(Acknowledge VIPs)
Distinguished guests,
Ladies and Gentlemen.
Good morning.
“The sky is the limit only for those who aren’t afraid to fly…” Thus said Captain Shekhar Gupta of AeroSoftCorp. He certainly was not referring to any of you here today, because I would like to believe that you are not afraid to fly.
You will also recall this other famous saying by an anonymous author: “To most people, the sky is the limit (but) to those who love aviation, the sky is home.” I know it is your love for aviation that has brought you here today, so welcome home.
Welcome to our Safety and Security Conference and Exhibition, which we are holding this year as part of the ongoing celebrations of the 70th anniversary of SXM Airport. Indeed, time flies. Seventy years ago also, the Chicago Convention was signed which basically established the International Civil Aviation Organization, ICAO.
It is interesting to note that the 52 states that signed that Convention on December 7, 1944, while World War II was still raging on, did so after “having agreed on certain principles and arrangements in order that international civil aviation may be developed in a safe and orderly manner and that international air transport services may be established on the basis of equality of opportunity and operated soundly and economically.”
In other words, the founding principles of international civil aviation 70 years ago were safety, security, order, equal opportunity and sound and economical operation of air transport services. You can therefore understand why we at SXM Airport have chosen “Prioritizing Safety, Security and Revenue Growth to Maximize Aviation Efficiency in the Caribbean” as the theme of this conference. In fact, in tune with this theme, the fundamental question we should be asking is: “how do we prioritize safety, security, and revenue growth to maximize aviation efficiency in the Caribbean?” I am sure this conference will provide practical answers to this and other pertinent questions. But allow me to share some of my own thoughts with you.
From day one, safety and security have been top priority for us at SXM. I am sure that this is the case with all other airports around the world. In fact, it is safety and security considerations that triggered off the delays and cancellations of thousands of international flights from Chicago’s O’Hare airport after fire had damaged a key Illinois air traffic control center last Friday. This has caused a domino effect that has been felt around the world, as O’Hare is the world’s second busiest airport. As a matter of fact, I was lucky to have gotten out of Chicago early enough, after attending the World Routes conference there. The Vice-Chairman of our Supervisory Board of Directors, Mr. Ludwig Ouenniche, who will be addressing you later, was not so lucky. He was a victim of the delays and cancellations.
The point is nobody in their sane mind today would do anything to jeopardize safety and security. What appears to be the act of a disgruntled employee in the case of Chicago’s airports, has resulted in a ripple effect which has left thousands of innocent passengers stranded, and which certainly would result in millions of dollars in lost revenue. Needless to say, the most important focus is going to be on how this man, a contract employee, was able to enter the facility with a black suitcase without any alarm bells going off. Whatever the results of the investigations, which the FAA of the US is spearheading, it is clear that they will lead to improved safety and security measures and protocols that would benefit not only the Chicago Department of Aviation, but the aviation industry in general.
We cannot, of course, talk about safety and security in the aviation sector without mentioning the two tragic events that affected Malaysian Airlines this year. The first concerns the mysterious disappearance of flight MH370 en route from Kuala Lumpur to Beijing on March 8, 2014, with 239 persons on board. This yet unexplained incident demonstrates the need for the aviation industry to enhance safety and specifically flight tracking equipment on all commercial aircrafts. So that even if the aircraft disappears from Air Traffic Control radar systems, there would be a separate and independent mechanism or system to locate it.
Of course, the above will require collaboration across the airline industry and between ICAO and IATA both organizations which, I am glad to note, are represented at this conference.
The second tragic incident was the shooting down of Malaysia Airlines Flight MH17 over Ukraine on July 17 of this year. Unfortunately, this would not be the first such incidence in the 100 year history of commercial aviation. The aircraft was said to be flying over a “ground war zone, using a flight corridor that was specified as ‘safe’ by both ICAO and Air Traffic Control.” All 298 passengers and crew on board the flight perished, 193 of them Dutch.
In fact, 2014 has been so far the deadliest year in air travel in recent years. An estimated 976 airplane passengers have been killed in crashes this year alone, according to Plane Crash Info.
Indeed, while crash fatalities have shown a downward trend over the last two decades, 2014 is an unusual contrast to the preceding year during which only 311 people were killed in plane crashes, the lowest total recorded since 1941. But of course, where human lives are concerned, one loss is one too many. Nevertheless, to put this in proper perspective, despite the gloomy death toll from air crashes this year, the number of casualties still remains about one-third of the victims of the dreaded Ebola virus that has ravaged some countries in West Africa in 2014.
In other words, is air travel still safe? The answer is overwhelmingly, Yes! Could it be made even safer? Definitely. And we’re working on it. That is one reason this conference is being held. As someone once said, “Flying isn’t dangerous. Crashing is what’s dangerous.”
The common denominator to all of these tragic events, in my view, is the human factor. In other words, safety and security begin with each and every one of us. Of course, the economic impact of these safety issues is huge. For example, Malaysia Airlines last week announced that it had recorded a net loss of almost $100 million in the three month period that ended June 30, $40 million more than the net loss it reported over the same period in 2013, according to the Wall Street Journal. This does not include Flight MH 17 shot down over Ukraine on July 17. So, no matter how we twist and turn it, safety and security are VERY EXPENSIVE. But investing in safety and security is not an option; it is mandatory in the aviation industry.
It is with this in mind that we at SXM recently concluded Phase One of the installation of what is considered “the most sophisticated security system in the whole Caribbean.” The system consists of ultra-modern, weather-tested CCTV cameras supplied by Bosch, a global leader in this field. Fourteen security officers and 13 Tower personnel have been trained in the use of these cameras.
Training is, of course, another important component of safety and security. A well-trained staff is not only motivated but is better equipped to deal judiciously with safety and security issues. And a well-trained personnel, working in an environment that is conducive to productivity and personal advancement, is certainly a safety and security asset.
That is why our approach to safety and security at SXM Airport begins with job security for our employees, while we engage in strategic and collaborative partnership with agencies such as the Police, Customs, Immigration, Fire Department, Emergency Operations Center, and other stakeholders to guarantee not just the physical safety of users of our airport and the integrity of our facilities, but also to ensure a passenger experience that is less stressful, more pleasant and exciting which, at the same time, would generate increased non-aeronautical revenue.
I am sure we would all agree that aviation is an engine of economic growth and social development all across the Caribbean and indeed the world. Some key figures, especially given the centenary celebrations of commercial aviation this year, would illustrate this better.
· On a daily basis, an average of more than 8 million people travel by air. In 2013, total passenger numbers topped the 3 billion mark for the first time ever, reaching were 3.1 billion. That number is expected to reach 3.3 billion in 2014 (which will be equivalent to 44% of the world’s population).
· About 50 million tonnes of cargo is transported by air each year (or about 140,000 tonnes daily). The annual value of these goods is about $6.4 trillion—or 35% of the value of goods traded internationally.
· Aviation supports over 57 million jobs globally and generates $2.2 trillion in economic activity.
· Global airline industry turnover is expected to be $743 billion in 2014, with an average industry net profit margin of 2.6%.
That net profit margin indicates how tough and competitive the aviation industry is. For the Caribbean, the profit margin is slightly higher at 3% although this continues to slide. At a recently held one-day conference to mark Caribbean Aviation Day in St. Thomas, Peter Cerda, Regional Vice President of the Americas of the International Air Transport Association (IATA), disclosed that the aviation sector supports 140,000 jobs in the region and contributes about $3 billion or 7.2 percent of the Caribbean’s Gross Domestic Product.
To bring all of this closer to home, a recent study by the Central Bank of Curacao and St. Maarten (CBCS), put the economic impact of SXM Airport on St. Maarten as follows: it said,
} The Princess Juliana International Airport and its users account for a total impact of 60% of St. Maarten GDP. (Repeat this for emphasis)
} The airport also accounts for 32.8% of GDP of the balance of payments/net exports
} SXM accounts for 7.5% of GDP of government revenues
} SXM is responsible for 52% of total employment. Let me repeat that last figure, 52% of total employment.
These are surely very significant statistics that show the importance of SXM Airport to the economy of St. Maarten. However, SXM is also the international airport for seven of our hub partners – Anguilla, St. Barths, Saba, St. Eustatius, St. Martin (which is the Northern part of our island), Nevis and Dominica. Can we imagine a day in which there are absolutely no flights into or out of Princess Juliana International Airport? That would be catastrophic – like Hurricane Luis – not just for St. Maarten but for all the other destinations I have just mentioned as well.
Such is the importance of the aviation sector, and in particular, of the Princess Juliana International Airport to the island that SXM is not just another gateway, but is actually the heartthrob of the island’s economy.
Aviation, as Tony Tyler, IATA’s Director General and CEO correctly said when he spoke about the centennial anniversary of commercial aviation this year, “aviation is a force for good.”
“And the potential of commercial flight to keep changing the world for the better is almost unlimited,” he said. “Aviation has always been a team effort,” Tyler said. “Growing and sustainably spreading the benefits of connectivity will require the industry, governments, regulators and local communities to keep true to the ‘all-in-it-together’ ethos that was the bedrock of that pioneering first flight. And we should be guided by the long-term interests of all whose lives are positively transformed by commercial aviation every day.”
I couldn’t agree with him more. In fact, as he pointed out, “the aviation industry re-unites loved ones, connects cultures, expands minds, opens markets, and fosters development. Aviation provides people around the globe with the freedom to make connections that can change their lives and the world.” In other words, aviation and travel bring countries and cultures together. Maybe some of you here today will find that next business opportunity or social media friend at this conference.
Bill Gates put it somewhat differently, when he said, “The Wright Brothers created the single greatest cultural force since the invention of writing. The airplane became the first World Wide Web, bringing people, languages, ideas, and values together.”
To maximize aviation efficiency in the Caribbean, as the theme of this conference suggests we do, we need to indeed bring our people, ideas, goods and services together by easing restrictions on intra-Caribbean travel. It is simply no longer tenable in the 21st Century that traveling by air from Trinidad to St. Thomas should be a journey of two days and more expensive than flying to Europe, the US or Canada! Even Columbus must have criss-crossed the islands faster and cheaper in his rickety sailing boats!
How do we prioritize safety and security to achieve greater connectivity between our islands? Some ideas were floated at the St. Thomas conference I referred to earlier, which deserve some attention. They include establishing a universal security screening procedure, as suggested by LIAT CEO, David Evans. This, he said would make the passenger experience better and be more efficient for the airlines, putting an end to forcing people off a plane so that they could go through security just to get back on the same plane.
Ticket prices could be reduced by lowering certain taxes. Panelists in St. Thomas concurred that most of the ticket price is actually taxes and fees that go directly to the destination’s government.
According to Eduardo Iglesias, Executive Director for Latin American and Caribbean of the International Air Transport Association (IATA), if taxes on flights were lowered, ticket prices could come down and thus allow more people to travel within the Caribbean, thereby spreading money throughout the region and boosting the region’s economy. He also called for the relaxation of visa requirements, which he said constituted another barrier to intra-Caribbean travel.
The shift towards boosting non-aeronautical revenue is one that we have embraced wholeheartedly at SXM because it is the way of the future at airports all over the world. Too many Caribbean governments consider airlines to be no more than “cash cows” they can milk to fix roads, finance government operations and pay for non-aviation infrastructure, etc. The high taxes obviously put the Caribbean at a disadvantage, and prevents us from competing with South America and other parts of the world where the passenger taxes are not as high.
At our Anniversary Symposium, which kicked off SXM’s 70th anniversary celebrations, world-renowned expert on airport and aviation development, Prof. Dr. John Kasarda, predicted that in a not too distant future, airports may have to pay airlines to bring passengers to their destinations. The theme of that Symposium was: “Leveraging your airport for non-aeronautical revenue and economic development.” This requires that we embark on a transformation of our city airports into airport cities. This is the direction we have decided to take at SXM. And we are ready to cooperate with other airports and destinations in the region to make sure that we reach that goal. The Caribbean has never been short of creative minds, so I am sure we can make it happen.
Let me conclude by urging all of you, especially those of you visiting us for the first time, to take advantage of this opportunity to experience first-hand the bargain duty-free shopping, the incredible gourmet cuisine, the cultural and environmental features, and the exciting nightlife our Sweet St. Martin island offers.
Thank you and have a very productive conference.