Willie Walsh Discusses ATM Modernization, SAF

Willie Walsh took the helm as director general at IATA in April 2021, a position from which he stepped down at the end of July 2026 to become CEO at Indian carrier IndiGo. Before joining IATA, he was CEO at Aer Lingus, British Airways and International Airlines Group (IAG). This interview is based on extracts from an ATW Window Seat podcast with Walsh days before he left IATA and on the day it was announced that Saadia Zahidi from the World Economic Forum would succeed him as director general, starting on Nov. 1.

Saadia Zahidi from the World Economic Forum will become the ninth IATA director general in November. She will be the first woman to hold the role and, unlike her recent predecessors, comes from outside the airline industry, breaking a long-standing tradition of appointing former airline CEOs. What are your thoughts? Well, I’m delighted for Saadia. I think she’s going to really enjoy the role. Obviously, it’ll be a big change for her coming into the industry, not having experienced it before, but I think the board was very conscious when making that decision that she will have the support of the expertise within IATA. And I think it’s a strong indication of the confidence that the board has in the management structure of IATA, and obviously the support that the board will give Saadia in her new role. So, I’m excited for her, and I wish her the very best, and I’ll certainly look forward to interacting with her as the leader of one of our member airlines.

At the IATA AGM in Rio de Janeiro in June, you called out those making it harder for airlines to succeed— what could manufacturers have done differently? I think one of the criticisms that was leveled at Boeing going back a few years ago when they sort of lost their way, was that they were more focused on capital markets than on serving their customers. And to be honest, I think the same could be said now of the OEMs, particularly the engine OEMs, where they have been working very hard to satisfy the market and maybe not hard enough to satisfy their customers. And for me, that’s completely unacceptable. And you’ve got to give credit to Boeing under Kelly [Ortberg] and Stephanie [Pope] in particular. They’ve turned that position around and are getting great credit from the industry for the work that they’re now doing and the focus that they’ve had, or if you like, the refocus they’ve had on their customers. And I think there’s a strong lesson in that for the other OEMs.

You spent a day at the Farnborough Airshow in July, where there were lots of big aircraft and engine orders and a sense of optimism. Do you agree? Yeah, I think so. I mentioned that at the AGM, that the underlying demand for air travel continues to be strong. I think there is a feeling of confidence in the industry that we can steer our way through the current challenges that we face. I don’t see [the Iran war and jet fuel price hike] as a crisis for the industry. Clearly, we’re still forecasting profitability at an industry level. It will be very challenging for some airlines, but at an industry level, I think these are challenging times, but not crisis times.

Is the US on the right track in terms of air traffic management modernization? And what about Europe and the UK? Well, I think to be fair to the US administration, they are starting to tackle the issue, and that’s a positive. Now, there’s a long way to go. They have made significant financial resources available to start that process. We need to see that continue. But I think this is a positive development. And from the interactions I’ve had with them, I believe there’s a clear determination to address this once and for all. So, I see it as a very positive development. In Europe, I still get somewhat, I don’t know, angry, disappointed. Yeah, pick any word you like to what I see in Europe. I witnessed politicians celebrating about the renewal of the consumer regulations around air travel, and yet the same people appear to completely ignore the issue of air traffic control reform, which is going to be critical if the airline industry is to continue to grow in Europe and if Europe is to address the environmental challenge.

So, it’s very disappointing that we’re not seeing more focus on these important issues from the politicians in Europe. And I don’t get it, quite honestly. Europe knows it has to be more competitive, but there’s very little action on the part of politics in Europe to actually face up to these challenges. And I worry about the future of Europe as a result.

What motivated you to take the director general role at IATA in 2021 when the industry was still reeling from COVID? Well, I hadn’t intended doing anything. I felt somewhat guilty leaving the industry when I did, because obviously I announced my retirement from IAG before the COVID crisis started. And when the opportunity arose to take on the IATA job, it was a very simple decision for me because I felt I could contribute and I felt that I had a strong enough voice to represent the industry. I’ve said it to people, to get paid to be critical of people who are making our job difficult is a wonderful position to be in. So, I think it’s very important that IATA is a strong voice for the industry. And I knew what the industry was facing, the challenges that my colleagues and former competitors were facing, and I wanted to contribute. And I think IATA did have an important role through that period and will continue to have an important role into the future as well.

Given that many assumed there would be far more sustainable aviation fuel (SAF) by this point, was 2050 the right timeline to set for net zero when it was agreed back in 2021? Yeah, it’s a great question because there were some significant debates as to whether it should be later. Some carriers put forward the suggestion that 2060 was more appropriate. Others said it wasn’t going fast enough and wanted 2040. So, 2050 seemed a reasonable compromise and it did align with governments. But the important point that we made at the time was that we couldn’t achieve it as airlines on our own. It would require contribution from everybody, including governments. And it’s terrible to have to acknowledge that we’re not seeing that now. OEMs obviously haven’t played their part because they’ve delayed getting new aircraft into service and gross emissions are higher than they should be. We haven’t seen air traffic control reform, and that was going to be a critical part. We haven’t seen governments play their part in encouraging the production of SAF.

So, we’re at a point where I think that target is definitely in the balance. I think we can still achieve it, but it’s becoming more and more difficult every day.

What are your thoughts on governments around the world putting SAF mandates on airlines? Mandating something that doesn’t exist makes no sense. There is a sequence of measures that could be taken and mandates could well play a role, but you have to have the production of the product available first. And then if you see that the product isn’t being used, isn’t being acquired in the way that the industry has committed to doing so, then I think you could introduce mandates. But saying that you’re mandating people to use something that doesn’t exist and where the producers don’t want to produce it and don’t care if they suffer financial penalties because they’ll just pass those financial penalties onto their customers, that’s a crazy situation to be in. And it isn’t sustainable from a financial point of view, never mind from an environmental point of view.

Is optimism a must-have character trait to stay with airlines through so many different issues that have struck the industry? You talk to anybody in the airline industry and they’ll tell you it just gets into your blood. It’s a fascinating industry. Can be very frustrating at times. It’s incredibly challenging, but it’s a great industry to be in. And I’ve always been optimistic about the future, and I continue to be optimistic about the future. I’ll continue to criticize those who are making the future more difficult for us, but it is a fantastic industry. I’ve enjoyed every minute of my time in the industry, and I’m looking forward to spending more time in it.

What are you most looking forward to as you begin your next career step as CEO at India-based IndiGo? It’s a country that I’ve been highlighting for many years, identifying the difference between the benefits of aviation in an economy like India, which clearly has not seen the significant benefit that Europe has seen because it’s only at the beginning really. I’m excited to be able to contribute to what I think is going to be a fantastic industry and making the contribution that it has made, but more importantly, the contribution that it will make to the growth of the Indian economy.

Listen to the full interview with Willie Walsh on ATW’s Window Seat podcast at https://aviationweek.com/podcasts/window-seat-podcast/podcast-iata-chief-walsh-reflects-industry-challenges