Juan Carlos Salazar, General Director of Civil Aviation of Colombia:
“THE FUTURE WE WILL HAVE WILL BE THE ONE THAT WE BUILD AMONG ALL, IN A PACT FOR AVIATION AND ITS KEY ROLE IN THE GLOBAL CONTEXT”
By Jeff Peet
1 What is the reality of the technological infrastructure available to Colombian civil aviation to optimize performance and ensure the safety of air traffic in your country and how does it compare with other places?
The CNS technological infrastructure that Civil Aviation has in its role as a provider of air navigation services is avant-garde and cutting-edge in the Region, recognized by the Air Navigation Commission (ANC) of the International Civil Aviation Organization – ICAO. Now, this capacity requires highly specialized personnel and we have been improving this through our Aeronautical Studies Center – CEA, which has simulation capabilities of automated control facilities. That is simulation of towers and control centers.
On the other hand, we have made a lot of progress in the deployment of ADS-B as a contributor in surveillance schemes that join a network of radars that guarantee surveillance in airspace of our responsibility; and in terms of communications we have an extended VHF range with digital communication capabilities. These capabilities require modern aircraft and Colombia has a renewed fleet of commercial passenger air transport aircraft. However, it is necessary to modernize a part of the fleet, particularly cargo that operates in certain regions, to be able to use all the ATM capacity that is installed. That is fundamental.
The next step, given the topography and location of the airports, is to move towards the concept of RNP-AR procedures to gain capacity, and we will focus there to ensure that the reactivation of civil aviation has a greater safety environment. That way, we willbe capable of facing the challenges that lie ahead with the reactivation of our sector.
2. In your opinion, what is the main challenge facing air transport, given that it is an area of the economy of shared responsibility between the public and private sectors?
At the moment we have immense challenges, which are intertwined in shared responsibilities, which is why we have proposed to the Region a collaborative leadership scheme, which brings together all the actors who could contribute to the elaboration of an air transport reactivation plan under a collaborative model, of a hemispheric nature and around the strategic objective of economic development of ICAO air transport. The main challenge is to regain the trust of consumers, health authorities, communities and other states, in order to motivate and cultivate demand again in times of economic difficulty. Civil aviation has managed to maintain public confidence in recent crises; it did it with civil aviation security after 9/11, it managed it with other pandemics that we have faced, it did so in the face of operational security, to such an extent that we achieved a level of confidence in the civil aviation system so that no one doubts its safety. All these efforts are recognized by the community, which has allowed us to sustain public trust at its highest level, thus favoring the development of the sector. Today this is a strength for the definition of lines of action that will allow the recovery of the sector in an orderly, safe and sustainable manner. Today we are facing the immense need for a plan, starting from a common scenario and knowing the risks that we must manage, in order to build a comprehensive roadmap, to meet the main objective, which is to regain the trust of consumers and motivate them to travel. The truth is that the health authorities took control of the governments’ decisions, seeking to stop, from their point of view, the expansion of COVID-19. First, limiting international operations and then, paralyzing the national operation of passenger air transport. However, it is important to point out that the origin of the problem was not in aviation as such: It originated as a matter of public health.
This is the reason why we must develop a joint scenario and a comprehensive route from collaborative work highlighting that, for the reactivation of the system, the most important thing is people, so ensuring bio-security conditions for the entire aviation community is essential. The value of solidarity, through responsible and supportive travel and communication, is vital to build trust in the air transport user and in governments again. We must contribute in an orderly and safe way to the decisive role of civil aviation, for the global recovery after the crisis.
3. What has been the decline experienced by air operations in connection with the current health crisis?
The performance of Colombian air transport has been affected by the International Sanitary emergency. During the first quarter of 2020, 8.8 million passengers were mobilized compared to 9.6 million passengers in the same period of 2019, registering 837 thousand fewer passengers, representing a decrease of 8.7%. However, the greatest impact is being reflected in the months of April and May 2020, a period in which 6.4 million passengers will no longer be mobilized compared to 2019, due to the restrictions imposed on air transport by mandatory preventive isolation measures, which translates into a loss of 55% of passengers during the first five months of the year.
4. Many anticipate that there will be a drop in the level of air operations, due to the current situation that the industry is going through. What strategies are you considering adopting to face this possible scenario?
It is important to mention that the cessation of activity in the world, not only in aviation, has an impact on transactions in goods and services, which affects future growth. Currently, there is a destruction of activity, and therefore demand, being an issue beyond aviation, aligned to the global economic environment. The value of aviation assets are penalized in all markets, where the value of airline shareholdings has fallen to record lows, driving investor appetite away from the sector and increasing risk from sources of financing. That same situation is transferred to aircraft manufacturing companies, maintenance providers and parts manufacturers. Likewise, airport concessions have reported the postponement of investments and considerable decreases in the value of their income; service providers for air navigation will surely have their own liquidity problems due to the decrease in the use of their services. Simple but painful, it is demand that guides the financial results of our industry, which implies a systemic effect. The current crisis has been divided into stages that we could call initial, reactive, reflective and propositional. We have heard in forums and meetings the following concern: If it is a public health problem, how does aviation contribute to solving it? And the answer lies in standardized bio-security protocols. We all believe that this is the key to open the doors and they are our letter of introduction to health authorities. Another question is: If global economic activity destroys demand, what scenario do we have? This allows us to identify transversal variables, externalizing them and decomposing them into their effects, to manage strategies, like this:
– The trust between air transport and public health must be strengthened, aviation must then work hand in hand with the health authorities, to be able to operate in a pandemic or endemic environment with COVID-19 where the standardized bio-security protocol is key.
– Air transport users feel uncertainty, excess of confusing information, the condition of constant infection risk and the affected family or business income. All that causes their intention to use air transport to be broken or postponed. We must define a way to change this perception through a successful communication strategy and together with the sectors to advance the value chain.
– The economic effects will remain for a time, not only due to COVID-19, but as a result of the preventive isolation decisions taken by the States and their remaining effects. Demand, as a consequence of the economic slowdown is affected and we must work on its overcome.
– Some actors in the sector will be financially more affected and the economic impact will be transferred to the supply chain, by airlines, schools, simulator centers, MROs, training centers or parts manufacturers and to certain sectors that drive or promote demand for aviation. It is necessary to work in a collaborative leadership manner to promote the productive chain.
– A digital world will prevail, generating cyber-dependency, the use of electronic media and new technological alternatives. We must harness all that potential to modernize the way aviation connects with users and delivers its services.
– Changes of ideals, of opinions or new tendencies that will generate different visions of the way of doing things about the post-COVID-19 era. Guidelines will be established to be collected from now on, for the benefit of air transport.
These variables generate trends that can be potentiated or mitigated. This will give us clarity to boost demand, adapt services and modify regulations where appropriate, taking care of latent risks such as those that would come from the resurgence of a new pandemic or if the current one revives, or if there is a failure in the regional or global governance processes, or if there is a severe error in aviation safety processes, or the lack of financing of civil aviation authorities, as a consequence of the fiscal crisis of the States or other variables.
5. Airlines from different countries have requested that some of the fixed costs they face even without being able to operate, be negotiated or, at least, postponed in light of the current emergency. Have you analyzed or implemented any measures to address this concern regarding taxes related to air traffic?
Colombia has used multiple tools available and within its reach to alleviate the financial aspects of private actors within the system, which have a tax scope by modifying the dates of contributions. The VAT (Sales Tax) was reduced from 19% to 5% for aircraft fuel and for the sale of air transport, and the tariff of 96 items related to aircraft was set at 0%, making the tax relationship with the State more flexible. Additionally, tax benefits were incorporated into foreign mega-investments in the aviation sector, which seeks to encourage foreign investment in the reactivation stage. It should be remembered that Colombia is one of the few countries that allows 100% foreign ownership of national airlines. As for airport services, we excepted the charge for aircraft parking and leases at airports operated by Aerocivil and some concessionaires joined this policy, in addition to extending the periods for the payment of certain collections. Financially, a line of credit was established through Bancóldex and Findeter. We are currently promoting at ICAO the fundamental role of multilateral banking in the strategic framework for the recovery of international air transport and requesting the holding of a meeting coordinated by ICAO, as part of the development of the financial sustainability focus area. With the conclusions of that initial meeting, a regional program or project oriented to air transport could be defined that considers the needs of the sector and is a deliverable of the Reactivation Plan proposed by ICAO, in the economic or financial area. All this under the concept that Air transport is hemispherical and essential for connectivity in Latin America.
6. Colombia is, from the point of view of commercial aviation, the pioneer country in Latin America, counting until today with the oldest airline still operating in the region, which speaks of a very early vision. How is your country ensuring to maintain the existing high standard of connectivity, in the sense that users can continue to have a network that serves as many destinations as those served today?
Aviation for Colombia is a fundamental need since it is the way to integrate the country. There are regions where it is the only mode of transportation with the real potential to connect the most distant places in our country. On the other hand, having three mountain ranges that go from north to south, the main cities find a way to get closer in aviation, since 14-hour trips by land become an hour by plane; and of course the global connectivity of the country, together with the service we provide to the States of the continent, which represent a Latin and Pan-American vision, are tied to our aviation. Thus, we see aviation in three layers, the social or essential call, this being the way to connect the farthest territory. There, we have a program known as Essential Air Services – SAE, supported by the state airline SATENA and in the regulations that we have implemented so that Aerotaxis can offer seats individually on unserved routes. Today the load to these territories is assured and in the near future, through our reactivation plan, their connectivity is assured at the end of the reactivation, neutralizing the spread of the virus. The connectivity between the main cities, which we call the trunk, will be the first to be reactivated, at the appropriate time, when the health authorities and the President consider it convenient, through healthy slots that will balance social distancing, the ability to manage passengers and in compliance with bio-security protocols. Finally, international connectivity, associated with the will of the partner State, will be the last phase to be reactivated, through secure air corridors, within the protocols and mechanisms that ICAO has been agreeing with the different States of the region.
7. Avianca has just announced an economic reorganization procedure under Chapter 11 of the Bankruptcy Act of the United States, to have a little more oxygen to its debts and “to continue to fly” when the current restrictions are lifted. What consequences can this decision have for Colombia and in what way are you collaborating to minimize the negative effects of what that airline already anticipates that could involve a reduction in its fleet and/or operations?
The framework of Chapter 11 as an instrument for the reorganization and structuring of airlines that has proven to be effective, and success stories such as United Airlines, Continental Airlines, American Airlines and, at another time in its history, Avianca are well-known. We have all confidence in the process and its restructuring. Investors, creditors and all those who are related to airlines today, must observe the great potential of air connectivity in Colombia, as well as that of trade, business, family relationships and tourism are successful bets in the medium and long term. Humanity has risen from these crises and activity has always returned and surpassed the scenario from which they arose. The passage of COVID-19 should not be different, and trust is what gives value to all airlines.
8. How do you value the role of the Latin American and Caribbean Association of Air Transport (ALTA), in the promotion, development and sustainability of the Latin American aviation industry?
ALTA’s vision, which we gratefully acknowledge, is to observe and integrate the entire chain of the system, which allows it to have a comprehensive vision and propose cross-cutting initiatives. Recognize that each actor has a different responsibility in the productive chain of the air transport service and, like all of us, we must pursue a common goal.
The economic reality of our sector is that the losses suffered will be recovered in the long term, and not at the expense of the system in the short term, and it is there that ALTA becomes an actor of the greatest relevance, since it contributes with the voice and representation of very important actors that are not always visible, but without which the system would fail.
9. What measures has the Colombian DGAC taken to ensure the adherence of the different industry players whom you control as authority in the field, to the environment?
The adherence to the sustainability standards of the International Civil Aviation Organization (ICAO) and the national environmental authority, are developed as an institutional policy. The aim is towards the Sustainable Development Goals in terms of mitigation and adaptation to climate change and the implementation of the noise balancing approach, activities carried out in conjunction with airlines under a strategic environmental plan for civil aviation focused on:
• Mitigation and adaptation to climate change: through the CO2 emissions action plan,
• Balanced management of noise levels: Protocol for the measurement and monitoring of noise levels• Carbon footprint diagnosis: Methodology for reporting fuel costs to the compensation and mitigation program – CORSIA.
We hope that in the post-COVID 19 stage, global concern for the environmental issue will become an even greater priority and in fact be part of global political decisions, where we must anticipate with programs to:
• End the renovation of the existing air fleet to take advantage of all modern infrastructure that benefits the environment• Deepen technical studies on best practices for airspace management and its application in complex airspaces• Green and smart airports, with a renewed infrastructure• Reconditioning and updating of improvements in the structure of aircraft, hangars, and environmentally sustainable projects.• Development of methodologies for reporting and diagnosing CO2 emissions, based on the need to update CORSIA’s vision
10. What is the forecast that you can make of the aviation industry in Colombia, in the region and even beyond, for when the current difficulties that we are going through are overcome?
Despite an economic slowdown with the impact on aviation we are seeing, this does not prevent us from affirming that the forecast for the Colombian aeronautical industry is positive. That rests on solutions that have been structured based on an understanding of the described scenario, its visible or latent impacts. We must internalize and understand all the work we have done to reflect on the crisis, developing scenarios, planning documents, bio-safety protocols for aviation and communication plans. All of the above allows us to advance to a proposed or reconstruction stage. It is no less true that the commitment to reconstruction is fundamental and requires a lot of work, effort and resistance, but above all perseverance. The future that we will have will be the one that we build together, in a pact for aviation and its fundamental role in the global context. Believing in that and having a common vision, are wise steps. Also, it is important to convince ourselves that we can forge the future and that it can be better for all thanks to aviation. Changing the trends of projected scenarios will only be possible to the extent that in the State-Industry-Airports relationship, common and transparent decisions are made. We urgently need to demonstrate the ability to provide safe travel to the health authorities, to make them more flexible. If we overcome that, what we must bear in mind are three fundamental elements of our sector and apply all efforts there: cultivate and grow demand, adapt services to public health demands and cyber-dependency, and prepare a flexible regulation to seek greater regional integration. From there we can prepare the new competition and competitiveness rules, to adapt to each of the diagnosed impacts and to develop the strategies to face them.
The aviation sector in Colombia has come up with the 2030 vision of the Strategic Aviation Plan, which is part of the “Transversal Pact for Transport and Logistics for competitiveness and regional integration” adopted as part of the National Development Plan 2018 – 2022. The aim is to continue with the vision of “Mobilizing 100 million passengers and doubling cargo transportation in a clear, competitive, connected, safe and sustainable institutional environment. The latter supported by renewed infrastructure, a robust industry and human talent of excellence as all of that is essential to provide the strategic guidelines of public policies required by air transport. Only in this way will we be able to cushion the repercussions of the COVID-19 outbreak on the aviation and tourism industry. Thus, without ignoring the effects that the crisis will generate on strategies in the short and medium term in an uncertain scenario such as the one we are experiencing today, the speed in the recovery of air transport in the world depends on maintaining that 2030 vision. Today that becomes an even more ambitious challenge, because we must redefine the actions, without changing the objectives that are more valid today than before the crisis. This means that in Colombia, we continue to bet on mobilizing 100 million passengers and doubling air cargo transport, by 2030!