Aviation is facing a more and more challenging and competitive environment, due to the security threats, changes of business philosophy, aggressive and increasing competition between legacy carriers and low cost airlines and many more. But still. “I think it is the most fascinating sector, there is a lot of change happening in the society to be driven by the digital, the web revolution and that is really exciting, but the real physical world wide web is aviation”, says Olivier Jankovec, Director General of ACI Europe, in an interview for Transilvania Business Magazine, granted at the 26th General Assembly Congress and Exhibitions, hosted in Athens, by ACI Europe and Athens International Airport.
How was ACI Europe founded? Which were initially the concept and targeted functions, and how did its key directions of focus and engagement evolved, in brief?
ACI was founded in 1991 as a global association, actually I think at the time because it was a recognition that when we look at aviation, the policy and the regulatory agenda was dictated solely by the airlines, and I think created a lot of frustation on airports’ side and this is where basically the decision was made to also create a trade association at the global level for the airport industry because that is also the time when, of course, the traffic was turning to grow more rapidly and when airports were started to change. Because I think if you look historically the way airports developed, they were merely infrastructure providers, they were financed by state, they were often part of public administration, so they weren’t really businesses and basically all the states expected from the airports was to take care of national airline. I think it wasn’t a realization of state that actually airports are businesses in their own way and they need to evolve in that direction.
How did the airports in Europe changed during this time, how would you characterize now the evolution of airports? Could we refer a little bit also at the evolution of airline operators – how do you see their evolution?
I think what it is fantastic is the transformation of airports from mere infrastructure providers, publically financed, focused on the national airline to dynamic and flexible businesses in their own way. As an airport today, you cannot be focused solely on the national airline, your mandate, your social and your business mandate is to develop connectivity and in developing that connectivity you cannot rely only on the national airline, because now really we are living in an open market, and actually we are many new, dynamic actors in this market and especially if you look at the moment what is happening in Europe we see that the main airlines are actually driving gross, that are developing new routes, that are creating new connectivity at the local sky. I think clearly today whatever your size or location of an airport you cannot ignore the local sky. And plus we have a local development on the side of local airlines, coming from outside Europe, the Gulf airlines, Turkish airlines, US airlines who are also very aggressive, who want to position themselves in Europe, who are providing new connectivity to our European Community, and you know you need to engage within these airlines as well. I think the role of the airports now it is really the connectivity developed, and then has come also at the same time with more difficulties on the side of the states to publically finance the airports. I think, since the 80s, progressively, it started in the UK, but now it’s spreading out in Europe, we are seeing that states have more and more national budget constraint and that they think, and I think they are thinking for a good reason that airport development should be undertaken by the airports themselves, with their own funds, and potentially also by private investors. But the combination of these two things means that we need the regulatory and the policy framework for the airports to change because we are still living with the legacy of a policy and regulatory framework which some extents, not on everything, but still on some aspects, is still based on the premises that the airports are public administration, that they should focus on the national carrier and that they are not businesses. That is completely not a vision from the past. So I think a big role of the ACI was actually to educate policy makers. At a look at the last 10 years especially has been to educate policy makers and regulators that airports are businesses on their own right and that we need a policy and a regulatory framework that reflect that, to encourage that kind of development. And I think beyond airports, what we are trying to push in Europe is to change the focus of aviation policy, because again traditionally aviation policy has been about, you know, protecting the national airline. We help thinking about the consumers, I think the reason for existence of aviation, the objective of aviation is to provide mobility and connectivity, to support the economy, to allow people to travel, to allow cultures to meet, and clearly that means that the focus of aviation policy should be on the consumer. I think when governs regulate our sector they should not think what is good for the airline, they should not even think what is good for the airport, they should think what is good for the consumer and what is good for the economy, because we are here to support economy development. In spite of our effort, we are seeing this shift in mentality in many countries and also at the European level, which I think is good. When we look especially on the issues of external relations, the issue of traffic rights, and opening market for air services between Europe and the rest of the world we continue to see a lot of protectionist forces, and these protectionist forces I think it is interesting because they are not placing the interest of the consumer at front, they are placing the interest of some airlines at front. It is clear that we need to move to an open sky and liberal environment. Consumers want more accessibility and ultimately what they want is the right rights, plenty of routes, plenty of connectivity and the right service. And I think it doesn’t matter which airline in particularly is giving that, is to them to choose. We have to offer them the choice.
I think the business transformation is really the key, and that we still have a lot of grounds to make in terms of getting the policy framework that much in different area of regulation – aviation liberalization and open sky, the regulation of airport charges. We need the airport charges to reflect better the fact that we are not monopoly.
Who dictates the rhythm of change: the airlines, the airports – regions or the passengers?
Of course, I think for us, the main driver of change is what is happening in the airline market and the low cost evolution has changed the rules of the game completely, and as you have seen in my presentation in the first day, I think we didn’t reach the end game, we will come more disruptions coming, we are very exciting time ahead because that will keep airports on their toes and that will force airports to continue to change as well.
What are the main advantages for the ACI members, especially for local and regional airports in any country? Which are the directions that the organization will follow in the next 5-10 years?
It is really about first the airport industry needs a strong voice to discuss with regulators, especially at the European level, and that’s what we are doing, because we are the only trade association for the airport industry, and so we are the single voice. We have one, united voice for all airports, that give us a lot of leverage when we discuss with European Commission or when we discuss with states, because this makes us very
authoritatively. It is about us defending the interest of our industry, and I think it is a main advantage for the airports to be members, because if they are members they can participate, they get access to information about what’s happening or it’s likely to happen in the regulatory framework, that they can operate in terms of business planning strategy, so that airports are able to anticipate what’s going to come. The second aspect is that we act as an hub, we have more than 400 experts coming from the membership who come together and they share best practices, the benchmark. If an airport has a problem, an issue, they use us to see how this problem, issue is seeing with the other airports. So it’s a unique network hub that we offer to our members, that is a key to allow them progress the local agenda very clearly, we offer training, we offer conferences, we set the industry standards, so I think we allow airports to make further progress in their business. I hope that’s what we are providing really.
Which would be the most important 3 recommendations for the development of airports in Romania, in ACI’s perspective?
I think what is valid for Romania is valid for any European country, I think it is about working on being efficient and customer focused. I think the focus on the end customer, the transformation of airports from b2b to b2c businesses is the key in my view a critical factor for future success. The focus on quality, the focus on how can the airport develop a relationship with the passenger is very important. At the same time I know the Romanian airports are doing that because I see that, being very active on airport developments, chasing airlines, making sure you offer a diversified and competitive package in terms of charges for airlines, but at the same time protecting your ability to invest for the long term, and very important to diversify risks, trying not to put all your eggs in the same basket, and diversify your airline base. I know it is very simple to say, but it is very difficult to do, especially if you are a small regional airport, because if you are a small regional airport, you are happy if you have one or two airlines and it is very difficult to diversify. The last thing is work on sustainability, because it might not be an immediate change, maybe for some airports in Eastern Europe especially, but sustainability is going to be key for our future. We are living an era where states and governments have less resources to do things, and where actually it is very important that businesses take more social responsibility, because for the governments become more difficult to do things that citizens expect, and I think that places a special responsibility on business to respond to that, because if they don’t respond to that new reality I think ultimately it isn’t going to be good for their businesses. It is a different way of engaging with customers, it is going beyond customers, it is going to citizens. And I think that for any business, not just aviation, it is becoming more and more important in the future.
You are very passionate about your work…
Yes, because it is a fascinating industry. I think the airport industry is amazing, it is at the confluence of many differences, it’s not just about aviation, because you have all these commercial activities, so if you are an airport, you are also a retailer, you are a restaurant, at the same time you need to deal with the airlines, you need to deal with the air navigation service provider, you need to deal with the police, you need to deal with the customs, you need to deal with the local environment, to know the business in the local environment, the citizens in your local environment, the politicians in your local environment, the politicians at national level, it is really a multi-faceted business that I think it is very emblematic of how actually society, modern society and the world is evolving in 21th century, where everything interrelated in a way, and you cannot no longer deal with your own business or sitting in your own corner. You have to really have an open mind and you have to make the sum of all different things that really affect your business, and drive your evolution.
You also celebrate 10 years in ACI and in its management as Director General… Looking back what determined your career in Aviation and what is it that you enjoy the most?
I think I was born, when I was a baby I already loved aviation. I think it is the most fascinating sector, there is a lot of change happening in the society to be driven by the digital, the web revolution and that is really exciting, but the real physical world wide web is aviation, because getting people connected to the web is great, it opens up tremendous opportunities, but down the line I think people still want to meet physically, and meeting physically it is what confront us to other people, with their reality and it is what we need to remain human beings in a noble sense of it and this is where aviation is just a fantastic industry and business because this is what we provide: the opportunity for people to meet face to face, to confront themselves, to do business, to enjoy themselves, to exchange cultures, to promote better understanding, and I think we need a better understanding in these times, you know we are facing a lot of security challenges, geopolitical challenges, and I think in that perspective, also politically, the role of aviation in bringing people together is more important than ever, and that makes our industry truly exciting.
ACI EUROPE is the European trade body for airports and as such, is also the European region of Airports Council International, the only global federation of airport operators. ACI EUROPE is based in Brussels, Belgium and employs a full time staff of 19 people, under the leadership of Director General Olivier Jankovec.
By Ligia VORO & Ionut OPREA