Policy Perspectives

Policy Perspectives

 “Runways to the Future:  What’s Ahead for Aviation”

Frederick W. Smith, Chairman and CEO, FedEx Corporation

U.S. Chamber of Commerce Aviation Summit – March 7, 2019

 

Thank you so much for having me here today. Before I get started, let me show you a short video.

 

 

The video helps explain not only what FedEx encompasses within the global economy, but also shows FedEx’s growth over the last 45 years, which parallels that of the aviation industry in general.  Many of the companies you represent have made enormous contributions over those four-plus decades, and together we can celebrate our collaboration and accomplishments.

Today, though, I‘d like to spotlight what’s to come.  The future of aviation faces many challenges, but, on balance, we’re evolving the industry for the better and making more things possible for people everywhere.

In particular, I’d like to focus on:

  • Great new technologies that enhance efficiency and safety
  • The evolution of the air traffic control system and NextGen; and
  • Several trends and challenges we must address to ensure a golden future for our industry.

 

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First up is innovative technologies.  We all know the world turns on innovation.  From cave dwellers rubbing sticks together to make fire a million years ago to you ordering a backyard fire pit on your mobile phone today, innovation has sparked changes that, for the most part, have made our lives more convenient, prosperous, and hopeful.

Certainly innovative technology has done that for our industry.  Since the beginning of the jet age in the late 1950s, improvements in aircraft bodies, engines, and electronics have created an evolutionary flow of better, safer planes.

Back in 1973 when FedEx began operations, the engines on the Falcons we used were considered breakthrough technology, and they enabled us to deliver overnight.  Beginning in the early 1960s, improvements to the jet engine have lowered fuel consumption, noise, and emissions.  While the progress in the early jet days was impressive, the intervening years have been downright dizzying in the scope and pace of change.

New things are happening to the body and engine of the airplane itself.  In fact, modern airframe design has advanced at a greater pace over the past 15 years than in the previous 60 years of standard design.

  • Regarding recent engine design, we’ve transitioned from three engines to two. We’ve doubled engine thrust, but decreased fuel burn by 50% and, amazingly, lowered noise by 95%.
  • In the future, look for the introduction of battery technology that will result in hybrid engines just like we see in automobiles. You’ll also see more 3D parts for engines and sensors to provide real-time data on safety and efficiency.
  • Todays’ aircraft bodies are increasingly constructed of composite material. Such material combines two or more dissimilar substances that, when used together, create better properties than the original materials achieve on their own. Composites include such materials as fiberglass, carbon fiber, or epoxy resins among many others.
  • The increased use of composites provides better durability, lighter weight, and reduced maintenance costs. Plus, composites are more fatigue and corrosion resistant.
  • FedEx looks forward to the next generation Boeing 777FX aircraft. Boeing will replace the aluminum wings with composite material. These new wings—it bears repeating—will be lighter, sturdier, more crack resistant and, best of all, more economical. Music to my ears!
  • How do we make sure the design of new planes is viable before manufacture and able to withstand the workhorse demands of the real world? Fortunately, gone are the days of drafting tables and full-sized, costly metal mockups. Instead, with new modeling technology, engineers put parts together in a computer simulation to test them before manufacturing begins. Using the three-dimensional solid images generated on the computer, airplanes are preassembled to position parts correctly, ensuring a proper fit. Like a “spellcheck” device for airplanes, the computer tells engineers if parts don’t fit. This new technology saves substantial cost in the long run and creates a safer aircraft.
  • Whether it’s additive manufacturing, advanced aircraft design, big data, computer modeling, or high temperature materials, the technology floodgates are opening with many positive design impacts on aircraft going forward.

Regarding safety, we as an industry are creating better safety technology and training every day. With industry meetings such as InfoShare and the A4A Safety Council, we identify shared risk issues and learn from each other’s experiences to standardize best training practices and identify future technology needs.

 

FedEx is pursuing important innovations that make our pilots and flight operations safer.

  • A big enhancement FedEx has installed on our fleet is our Magic Window. It’s in response to FAA regulations requiring that a pilot see the airport environment to land or taxi. Often fog, haze, rain, or snow prevent such visibility. Magic Window uses an infrared sensor to show a daytime-like image of the airport environment on a heads-up display.  With them the pilot can see to land safely, even in low visibility conditions—thus reducing flight delays and diversions.
  • One technology we have pioneered is what we call the Smoke Assured Vision Enhancement Display or SAVED. Using high-resolution video glasses installed on the pilots’ full-face oxygen masks, the SAVED technology displays such things as altitude, airspeed, and other information to help the flight crew land an airplane safely in the event of a cockpit smoke emergency.
  • With the increase of lithium ion batteries in our cargo, we decided to go above and beyond regulatory requirements when it comes to potential onboard fires. We developed an enhanced fire suppression system that detects and suppresses fires in the main-deck cargo compartment of our freighter aircraft. It’s an additional layer of safety technology for wide-body, long-haul flights.
  • Watch for other new safety technology such as advancements in fatigue risk management and mobile technology platforms that improve training for flight crews and mechanics. Such enhancements are stepping stones to aviation’s core value of safety first or as we say at FedEx, “Safety Above All.”

Moving on from technology to air traffic control, let me start with a bit of history.

After World War II, as commercial aviation developed in the U.S., aircraft were powered by piston engines, and navigation was dependent on radio stations on the ground or on navigation by the stars over the ocean.

  • As the airlines transitioned to jets, the navigation remained largely unchanged, relying on ground stations for in-flight navigation and even more precise ground transmitters to fly instrument approaches through low clouds and fog to the runway.
  • Like the ground-based navigation systems on the aircraft, air traffic was controlled through a ground-based system of radar bouncing a signal off the aircraft and through radio conversation between pilots and controllers.
  • Because of the inaccuracies in the radar system, the separation between airplanes vertically and horizontally had to have “wide margins,” so to speak.

 

Several years ago, as the U.S. GPS constellation of satellites was put into space and digital communications were becoming more reliable for aviation, a broad upgrade plan was developed between the industry and the FAA to take advantage of these new technologies. The U.S. plan was named “NextGen” for the “next generation” of air traffic control and management.

  • NextGen is a broad umbrella that covers communications equipment dealing with voice and text as well as navigation surveillance—how controllers and pilots “see” airplanes on their displays.
  • It also deals with the sophisticated traffic management tools to merge the large streams of traffic departing and arriving in key metropolitan areas.
  • These tools range from predicting demand to managing active traffic down to the minute. The airborne tools help control aircraft separation while allowing each plane to optimize its speed and descent to save fuel and CO₂
  • According to the FAA, time-based flow management has saved the industry almost $1.4 billion. More precise navigation, known as “performance-based navigation” has saved more than $2 billion, and reduced aircraft separation has saved $575 million.

The airline industry has committed to NextGen by spending hundreds of millions of dollars equipping their aircraft, including retrofitting legacy fleets, and training their crews in the equipment’s use.

  • In some cases, fleets have been modified and then retired before fully exploiting the new capabilities due to delays in updating corresponding equipage on the ground. By this I mean that the aircraft’s updated technology must be complemented with corresponding redesign of airspace and air traffic procedures as well as international agreements to ensure inter-operability when airlines fly overseas.
  • These issues are complicated by the funding choices of the U.S. government which make long-range investment planning hard, if not impossible.
  • The use of continuing resolutions versus a multi-year budgeting process and the recent government partial shutdown contribute to the challenge of deploying NextGen.
  • Complicated environmental impact studies for noise have also contributed to the extensive delays. The precise ground paths delineated by GPS navigation mean more aircraft can fly over the same neighborhoods, resulting in noisier conditions.

Maximizing the benefit from NextGen for safety, on-time dependability, and e-commerce growth will take continued partnership between industry and government, technology innovation, and a joint will to work through the myriad political and environmental challenges.

We believe it’s very important to treat NextGen as a nonpartisan effort for the common good. Let’s take a holistic rather than a piecemeal approach.

  • The FAA has estimated that full implementation of NextGen would deliver more than $160 billion in benefits by 2030
  • Under Michael Huerta’s leadership and continuing under Acting Administrator Elwell, the FAA has done an excellent job of lining up the modernization pieces and preparing it for implementation. Now we as an industry must support the FAA and let our government leaders and the public know how important NextGen is in achieving the best aviation system in the world.

Finally, we must address several challenges and trends to keep our industry flying high.  The first challenge is the pilot shortage, due to pilot retirement, industrywide fleet expansion, the rising cost of pilot education, and the need for some regulatory reform to acknowledge other established training pathways.

FedEx is initiating a new, industry-leading pilot development program to ensure a full pipeline of pilots for us and the industry at large.

  • It’s called Purple Runway and will assist our feeder operators with the recruitment and retention of pilots who wish to develop their skills and experience to eventually qualify for opportunities at FedEx.
  • We’ve also debuted a collaborative program with selected colleges and universities to promote student interest in aviation careers. Feeder operators will hire entry-level pilots from these programs.
  • Accompanying these efforts is a scholarship fund that reflects our commitment to providing increased employment opportunities in aviation.
  • Aligned with our career development efforts, in late 2017 FedEx announced a purchase agreement to buy 30 large turboprop ATR 72-600Fs over a five-year period beginning in 2020.
    • These feeder aircraft will be customized for FedEx with a forward large cargo door, a rear upper-hinged cargo door, digital cockpits, and other advanced avionics technology.
    • These aircraft have the capability to take containers and will help us better serve the air freight segment where palletized shipments are the norm.
  • Soon afterward, we announced a similar agreement to buy 50 newly designed Cessna C-408 SkyCourier turboprop aircraft, with options to purchase up to 50 more. These twin-engine aircraft have almost twice the volume capacity of the single-engine Cessna Caravans now in our feeder fleet. They will mean even faster service to air freight customers shipping to or from smaller markets.  All these modern FedEx feeder airplanes will enable us to provide top-notch career pathways for the transport pilots of the future.

 

Our efforts to modernize our feeder fleet further complement the upgrades we’ve made in our trunk fleet.

  • These new aircraft increase reliability, safety, and fuel efficiency as well as lower emissions. As always, we work hard to minimize our environmental footprint.
  • For example, the Boeing 777F delivers an 18% reduction in fuel and emissions over our venerable MD11F, which it is replacing.
  • These upgrades enable more nonstop international flights, allowing us to serve more markets and shorten our delivery-commitment windows. (ID slide)

 

The third trend that will help define aviation’s future is the use of alternative, non-petroleum fuels. It’s crucial that while we modernize our fleets with more fuel-efficient aircraft, we also pursue alternative fuels that wean us away from petroleum.

  • FedEx continues to work with the FAA, the Department of Energy, and the Department of Defense to support the development of alternative-fuel standards.
  • With the support of the U.S. Navy via the Defense Production Act, we are working with Red Rock Biofuels to deliver alternative fuel to our Oakland Hub in 2020. And we continue to support the emerging alternative fuel companies as they transition from development to production facilities.
  • All this is part of what we call our 30 by 30 alternative fuel initiative, which seeks to source 30% of our jet fuel usage from alternative sources. ­We’re making great progress toward our goal as demonstrated by the recent flight of our Boeing 777F Ecodemonstrator, which used 100% alternative fuel.

 

At FedEx, when we look at our aircraft, we also see global trade, which we enable every day through our unmatched worldwide networks.

  • Continued open access to international airports and markets is fundamental to the economic growth of our country and our companies.
  • We work hard to ensure the U.S. remains committed to its Open Skies agreements. They provide opportunities for global customers just as domestic deregulation has provided opportunities for our citizens.

Like Open Skies, trade agreements create more possibilities for our customers and encourage job growth here. Trade stimulates innovation and helps small businesses reach new customers everywhere.

  • Our business community needs to continue to highlight the investments and job gains resulting from global trade. We must make sure lawmakers champion those benefits as well.  Trade is a great story, confirmed by history and full of potential for our future.
  • I hope the organizations here today will stand with FedEx in support of practices that create a more accessible world for everyone.

 

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Aviation is a force for good and a source of opportunity.  It builds a more connected world, and a connected world is a better one.  I hope you’re as proud as I am of all the good our industry does and the outstanding people who do it.  Through unity we’ll make even more progress.  Let’s head down the pathways of innovation together toward a brilliant aviation future.

 

Thank you.