SwedenAustralia

France

Germany

JapanChina

Brazil

IndonesiaIndia

Nigeria

Vietnam

Will ‘Flygskam’ change Business as Usual?

Source: IATA Economics using data from PaxIS and Datastream

Size of bubbles proportionate to number of passengers

Aviation centre of gravity shifting away from Europe

Source: IATA/Tourism Economics Air Passenger Forecasts, October 2019

Emerging market passenger flows grow rapidly

Source: IATA/Tourism Economics Air Passenger Forecasts, April 2019

0.0

0.5

1.0

1.5

2.0

2.5

China United States India Indonesia Thailand Vietnam

Billi

ons

Incremental annual passenger numbers by 2038, billion

Return to globalization

Current trends

Protectionism deepens

Need to eliminate costly and wasteful congestion

Source: IATA Economics using airline losses estimated by PRC and average vale for Eurocontrol value of time for passengers

0

1

2

3

4

5

6

7

2014 2015 2016 2017 2018

Euro

bill

ion

Cost of en-route ATFM delays in Europe, Euro billions

Consumer loss Airline loss

Productivity vital given Europe’s poor demographics

Source: IATA Economics using data from Oxford Economics, November 2019 forecast

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2000-2010 2010-2020 2020-2030

Aver

age

annu

al %

gro

wth

(CAG

R)

Average GDP growth in Europe and its componantsGDP/capita growth Population growth

This is aviation’s critical role for Europe

Source: SRS Analyser, November 2019, Europe to all airports, scheduled flights

Airlines connect Europe better than other regions

Source: IATA Economics

0

100

200

300

400

500

600

Europe Asia-Pacific Middle East Africa Latin America North America

Inte

rnat

iona

l des

tinat

ion-

wei

ghte

d se

ats p

er 1

000

peop

le

International connectivity relative to the population size

2013 2018

Generating key ingredients for economic success

Facilitating flows of:• Investment• Trade• Skilled labour• Competition• Innovation• Tourism

Boosting European productivity

(i.e. doing more with less)

Thank you

[email protected]/economics


NETWORKING COFFEE BREAK

Largescale electric aircraft –myth or reality?

Andreas KloecknerCoordinator Electric Flying Program Strategy AeronauticsDLR


NAS

A

DLR

https://www.iata.org/whatwedo/environment/Documents/technology-roadmap-2013.pdf

Existingtechnology

Carbonoffsetting

Radicaltechnology

https://en.wikipedia.org/wiki/Contrail

NASA

DLR

wiki/File:Marbore_2_gas_turbine_cutaway_02.JPGwiki/Drehstrom-Asynchronmaschine

https://de.wikipedia.org/wiki/Datei:Stromabnehmer_ICE_3.jpg

https://upload.wikimedia.org/wikipedia/commons/e/e2/Kohlekraftwerk_Niederaußem-LR.jpg

Contact: German Aerospace Center (DLR e.V.)Programme Strategy AeronauticsD-51147 Köln-Porz

Dr.-Ing. Andreas KLÖ[email protected]

mailto:[email protected]

IATADiversity& Inclusion25 by 2025An industry pledge to work towards shifting keyDiversity & Inclusion Metrics across the industryby 25 %, or up to a minimum of 25% by 2025.

Results will be shared annually at the AGM

A forum to share best practices and ideas for the airline to use and implement.

25by2025Wings Of Change Signatories

Airline CEOs on the spot – interviews

Benjamin SmithChief Executive OfficerAir France-KLM

Barbara ScherleJournalist and German TV Anchor

Oana PetrescuDirector GeneralBlue Air

Bjørn KjosPresident and FounderNorwegian Air Shuttle

Carsten SpohrChairman of the Executive Board & CEO / Chair of the Board of GovernorsLufthansa Group / IATA



Benjamin SmithChief Executive OfficerAir France-KLM



Oana PetrescuDirector GeneralBlue Air



Bjørn KjosPresident and FounderNorwegian Air Shuttle



Carsten SpohrChairman of the Executive Board & CEO / Chair of the Board of GovernorsLufthansa Group / IATA


ANNOUNCEMENT


NETWORKING LUNCH

SPONSORED BY

David AntonioliCEOVerra

Anita MendirattaFounder & Managing DirectorANITA MENDIRATTA & Associates

Jonathon CounsellGroup Head of SustainabilityIAG

Ricardo EntzCOOXO Airbus Demonstrators

Environment, a sine qua non condition to aviation sustainability –Fire-side chats

Maarten van DijkCEOSkyNRG

Maurice GeorgesDirectorDSNA

Tim JohnsonDirectorAviation Environment Federation

ENVIRONMENT:A Sine Qua Non Condition to Aviation Sustainability

NOVEMBER 19TH 2019

Berlin

THE SCOPE OF GLOBAL AVIATION

OUR GLOBAL SUPPORT FOR EMPLOYMENT & ECONOMIC ACTIVITY

AVIATION IN CONTEXT

AVIATION TRACK RECORD ON IMPROVING EFFICIENCY

IATA and World Resources Institute data

SETTING THE STRATEGIC DIRECTION

CORSIA: STATES INCL. IN FIRST (VOLUNTARY) PHASES

IATA RESEARCH - 2019: ‘WHAT THE PUBLIC IS TELLING US’

IATA RESEARCH - 2019: ‘WHAT THE PUBLIC IS TELLING US’

Begougne de JuniacBegougne de Juniac

Environment, a sine qua non condition to aviation sustainability – Fire-side chats



64

IAG pathway to net zero CO2 by 2050We will proactively work with partners to ensure successful delivery our 2050 goal

22MT27MT

demand growth

Do nothing scenario

New aircraft and operations

Sustainable aviation fuels

Action scenario (gross emissions)

Carbon offsets and removals

Net emissions

2025: 80g CO2/pkm

MT CO2

net CO2 emissions(trajectory towards IAG net zero target)

39%

18%

43%

0

10

20

30

40

50

60

70

80

2020 2025 2030 2035 2040 2045 2050

4Cs for Combatting Climate Change

1.Climate Science2.Convince your CEO3.Commit to targets4.Create incentives

Dick BenschopPresident & CEORoyal Schiphol Group

Sylviane LustDirector GeneralAIRE

Eamonn BrennanDirector GeneralEurocontrol

Janusz JaniszewskiPresidentPANSA

Capacity – Accommodating growth today & tomorrow

Tanja GrobotekDirector Europe AffairsCANSO

Rafał MilczarskiCEOLOT

Supporting European

Aviation

IATA Wings of Change Capacity – Accommodating growth today & tomorrow

Eamonn BrennanDirector General

19 November 2019

O u r s t o r y b e g i n s … . .

To modernise European ATC and deal with….

Fragmentation Capacity / Delays Cost

Single European Sky I (2004)

Creating Regulatory framework

… o u r s t o r y c o n t i n u e d . . .

To modernise European ATC and deal with….

Fragmentation Capacity / Delays Cost

Single European Sky II (2008)Performance

Scheme NM Function

… B U T … . . o u r s t o r y stil l c o n t i n u e s … . .

70%

22%

8%

2682829056

58782

52182

0

10000

20000

30000

40000

50000

60000

70000

2016 2017 2018 2019

Avg

daily

del

ays

(min

)

Year-to-date Network en route delays

CAPACITY & STAFFING WEATHER DISRUPTIVE EVENTS

84% worse than 2017STILL IN CRISIS

SITUATION

SES Success

Performance Scheme – cost stability

SESAR

Network Management

EASA Oversight

Industrial partnerships

Operational Stakeholders

2019 - Improved Predictability But NOT Long-term Solution

DFS26.2%

DSNA21.1%

Austro Control10.9%

HungaroControl (EC)

9.0%

ENAIRE7.6%

skeyes3.9%

Croatia Control3.9%

DCAC Cyprus2.8%

Other14.8%

Karlsruhe UAC17.7%

Langen4.4%

Marseille AC11.4%

Reims3.2%

Barcelona AC+AP4.4%

Madrid2.5%

Share of total en-route ATFM delay(%)January-October 2019

16.1 million minutes en-route

ATFM delay

(ê -10.8% vs. 2018)

Source: EUROCONTROL/ PRU@ https://ansperformance.eu

… a n d t h e

airports?

Amsterdam/ Schiphol

16.6%

London/ Gatwick

6.7%

Athens6.7%

Lisbon6.5%

London/ Heathrow6.1%Zürich

4.3%Barcelona3.8%

Madrid/ Barajas3.7%

Frankfurt3.5%

Istanbul/ Atatürk2.3%

Other39.6%

Share of total airport ATFM delay(%)January-October 2019

5.8 million minutes airport

ATFM delay

(é +7.4% vs. 2018)

Source: EUROCONTROL/ PRU@ https://ansperformance.eu

27% of the Delay Problem

Resistance to Change

Ignore the Problem

Crisis forces Proposals

Accept the Proposal “in

Principle”

Nit pick the proposal to

deathUse Process

Delays

Problem hopefully

goes away

Start again

Are ANSP Bus iness ’s o r Gover nment U t i l i t i e s ?

They are very safe

They talk like business’s –customers

They make very good returns (average 22%)

They provide a service

Staff - positive service ethos

• So what’s the problem ?

Nearly all Government controlled: • States appoint Boards• States get Dividends• States own the shares• States regulate (NSAs etc)

• What happens if you don’t perform ?

• When things get tough:• Question the assumptions• Blame Europe!

Ownership V Independence

How does it work in reality?

If the facts don’t fit the theory, change the facts

2 x IMPLEMENT

We h a ve a g re a t Oppor tuni ty Now – t o h e l p o u r c i t i z e n s a n d t h e e n v i r o n m e n t

Today V 2030•

Thank youEamonn Brennan, Director General

@eurocontrolDG

Dick BenschopPresident & CEORoyal Schiphol Group

Sylviane LustDirector GeneralAIRE

Eamonn BrennanDirector GeneralEurocontrol

Janusz JaniszewskiPresidentPANSA

Capacity – Accommodating growth today & tomorrow

Tanja GrobotekDirector Europe AffairsCANSO

Rafał MilczarskiCEOLOT


NETWORKING COFFEE BREAK

Safety first, or when compromise is not an option

Chris KempisDirector of Flight OperationsCathay Pacific

Tanja Harter Technical Affairs DirectorECA

Patrick Ky Executive DirectorEASA

Michael RomanowskiAircraft Certification Service Policy & Innovation Division DirectorFAA

Yannick MalingeHead of Product SafetyAirbus


Federal AviationAdministration

Presented to: IATABy: Dr. Michael C. Romanowski, Director

Policy and Innovation Division, Aircraft Certification Service

Date: November 19, 2019

Federal AviationAdministration

Safety FirstWhen Compromise is Not an Option

Federal AviationAdministration90

Safety first, or when compromise is not an option

Chris KempisDirector of Flight OperationsCathay Pacific

Tanja Harter Technical Affairs DirectorECA

Patrick Ky Executive DirectorEASA

Michael RomanowskiAircraft Certification Service Policy & Innovation Division DirectorFAA

Yannick MalingeHead of Product SafetyAirbus


Cybersecurity –Are you prepared?Esti PeshinVP & General Manager Cyber DivisionIsrael Aerospace Industries


UNCLASSIFIEDThis document contains proprietary information of Israel Aerospace Industries Ltd. and may not be reproduced, copied, disclosed or utilized in any way in whole or in part, without the prior written consent of Israel Aerospace Industries Ltd


WINGS OF CHANGEA Blueprint for Civil Aviation Cyber Security


| 94

2015-2019: Main Cyber Events

2015 2016 2017 2018

Swiss

UK


| 95

Cyber Aviation Landscape


| 96

CNI(Influence &

Disinformation Campaigns )

Large Scale Industrial Espionage

Cyber crimeCyber Attacks

On Critical Infrastructure

State & Super Power Level

Threat

Cyber - A Strategic Threat

Use of publicly available

malware by threat actors

Attackers eyeing “New Technologies” - the

cloud, IoT,..

Lack of attribution and accountability

The widening skills gap, and less trained

experts to fill security roles

Weaponization of the cyber domain

Strategic Trends


| 97

National Grade Challenges Require National Grade Solutions

§ Technology

§ Methodology

§ Constant Innovation

§ Cooperation (national and international)

§ Capacity Build-up and Maintenance


| 98

Aviation Cyber Security

Airlines, Operators and Airports• All possible Tech domains and Risk domains combined

• A growing connectivity and interoperability

• Global compliance regulations

• High valued target

• Need to balance: safety, customers, regulation ….

Now, just (try to) add Cyber…Michael Fisher @Fisher85M 23 Aug 2017

#Internet of #Aviation {Infographic}


| 99

The Threat Landscape

Tampering – Ground Maintenance Systems

Tampering – Insider and Supply Chain Threats

Unauthenticated Inputs (Data / Voice), Message Spoofing

Navigation System Spoofing

Tampering –Air Traffic Control Computers

Denialof Service

(DoS)

Remote Spying and Data Theft or Data Manipulation

Tampering – On Board Hacking

Replay

Missiles/ UAV

Hijacking / Terror

Disruptive Passengers

Equipment / Data Theft

On board Tampering / Sabotage

Ground Tampering / Sabotage

Explosives


| 100

E-enabled aircraft

§ Uploading and downloading large amounts of flight and system data

§ In-flight entertainment § Wireless technology§ Remote maintenance testing and

diagnostic§ Equipping engines with “call home”

functions § Wireless communications § Software updates


| 101

The ChallengeMultiple Interconnected Cyber Environments

Airport IT Systems

Ticketing Systems

Police and Border Control

Radar Systems

Passenger Wi-Fi Systems (Bring Your Own Device)

Aircraft On-board Systems

Passenger Screening

Air Traffic ControlGround Transportation

SystemBaggage Handling Systems

A large number of “Cyber Environments” that affect airport security and operations


| 102

§ More systems are being connected

§ Passengers may see their gate information, flight delays etc. from the smartphones

§ Pilots may upload navigation information from their tablets to their aircraft

§ Cargo system may be accessible to airport personnel via the airport IT system

“Even if you think your system is not connected to the Internet – It usually is!”

The Challenge IIInterconnectivity Between Systems


| 103

Critical National Infrastructure Mission Critical Systems (MCS)

Airports are a Critical National Infrastructure with a proliferation of Mission Critical Systems

IT Security is Simply Not Enough !

The Challenge IIProtecting Mission Critical Systems


| 104

Develops & manufactures advanced systems for the Israel Defense Forces and foreign customers worldwide

Active in both the defense and commercial markets

Active in over 90 countries

Employees: ~15,000

Sales 2018: ~ $3.7B

Export: 80% of total sales

Backlog: ~$13.5B

Registered company - Tel Aviv Stock Exchange

Largest Defense and Aerospace company in Israel

Government owned

Established in 1953

Cutting edge technologies and solutions for: Space, Air, Land, Sea and Cyber

IAI – Israel Aerospace Industries


| 105

IAI - a Gate to Israel’s Cyber Eco-System and Innovation

§ IAI leads the best and finest of Israel’s cyber eco-system & Innovation

§ Reducing the risk of choosing novel technology and dealing with start-ups

§ Israeli Cyber Companies Consortium (IC3)


| 106

IAC3 – Israeli Aviation Cyber Companies Consortium

§ ELTA leads a diverse group of Israel's leading cyber & aviation companies

§ Integration of knowledge and experience of technological leaders in aviation industry

§ Providing holistic, end to end, cyber solutions for commercial aviation


| 107

A Hybrid Full Scale SolutionIT Security is not enough• Hardening - end to end cyber hardening process• Monitoring - a Cyber Security Early Warning

Centre including unique cyber threat intelligence

• Forensics and multiple source data analysis (SOC of SOCS)

• Collaboration - A-ISAC connectivity• Intelligence - Cyber Intelligence Capabilities,

augmenting the physical security• Awareness and Training – tech teams, ops teams

and managers/commanders


| 108

Cyber Eco-System

Government

HumanResources • Cyber professions

• Cyber education

• Organizational structure

• Operational tools• legislation &

regulation• National level tools

and capabilities

AirlinesAirportsOperators

• Resilience • Awareness• Information sharing

• Resilience • Awareness• Information sharing

Technology

• Integration• Methodology• Domain Expertise• Development Lab• Fusion• Automation• Tailor made• Risk reduction


| 109

DarkWeb

IT system Cyber Security

OT system cyber securityCyber Hardening

Control Stations NG Cyber SOCs

Airport SOCAirline SOC

Secure, Authenticated & Hardened Communication

Link (SatCom & LTE)

Central Cyber Threat Intelligence Centre

Remote Cyber Forensics

On Board Autonomous

Cyber SOC

Active Defence tools

On Board Cyber Hardening

Root of Trust

Training

Consulting

Policy

Forensic lab

Aviation System-wide Cyber Security Architecture


UNCLASSIFIEDThis document contains proprietary information of ELTA Systems Ltd. and may not be reproduced, copied, disclosed or utilized in any way in whole or in part, without the prior written consent of ELTA Systems Ltd. | 110

End to End Cyber Center

Forensics Lab

Training

Cyber Operations Center

CERT SituationalAwareness

MSS

`ThreatFusion

Portal and Call Center

CollectionManagement

Cyber Threat Intelligence

Web

Feeds

Ad Hock Sources

Sector SOCs & Monitored

Organizations

Pro-Active Defense LayerPro-Active array & tools NG Monitoring Systems


| 111

IAI - Unique Value Proposition

§ Aviation Cyber Labo Forensics o R&D

§ Aviation Cyber Risk Analysis

§ Aviation Cyber Range & Training

§ Aviation Ecosystem Hardening

§ Specialized, Industry (sector) specific NG SoC


THANK YOU

Master of ceremonyBill MorrisonAuthor, trainer, consultantSandler


AT WASSERWERK

Buses from 18:30 to 18:45

Grand Hyatt Lobby

Networking Gala Dinner

Sponsored by

THANK YOU
