Skip to main content
main content, press tab to continue
Article

Part two: The Airport Risk Community (ARC) on talent, technology and transformation

By Darren Porter | January 2, 2024

ARC members met in London in November to discuss how the industry is evolving and how the insurance sector is working to support the changes. Part 2 of 2.
Aerospace
N/A

The 2023 Airport Risk Community (ARC) Conference in London in November attracted expertise from across the industry. Airports are currently in flux, trying to work out how to respond to new technologies and new risks while balancing their responsibilities to their local communities, stakeholders, regulators and the traveling public. What emerged from the conference was that the industry very keen to make the most of the opportunities ahead.

This is the second of two articles that brings together some of the key issues that were discussed under this year’s theme of talent, technology and transformation.

Enhancing the efficiency of what’s already there

While the challenges of an emerging sector are fascinating, so are the challenges that arise from managing existing aviation infrastructure. Offering perspectives on modernizing airspace, Dave Curtis, Safety and Sustainability Director at the UK’s NATS, discussed the importance of engaging with emerging risks such as eVTOL even though they complicate an already crowded set of skies. He highlighted just how crowded with a short video that showed London’s airspace over a 24-hour period.

It is not just about accommodating new forms of transport though. Curtis pointed out that modernizing the way airspace is deployed across countries like the UK could be another step in the aviation industry achieving its carbon emissions reduction targets.[1]

He was joined by Dan Edwards, Head of Master Plan Delivery at the UK’s Airspace Change Organising Group (ACOG), a UK Government backed initiative to coordinate the delivery of key elements of the UK’s Airspace Modernisation Strategy. Reflecting one of the conference’s recuring themes of aerospace as a complex ecosystem, Edwards discussed how slow the process was, but also signaled the need to carefully model every change on every stakeholder as the UK airspace modernizes its technology. He also pointed out that despite the impatience to move the project forward, the financial, regulatory and political risks of getting the modernization process wrong would be significant.

Jon Round, Head of Airspace, Air Traffic Management & Aerodromes of the UK Civil Aviation Authority, joined Curtis and Edwards on stage and echoed the appetite for change within the industry but reiterated the need to proceed with caution. The industry needs to ensure that airspace changes meet existing requirements as well as new entrants such as low-level aircraft like eVTOL and drones, and potentially high-level vehicles such as spacecraft.

The aviation industry’s environmental responsibilities

One thing was clear across both days of discussions, airports are not shying away from their responsibilities to the environmental challenges that face society. Several were discussed during the sessions, including the need for standardized reporting so that organizations can give themselves clear, reportable objectives.

WTW’s David Smith and his team in Catastrophe and Climate Risk Management, took attendees through the diagnostic, value at risk and engineering tools they use with clients that help with both understanding, disclosure and transfer of risk.

You have to learn how to walk the walk before you can talk the talk”

Mark Edwards | Head of Sustainability, Gatwick Airport

Reflecting on an airport as an ecosystem of several interdependent organizations, Mark Edwards, Head of Sustainability at Gatwick Airport, noted the complications that could arise when trying to implement environmental enhancements. In the case of ground handlers, for example, their contracts are with the airlines not the airports, complicating the process of change. His approach, was to lead by example, highlight the benefits and sometimes encourage a little competitive tension between different organizations. “You have to learn how to walk the walk before you can talk the talk,” he observed.

Giving the perspective of the airline sector, Rhett Workman, Managing Director, Strategic Performance and UK Operations at American Airlines, pointed out airlines can only move as fast as the technology. With the aircraft that are being delivered today still likely to be in service by 2050, the aviation industry has to make sure it is doing lots of little things to reduce the industry’s impact on the climate.

we are going to have to learn to collaborate a bit more if we are going to meet the environmental challenges ahead”

Rhett Workman | Managing Director, Strategic Performance and UK Operations, American Airlines

As he pointed out, airlines and airports have to work together because they are two sides of the same coin. He suggested that the airline sector might need to change its instinctive mindset if it was going to meet the challenges of climate change. “This is a very competitive industry, but we are going to have to learn to collaborate a bit more if we are going to meet the environmental challenges ahead.”

Sam Day, Head of ESG Analytics at AXA XL, offered an insurance perspective on how the sector is using data to understand the accumulation of risk that is emerging from the environment challenges the aerospace sector faces. He explained, while there is a lot of data out there, it was showing new relationships between different factors which could help enhance risk management over the next few years.

The insurer view

The final session of the conference saw Oyin Heath, WTW’s Global Head of Aerospace, lead a panel of underwriters to discuss airport risk in a changing market landscape. The debate was far-reaching, adding an insurance perspective to many things that had been discussed during earlier sessions in the conference. The key theme that emerged is that the insurance sector is both willing and able to support change, but the more the ramifications of change are understood, the easier it will be for the insurance sector to support it.

Rachel Barrie, Group Chief Executive of Global Aerospace, outlined the challenges the changes to airport ecosystems had created. She highlighted the rapid and sudden increase in demand at airports as the post-COVID-19 recovery process has continued, suggesting while airlines had embraced safety management systems, airports had potentially been slower in their adoption. She also discussed specific aspects of airport infrastructure challenges, mentioning a study by the World Economic Forum that estimated that by 2050 airports could need between five and ten times more electricity than they do today to support alternative forms of propulsion.[2]

We are very good at dealing with what’s predictable, but the unpredictable is the difficulty.”

Rachel Barrie | Group Chief Executive of Global Aerospace

Reflecting on the interaction between aviation industry and the insurance sector, Barrie suggested “We are very good at dealing with what’s predictable, but the unpredictable is the difficulty. Airports have to look at a broad range of issues, but if we can get the predictable under control, that gives everyone involved a better chance of dealing with the unpredictable.”

Jérôme Notton, Global Product Leader Aerospace at Allianz, suggested that the challenges facing airports had evolved considerably over the last four years, agreeing with several other speakers that while the volume of staff had kept pace with the recovery, the level of experience that had been lost during the pandemic was a concern from a risk perspective. He also reflected on the fact the majority of the challenges that face the industry do not really have any borders, but the increasing availability of data was making it easier for insurers to support the industry.

Dan Crispe, Head of Aviation UK at Starr Insurance Companies, pointed out that while there were concerns about the volume of traffic, extreme weather and the addition of technology from a risk perspective, there were also opportunities and the insurance sector was very supportive of change. “We need to make sure that there are detailed plans, because risk is evolving and what was once a one in a 100 year event has become a once in 50 years or even once in 25 years.”

The role of the insurer is key, a financial safety-net and it always needs to be there”

Simon Abott | Head of Aviation, Chubb

Reflecting on the recurring themes of security, safety and climate risk that arose throughout the ARC conference, Simon Abbott, Head of Aviation at Chubb, suggested responses needed a holistic approach, but that is easier said than achieved. Abbott reiterated the need for collaboration between stakeholders across an airport and with risk partners but also the need to remember the primary risk that needed to be managed. “The role of the insurer is key,” he said. “It is a financial safety-net and it always needs to be there. Even with the other emerging risks, the biggest threat that remains to an airport’s operations is a major aircraft accident.”

ARC’s fourth conference drew together leaders from across the airport sector as well as thought leaders from several adjacent industries. It offered a superb opportunity to hear perspectives and opinions from a range of experts and suggested that while conditions are changing and risk is evolving, the many facets of the industry understand how to move towards the brighter skies ahead. In addition to the topics covered in this article, part one offers an overview of the opening address from Toby Harris, Baron Harris of Haringey, as well as looking at the role of airports in the community, the talent challenges facing the aerospace sector, and the fascinating discussions around the placement of vertiports and drone ports for electric vertical take-off and landing (eVTOL).

Footnotes

  1. NATS deploys once in a generation airspace upgrade, NATS. Return to article
  2. Key Investment in Airport Infrastructure Needed Now to Meet Demand for Hydrogen and Electric Aircraft by 2050. Return to article
Author

Managing Director, Global Aviation & Space

Contact

Pat Doherty
CEO, Australasian Aviation Division

Related content tags, list of links Article Aviation & Space Aerospace and Space
Contact us