Central to Aviation: Conversations with Eammon Brennon, Dir. General of EUROCONTROL

View the complete conversation between Eamonn Brennan, Director General of EUROCONTROL, and Daniel Baker, CEO of FlightAware, as they ponder the aviation industry's future with an eye to: Sustainability Efficiency Survival vs. thriving in a post-COVID world

DANIEL BAKER Hi, everyone. Welcome to FlightAware’s Central to Aviation: Conversations. Today, I have the distinct honor and pleasure of speaking with Eamonn Brennan, Director General of Eurocontrol, about sustainability, efficiency, and a longer term view as well as survival versus thriving in a post COVID era that we hope to be in sense. Eamonn, thanks so much for taking time to do this.

EAMONN BRENNAN Great to be here and good morning to everybody on your side of the pond. I hope everything's working out. So hopefully we'll have a good chat, Daniel.

DANIEL BAKER Yeah, absolutely. You know your background that reminds me that I've missed the annual Eurocontrol user forum that I think is, is January of every year, in your office in Brussels. I imagine that I'm not the only one there. How are things going at Eurocontrol?

EAMONN BRENNAN We’re the same as everybody else but just for introduction for Eurocontrol you probably know we've got 41 member States. So we manage the network for basically all of Europe and we do the sustainability, the environment, but also we collect all the fees for all the air traffic controller organizations. So you can imagine with the traffic being 70% down in the last year, everybody's getting a little bit excited about financial matters and these are problems we're facing at the moment. We're in the middle of a wave. So it's difficult.

DANIEL BAKER Yeah, I understand. You touched on sustainability, which is one of the things I think would be interesting for us to talk about. That's a major initiative for Eurocontrol. Many of us know that you recently appointed Marilyn Baston as a head of sustainability, I believe it's a new role and a testament to how important this is to you and Eurocontrol. And of course it's reflective of the thinking throughout Europe. So, but can you tell us a little bit, what is the focus of this? Is this around distribution availability of things like Sustainable Alternative Fuel, SAF? Is it about enabling airports for an airspace for hydrogen or electric aircraft? Is it efficiency focused? What are you working on there? And what's Marilyn really, taking charge of?

EAMONN BRENNAN Okay. So, that's a really good question Daniel. And it's kind of a very wide question. So I think it'd be better if I just looked at a startup that the kind of start, first of all, as you're aware, they, they, there's a global initiative called core SIA, which has been run by ICAO, which is effectively a carbon trading scheme. And in Europe we have a thing called the emissions trading scheme, which is kind of a European, slightly more severe version of that, but effectively it's carbon trading, it's offsetting. So what we're working on in Eurocontrol is basically on two fronts, one, we're looking at trying to make the air topic management network more efficient. And here we're looking at things like efficient routes of vertical flight profiles, trajectories, a lot of the stuff, actually, some of your products actually offer to people. Well, basically we're looking at how we can make Europe better because people have been flying the same routes for maybe 40, 50 years, the same happens in the United States actually. So that's the first thing. And then the second thing is we're looking at what can we do to improve?

EAMONN BRENNAN And we're working very closely with Airbus and with the commission to improve aircraft design in terms of, you know, what I would call blended wing, but also hydrogen electrification. And of course, SAF, and there's a huge push on at the moment to promote SAF in Europe. But it's just a big debate because people see SAF as a long-haul solution and maybe electrification and hybrids as a short term.

EAMONN BRENNAN So that's what we'll work on the whole rennet. At the end. Of course, we report on everything to everybody. At green deal in Europe is really important at the moment. You know, Europe is an amazing place because they've concluded that the most efficient form of carbon neutral transportation for everybody is a bicycle.

DANIEL BAKER Yeah. I know. I can believe that he touched on routes. Which is interesting. We worked on a project and continue to with an airline that's really recognizing that just because it was the way they did it before doesn't necessarily make sense. And I think one of the ironies is you can invest in a very sophisticated flight planning engine, for example, and find the most optimal route from a fueling perspective, but it might surprise you that if you make a list of the 10 most efficient routes, and of course you filed the first one, you might find out that due to air traffic control restrictions or due to other factors you end up, if you file number one, flying number seven. Right? And so we've worked with carriers to be able to identify what they filed versus what they flew, how frequently that deviation is. And they might ultimately realize if you filed the second most efficient route, you'll actually get to fly that, which is far more efficient than trying to over-optimize. And so the problem is a little more complex than people think because, we're flying in the real world, right? We're not flying in a flight planning engine. And I think that's even more the case in Europe where the airspace is so much more complicated than the U S with all of your member States. So, do you work on that much as it relates to the cross border policies for handoffs and those sorts of things to help operators optimize even further?

EAMONN BRENNAN Yeah. I mean, that's actually one of our key functions, Daniel. I mean, just to help, if you fly anywhere in Europe, you need a green light for what we call the network manager here, so that your route is, is, you know, secure from A to B. So if you want to fly from say London to Athens, you know, we've taken all the steps through and we to work out the routes. And of course we know the fuel and all that, but what you say is very true because every operator files for the best plan, that's normal.

EAMONN BRENNAN You have to fight for what you think is the optimum routes in terms of a great circle, in terms of fuel, in terms of horizontal efficiency. But when it comes to us, we probably are not in a position to offer you that because everybody wants this at the same time. So, everybody wants to leave London at 6:40 London time in the morning.

EAMONN BRENNAN That can’t happen. And then you've got the complication of North Atlantic arrivals coming in. So what we do basically is we report a thing which is commonly known as a restriction, but the pilots call it slots. And consequently, we got a bad name in Europe because when you hear from Eurocontrol early in the morning, it's generally not good news because we’re trying to correct the system.

EAMONN BRENNAN So it is true what you say that I think sometimes if you have some of the airlines had a product and if they looked at maybe benefits. Smart and gaming the system a bit better and looking for route number four and number five, they might actually get that, but they all take the view of cascade, go the whole way down and they leave it up to us.

EAMONN BRENNAN And we do come under pressure in the morning. I'd say about six to eight, just to move 10. So we will just move people everywhere. And then the other thing I just want to mention here is we also lever cap a lot, Daniel, which is not good for the environment. So we were often operating, say eight, three twenties around the central of Europe at say flight level one eight, zero, 18,000 feet.

EAMONN BRENNAN And that of course is a lot of fuel burn. So I think you can invest in making sure that you fly more efficiently by looking actually at the part winds and using big data to actually look at this because you just randomize everything and always look for the best, your records, your teacher, that I've actually is not possible.

DANIEL BAKER No, that's right. And I think you touched on, you know, you can get bad news that you’re going to be delayed in the morning and the reference to slots. I agree completely. People need to recognize that - in the U S we call that ground delay programs. No one wants a delay, right? Whether you're the regulator or the operator or the passenger, but we can all agree it's far more efficient to be sitting at the gate right on ground power, no engines running, then holding over an airport, right? Burning fuel, putting wear and tear on airplanes, putting stress on the crew. And so the reality is there's a limited amount of runway and space. And so I think optimizing that is a key thing.

DANIEL BAKER And, you know, we've actually worked on that a bit ourselves. Our information tools are a building block for some of this. You probably know a bit about our Predictive technology Foresight, it's having an impact in Europe. One of our launch customers was actually Fraport. And so their airport operations in Frankfurt, which they have a large sustainability initiative, leverages our data to do a stand in gate allocation and predictions around aircraft movements, which aligns exactly with the thinking that you're talking about now.

EAMONN BRENNAN Yeah, it's good. I mean, the stuff you’re doing with Fraport is actually very innovative, Daniel, in terms of managing the arrivals and looking at what the real time situation is, I mean, the reality is that airports can actually help themselves a lot. Let's just go back to the basics. I mean, In the last 10 years, we've reduced air holding by 80%.

EAMONN BRENNAN So that's fantastic.

EAMONN BRENNAN Basic foundations is we keep you at the gate. We won't let you move back unless we can get you in. And what we're trying to do, things like continuous descent, arrivals, even in small sectors in Europe to save CO2, but also the passenger experience. I mean, it might be uncomfortable to be left at your gate, but it's a lot more uncomfortable to be circling around that flight.

EAMONN BRENNAN Over an airport, maybe in convective weather or something like this. So the more prediction and the more information the airline has, but also the airport. I think the stuff you're doing with Fraport integrate the data there is actually very useful to make sure that the actual airport operational particularly for stand allocation and use of taxiway.

EAMONN BRENNAN And this is really good. So we think that's pretty good.

DANIEL BAKER We're excited about it. And you touched on, on weather. I'm not sure if you've heard about this. We're we're really excited. So of course we have a global network of ground-based Mode-S and ADS-B receivers. And so we've been using that for flight tracking for years, we're using that to support surface movement and Predictive, but we have a new partnership with a company called Synoptic.

DANIEL BAKER And what we're doing with them is, we're aggregating all of the weather data that we can receive and derive from aircraft. So our aircraft is the Mode-S or emitting more than just positional data. So we can figure out things like winds and temperature and pressure. And as a result, we're able to aggregate all of that, provide that to them and they're using it to do better forecasting. And the bottom line is once you have really sound truthful data, this can be used by companies in myriad applications. It can improve lives, not only for flight planning, not only for ground operations, but more broadly across both aviation and outside of aviation for forecasting. And so it seems like we're really able to exploit this to have a really, really big impact, which is exciting.

EAMONN BRENNAN Yeah. That's good Daniel, I was a former pilot. So, weather is really important, we all know this and if you look at, for instance, we're getting real time weather information. I think particularly if you're using satellite-based weather systems and the Mode-S stuff is pretty standard at this age, but it really is good if you can put it in together in a package.

EAMONN BRENNAN I mean, you know what my experience with whether is that in Europe, it comes on us pretty quick. We have situations where, whether it would develop in the core area of Europe and then you've got a problem straight away because your options for diversions are actually quite limited because we don't have a lot of airspace. in the United States, you're actually better at weather than we are in Europe, because you've got more space.

EAMONN BRENNAN Here, if I've got a storm over Paris, then I've got to either move aircraft out to the Atlantic or I move over to Switzerland and you know, both of those are pretty tricky options because they're both high density routes.

EAMONN BRENNAN So, you know, predictive weather data is very useful, particularly if a guy decides to himself to kind of move away from it before he realizes that he's in trouble because real-time action is much more difficult for air traffic control.

DANIEL BAKER Yeah. No, that's absolutely right. I agree with your point about just the complexity of Europe and density. As we’re talking about efficiency and kind of scarcity of airspace, you do touch on one really big issue that is key to sustainability, which is efficiency. And efficiency has really been the core technical focus of FlightAware.

DANIEL BAKER I think in an irony we've seen over the last year, is that despite a reduction in demand for travel and more airspace availability, more airplane availability, we've actually seen a greater demand for this sort of efficient technology during COVID, I think because there is a scarcity of resources, there's more concern about the economics of operating aircraft.

DANIEL BAKER And we've been able to make a big difference. So there’s a number of players in ATFM. There's a really small number of big players, Eurocontrol being one of them. When we talk about the small regional players, there's companies like Metron, right? They focus on regional ATFM markets.

DANIEL BAKER And this is regional sort of to the same point you're making about complexities in Europe around weather, it requires a lot of cooperation, right. Cross border cooperation. So we actually announced the partnership with Metron a few months ago, and they're using our global dataset for use in these regional and cross-border ATFM applications, what do you see the impact of that sort of initiatives, these sorts of applications being for regional and integrating with some of the larger ATFM operators like Eurocontrol?

EAMONN BRENNAN Okay. So Daniel, I know Metron, very well. When I was in the Irish Aviation Authority, I worked closely there with Monte Belcher and all these guys from the FAA that used to be there in Metron. So their products are pretty good. I mean, what I would say generally about ATFM is the fact that we've started to move to satellite-based and here in Eurocontrol, we've integrated for instance, and I know you have the same product, we've integrated Aireon flight data. I formerly was a Director there.

EAMONN BRENNAN And we've integrated that into our ATFM system. So we now have kind of got global reach, we look at an aircraft shortly after it leaves Singapore. We look at when it hits European airspace, when it ascends, we advise all the centers along the way to make sure that handle this right in this way.

EAMONN BRENNAN So what we're trying to do is maximize airspace capacity by using these predictive tools for planning better. Because if I could give you an example, Daniel, we've seen examples where, for instance, aircraft leaves say Gatwick and their flight to Milan, but we want them to go a certain way.

EAMONN BRENNAN And then what happens is when they take off, the pilot contacts their control center, and he gets his buddy, the controller to send him a different way because it's actually a little bit faster, but the reality is by him doing that, he actually has stopped and cost slot delays for others along the way.

DANIEL BAKER Right. Okay.

EAMONN BRENNAN So, you know, this is why we've got to enforce what I would call standard ATFM in Europe so that we maximize the overall system. We work very closely with the FAA’s command center. They're just outside Washington and with Terry Bristol's team. But there is scope definitely what I would call it for product in Southeast Asia and smaller areas, because some of them are developing things called time-based separation and other kinds of tools like this.

EAMONN BRENNAN But what I would say is that there's always a good system to plug into the big system because in reality, Daniel, you're probably not going to change the relationship with the FAA, but we have, because we have real time with the FAA. They have real time with us. So, we stop aircraft coming across the Atlantic if we can't have them in Europe, we've got weather and they can do the same with us. So it's important that two big players do like this.

EAMONN BRENNAN But in the world, they're the two biggest, but there actually really isn't anybody else doing the same kind of product. So I think there's great opportunity there and it will be very beneficial, particularly I think in areas like South America, also in North Asia as well. I think there's good scope there. But really it's gotta be integrated - your product has got to be able to plug into our product here, but it doesn't really the operator do much good if you can't do that and also with the FAA. So I think there's great opportunity definitely to do that.

DANIEL BAKER You know, I think one of the coolest things that I see in aviation addressing this problem is collaborative decision-making – CDM – which basically acknowledges that there's a lot of stakeholders here. You have the ANSP, you have the airports, you have the operators and many other stakeholders. And so CDM, which has a ton of different implementations across different stakeholders in different states and countries, really enables people to prioritize what's best for them. And then everyone kind of is collaboratively trying to prioritize what ultimately is best for everybody.

DANIEL BAKER When you talk about the US and Europe, as it relates to basically taking delays or enforcing limitations on capacity, how do you see these systems coming together in 5 or 10 years, so that there can really be what I would call souped up CDM. So that an operator in Europe going to the U S for example can have a say in that particularly the larger operators that have a lot of flights and are really a big factor in this capacity.

DANIEL BAKER So that's more than a blunt instrument and it ends up making it a better travel experience so that operators can focus on, for example, perhaps prioritizing the delayed flight, for example, and ultimately getting people where they want to go.

EAMONN BRENNAN Yeah. That's a really important issue. So what we're doing in Europe about it is we do use a blunt instrument at the moment, and the instrument we use is basically restrictions, slots, flight capping, all of these kinds of things. So what we're moving to in the future is collaborative decision making. And we work very closely.

EAMONN BRENNAN I mean, just at the moment to give you an idea of the complexity, the problem we've got, we're connected directly live to about 60 air traffic centers in Europe and Asia, but we're also connected to about 800 towers, airports, all of it. So first of all, straight away, you've got a big data management problem to keep everybody on the same track.

EAMONN BRENNAN So that's problem number one. So answering your solution for the future, what we've decided to do is invest about $300 to $350 million in a whole new system for Europe. It could be really one of the most advanced in the world that's using cloud-based technology. And the way we're going to get the collaborative decision-making to work is not going to be the old-fashioned way, phoning a guy and talking him around, we're actually going to use the cloud so that every air traffic provider and every tower will see the data that we have, and will see the basis on which we make the decision. So they’ll have an appeal basis. So to give you a good example, we've had, for instance, some of the larger airlines and I'll give you a good example, would be a flight from say, London Heathrow with Iberia going to Barcelona or going to Madrid. Now, if they're 10 minutes apart, often what happens is Iberia would want the flight to Madrid to take priority over the Barcelona one. Why? Because they've got connections. They're going off to South America. So the revenue lost from a slip up on that one is much higher.

EAMONN BRENNAN So this is what we were going to try and do was implement collaborative decision-making much more by giving everybody visibility, transparency. And this comes about by using cloud-based technology and interactive dashboards and this kind of thing. That's what we're going to roll out as part of our INM program.

DANIEL BAKER I think that's awesome. I think that having a broader cloud and more consistent approach is helpful because something that I've seen in the past is that there are so many CDM platforms that for example, US Airlines will implement a broad FAA CDM, but then they won't really have the resources to implement for example, one of the CDM programs in Paris. Even though they may fly there several times per day, they can't operate a hundred different programs. And so you end up saying, okay, only the largest airlines in their home country or airport are actually participating in CDM. And until it's adopted more broadly, there's not really that impact there. And so what's the timeframe for this, when do you think you'll be rolling this out and operators will start implementing it? So at the moment, Daniel, I mean, Big advantages we've got in Eurocontrol is we've got a lot of buy-in from the stakeholders. So at the moment we've got about 50, 60 airports networked to us for CDM, all the big ones. So straightaway, we see what they're doing, they see what we're doing, and we react to that. We're going to expand out that program to everybody. So by about 2025, we'll roll out the first version of INM.

EAMONN BRENNAN That would be provided free to basically everybody all over Europe. And the idea is that they will have a common platform. Now, the reason we think this will work is because it's such a large scale, it's going to be the only platform you actually should use because it'll have all the actual real-time information and it will have the ANSPs linked together with the towers together with the airport operators and also the carriers as well, the larger network carrier. So we're trying to get a good platform to make sure that this works, but we're actually going to be also very open in that we give access to this technology to developers or people who want to do front end systems. So to make sure that overall, it's not a monopoly situation, but when you look at it at the end of the day, somebody has got to spin the whole thing together and. And in the us, that's the FDA and other agencies.

DANIEL BAKER So, you touched on network manager and I've actually participated in the network manager conferences and events and mailing lists for about a decade. And one thing that really, when people ask me, what's it about? What's the impact?

DANIEL BAKER I talk about the efficiency-minded strategy and in particular around the accountability. So what I mean is Eurocontrol not only holds itself and the stakeholders, other ANSPs to increasing standards for delays that impact aircraft but actually publishes these publicly. And I think that's one of the things you just touched on a moment ago, which is the 80% reduction in airborne delays. That's something that Eurocontrol publishes I believe monthly. And has goals to continually improve and ultimately reduce the amount of delays. What do you think the future is of that strategy? Because at some point you're going to see a little bit of diminishing returns, right?

DANIEL BAKER You're already at 80%, what's next as far as a standard or metric that you want to be held accountable for, for improving flight operations?

EAMONN BRENNAN Okay. So, for me, Daniel, I think we've got a long way to go to you. You painted it very nice, I'd like to end the interview there because you showed that much better than it actually is!

EAMONN BRENNAN So I talk about 80%. I'm talking about 80% of holding delays at an airport. We have a limit, we got rid of those by the network manager, but what we've not updated is en route delays. So to give you an example, in 2019, you know, and in 2018, during the summer, we were averaging about 37,000 flights a day. Contrast that with the US, which is 45, 46, but in a huge land area.

EAMONN BRENNAN So we've concentrated 37,000 and a big mix of traffic. We were running up average, one third of our flights were delayed in 2019. Let's just think about that. And the average labor was 49 minutes. So when you're faced with that scenario, you're doing something wrong.

DANIEL BAKER And are you talking about ground delays or are these airborne delays?

EAMONN BRENNAN These are airborne delays, I'm talking about en route delays. So we can't give you, we can't let you off the ground because it disguised you foot. That's the reality.

DANIEL BAKER So both really?

EAMONN BRENNAN Yeah. So the problem you've got us in the core area of Europe. You've got a couple of bottlenecks that we're trying to sort out.

EAMONN BRENNAN So we're working very closely with our colleagues in Germany and in the South of France in particular, to deal with these hotspots. And the reality is as well as that, you know, also is great opportunity in the years ahead to kind of improve this, but it does need a little bit of smarter flight planning.

EAMONN BRENNAN And maybe just to outline to you, in 2019, we were diverting large amounts of flights away from say, the Karlsruhe area of Germany. We were moving flights away from Barcelona, Marseilles, changing the routes. And obviously in Europe, when you do this, there's a knock on effect. And to give you just a simple example, we redesigned the airspace recently for the third runway in Istanbul.

EAMONN BRENNAN When we finished that, we'd realized that it had a knock on effect and Malmo approach. Now you got to think that through. So. Like moving kind of like things up along the way. So all of this is a problem. So for us, I think that we've got about four or five years of a challenge, and the INM program we think will actually sort a lot of this out because we’s be able to produce more routes.

EAMONN BRENNAN We'll actually be able to produce better trajectories and we'll actually try and put the flights where the capacity are on one front, and we may even be looking at offering different flight levels at different prices. This is what the European program is, the variability of prices.

EAMONN BRENNAN So there's a lot of options there, but we're about three or four years away. So just to finish this speech, the key thing at the moment is everybody's taken the polls and actually what's happened at the moment is in 2020, and at the moment we have collective amnesia has struck Europe because of COVID.

EAMONN BRENNAN But I guarantee you that once you go back to 2023 and the summer heats up again, you will find very quickly we'll be back to these delays and the hotspots, and then knock ons again. And that's where we got to roll out this INM.

DANIEL BAKER No, that's right. I think that that touches on an interesting point, which is that the likes of FlightAware and Eurocontrol are in a weird position right now because demand for flights is, for many, many years yet we're still working on creating the efficiency because we know it's going to come back, and because we know we have to address these problems. Worldwide flight traffic went down 80% in April 2020. We saw some recovery in the middle and this kind of second half of last year that went downward again. In the U S we've seen a huge recovery in the last, I'd say month.

DANIEL BAKER In Europe not so much, we haven't seen that type of recovery yet. And as we think about the pandemic and the impact that it has, and you publish a lot of numbers, both around efficiency as well as funding numbers. As you know, route charges that you have in Europe, that it's not a factor in the U S, funding comes more from ticket sales.

DANIEL BAKER So what are your thoughts about how ANSPs will be funded in the future and is that going to change as a result of what we've seen in the last year? And how do you see Eurocontrol getting back to a thriving organization post COVID?

EAMONN BRENNAN So normally in a normal year, Daniel, we collect about $10 billion in route charges. If you think about that last year, we collected about $3.5. So we’re about 70% down in funding. And of course, obviously this is putting a lot of squeeze but it’s putting a squeeze on things like capital programs, investments, and it's slowing everything down because it's important.

EAMONN BRENNAN I've always said to all the ANSPs keep investing in CAPEX. You know, now when traffic is low, You don't gain anything by stopping CAPEX.

DANIEL BAKER Absolutely not.

EAMONN BRENNAN You can invest. And I think some of the points you're making there, why are people buying stuff off you and why are we doing stuff at the moment?

EAMONN BRENNAN Because actually it's a good time to assess your efficiency and replaced labor with technology, change some things like this. So my idea is very simple. I believe that the European system of new charges is actually fundamentally more stable than the American system. I remember talking to who was the head of the, I think he was Terry's predecessor in the FAA ops, and I remember they had a ticket tax to pay for ITC. It was added onto the price of tickets. And the assumption when that was added on was that ticket prices would always keep rising because they did up to then.

EAMONN BRENNAN Suddenly you look at the United States, Southwest come in, Jet Blue arrive, and fares tumble by 40, 45%, then you find you've got a problem. So I think European system of having a known funding mechanism, it's not built for this kind of a dip that we've got at the moment, which has kind of struggled through, I think it provides more financial stability for the platform.

EAMONN BRENNAN I'm not a big fan of the American system of where Terry and the team and the FAA have to go every year up to the Hill, like beggars, see what they can get and argue with the Senators. And one guy said he'd like a radar here and a guy likes a ADS-B and another guy likes Mode-S and I feel it takes from long-term planning from the FAA.

EAMONN BRENNAN And I've always favored the United States going through a route charge system. And I've been over there on many occasions, discussed this on panels, but you know, business aviation don't want it, but I think you'd get a better service from the FAA because it's a great organization.

EAMONN BRENNAN If you've got stable budgets. And this is why I think some of the FAA projects kind of go up and go down and a good example would be the rollout of a ADS-B and particularly the roll out of satellite ADS-B, because they don't have visibility over the horizon on funding, which we do. Now we didn't think this was going to happen, but let's assume we get back to normal by middle of next year. We still have a reasonable amount of visibility.

DANIEL BAKER You know, it's interesting. You touched on business aviation, which has a different way of funding the air traffic control system. The business aviation operators, particularly the Part 91, pay for these services through a federal excise tax on fuel, which going back to one of the first conversations we had actually has an incentive for more efficient aircraft, because a reduction in fuel consumption actually results in a reduction in the federal excise tax.

EAMONN BRENNAN That is true. True, but I think that the totality, your system needs to be addressed from an FAA point of view. If you're looking at sustainability again, what's really important, Daniel, is what fuel you're using, so let's get to the point in Europe. We're talking about SAF, Sustainable Aviation Fueling.

EAMONN BRENNAN We don't have any production capability at the moment. No one is producing, virtually none, and where you can get it, it’s three times the price of J1, so nobody's going to use it. So we've got to produce incentives for this on both sides of the Atlantic. And this is where I think that we've got to try and align what we actually do.

EAMONN BRENNAN So for the environment, for me, SAF is a very important thing, but also the new technologies around hydrogen. And here's an interesting thing. We've seen the return of supersonic transport coming back, there’s a number of operators, even looking at green supersonic. Now I can't get my head around how that works consistent with the culture you need, but it is a discussion.

EAMONN BRENNAN So there's a lot of new, exciting initiatives that I think are going to be needed to protect the environment. And I think guys like you who offer services to airlines, because airlines is going to be under pressure to try a better route, to use more sustainable fuel, to have a lower CO2 footprint and to also from a commercial point of view, to lower their carbon offsetting trades as well.

EAMONN BRENNAN So there's a lot of product there I think that is very useful and people need to be aware that airlines can save themselves a lot of money if they do this thing correctly.

DANIEL BAKER Yeah, that's absolutely right. And I think that there's a lot of technology that's come into play. You touched on flight planning route optimization, touched on reduction in emission, right?

DANIEL BAKER So more efficient aircraft are certainly a factor that we've talked a lot about. Air traffic control delays. As it relates to SAF, we have more production in the U S, certainly distribution's a big issue. I think a factor that we're seeing is the continental United States is huge. Right? And we not only have distribution issues getting SAF from one place to another, but a tremendous number of airports, not only in the commercial sector, but particularly in business aviation. And so a conversation that I'm seeing take place between FBOs and large business aviation operators is they're saying, well, you're only offering SAF at a very small number of airports.

DANIEL BAKER Maybe it's fewer than a dozen in many cases, and they're flying to the 2000 something airports around the United States. And so, an opportunity that's come to fruition that has some technology elements as well is a program that allows operators to essentially purchase SAF, even if they're at an airport that doesn't have it, not have any of the distribution overhead that just doesn't have the economies of scale right now.

DANIEL BAKER And then an operator that isn't purchasing SAF at an airport that does have it can actually receive that in their aircraft. And so that's a stop gap that allows operators to have that environmental focus that are willing to pay the premium. They can purchase it essentially anywhere they go, for example, Signature Flight Support, they're a big proponent of that.

DANIEL BAKER And then they don't really have to have any of the inefficiencies. You don’t want a truck to drive across the United States with a thousand gallons of SAF, while burning diesel along the way. So it has to be done efficiently. And I think that's an interesting approach. Perhaps something that's something we'll see across the Atlantic as well as it rolls out there.

EAMONN BRENNAN Yeah, no, I agree with you. It's a big problem, Daniel. I mean, the rollout of SAF is a major issue. In Europe where British Airways for instance, are partnering with two firms in London to do that. KLM have a very, very good project. So I think we see a little bit of takeoff, but realistically, you know, if you look at, for instance, say common engines, like say the CFM 56 or those types of engines, you’re looking at a mix ratio there. To get to a 30% mix ratio is going to take, it's going to take a lot, and you know, the question about engine certification and propulsion and maintenance contracts.

EAMONN BRENNAN So some of the actual maintenance contracts of engines at the moment I find preclude you from using SAF. So we've got to straighten out the whole what I would call regulatory chain as well as the supply chain and to me, the quicker you get our marketplace going and SAF here, I would think SAF futures and secondary trading in SAF, the more you start making a financially good product, the more people start producing it and will drop the price.

EAMONN BRENNAN Because honestly, Daniel, I don't see SAF taking off when it's three times the price. I know that it's never going to be the same price as J1, but the current factor of 3, 3.5, It's better off just pay the carbon credits and saves you a lot of messing.

EAMONN BRENNAN And, and it's a lot of that, so difficult situation.

DANIEL BAKER It's early days. There's no question about it. And only the most environmentally minded operators probably are willing to pay that premium. The good news that we're seeing in business aviation is that the engine manufacturers have come out and this has been a huge initiative, for example, at GAMA, the General Aviation Manufacturer's Association, and NBAA to ensure that SAF is certified and approved for use in those engines. And so we've actually seen virtually across all of business aviation approval for whether it be engine service, contracts, or power by the hour or warranty to support SAF. So it's an interesting time and I think that there's going to be a lot more change to come, whether it be across a SAF, how flight planning has done, how CDM has done. And so we're seeing widespread change in the industry and for us the last year, just like Eurocontrol has been, has been about adapting. And so we've re-prioritized projects.

DANIEL BAKER We've been supporting customers, whether it be financially or technically in ways that we didn't anticipate. But we're looking for the long game, just like you. We're not focused on right now as much as we're focused on, let's take this time to think bigger picture. How can we have a big impact next year.

DANIEL BAKERAnd that's worked, we've continued to thrive during this last year and with no layoffs. And we've actually launched a new program at FlightAware called FlightAware Worldwide Teamwork, which is a basically embracing this remote work program. We have been remote since March of 2020.

DANIEL BAKER It's been a huge success. People are happy. Better work-life balance, flexibility, spending more time with family, not commuting. So this is our work from anywhere, work from home, hire from anywhere policy. We're seeing great recruiting around the world, and we're going to double the company over the next two years.

DANIEL BAKER We're planning to hire about 50 people this year and not just in the places where we previously have hired in our offices in Houston, Austin, New York, London, and Singapore, it's all over the world. So I feel like when we get out of this pandemic together, we're going to be stronger than when we entered and having an even bigger impact on the industry.

DANIEL BAKER And I've enjoyed speaking with you because it's clear that you're thinking the same way and Eurocontrol is thinking the same way, and you're going to exit this on the same mindset stronger than ever before.

EAMONN BRENNAN Hopefully so, Daniel, it's a big challenge. The European network is going to take a bit of time to recover. The area that I'm worried most about at the moment is the long haul. We’re not going to see long haul traveler return on the North Atlantic, but equally so to Middle East and Asia through probably October, November, and it's a lot of bigger airports in Europe, the hub and spoke airports depend on this long haul.

EAMONN BRENNAN So a lot of operations are feeder Operations. But in part to this, Daniel, there's a lot of areas in Europe that connectivity is very important. Here you clash with the environment people, so you look at the Western Isles in Scotland or the West of Ireland or the Greek Islands or Italy there's a lot for small commuter aircraft and a lot of small airports there that I worry about whether they’ll be able to recover economically, after this case, because they don't get the level of state support.

EAMONN BRENNAN And they operate with low cost operators, particularly, we have airports in Armenia and Georgia and places at the edge of the network. So that's a huge challenge. So for me, the important thing about using the current time is to kind of, we use the phrase build back better, but that's true to an extent.

EAMONN BRENNAN I mean, we don't have the flexibility that you have in terms of letting everybody off to work at home. We've like nearly a third of our staff working home, but unfortunately, you know, we're mainstream operators and we've managed to work like that. And I think that work-life balance will change. I mean, just to give you an interesting fact, we do a lot of work with the big operators, and the big operators and the CEOs of the airlines tell me that they estimate that one in four journeys business class will probably be substituted.

EAMONN BRENNAN You know, so it'd be a Zoom call like we're having now. So that's kind of a 20% reduction. So that's going to change the way the aircraft is going to be configured, probably less business class, little bit more leisure, but I'm quite confident that airlines will return very strongly. And I actually don't subscribe to the general view that people won't travel as much.

EAMONN BRENNAN I think they'll travel more. I think there'll be pent up demand. And I believe in people flying, I believe in freedom. I don't like being locked down and all these kinds of things. So there you go.

DANIEL BAKER I agree completely. It's about travel. I think that Zoom is great and I think that it's here to stay and it will replace phone calls and it's more personal.

DANIEL BAKER Over the last year, I've had the opportunity to do a few small number compared to my normal weekly trips. But a few trips and had some safe outdoor meetings with folks. And when I'm flying home, I'm thinking this is incredible. The amount accomplished in that 90 minutes, having a coffee outside was 10 times, an entire day of Zooms.

DANIEL BAKER And I think this is better than a phone call, I think that I would have preferred to do this with you in person. I think the impact would have been so much greater. I think you're right. People not only want to travel for leisure, but for business. I think there'll be a shift in business travel, but at FlightAware, I mentioned our worldwide program for hiring, but we anticipate ultimately having a reduction in our large office expense, but massively increased travel expense, right? We're going to be bringing the entire team together globally, multiple times per year. We're talking about teams getting together for team building. When we go visit a customer, we're going to bring more people because it's an opportunity for bonding and for teamwork before and after the event.

DANIEL BAKER And so as a small representation of what that's going to look like, we're seeing more travel and increased travel expense. And I think you're right. It's going to be different. There will be reconfigurations. But you don't talk to anybody that's saying, well, I haven't really traveled in the last year and I'm glad.

DANIEL BAKER Or, I'm not looking forward to it. Everyone is chomping at the bit. And I think we're seeing that a bit in the recovery, in the U S and I think we're going to see that more broadly. And I'm optimistic that the next time I see you, it will be over a meal rather than over Zoom. And so there's a transatlantic trip either in Houston or maybe in Brussels.

EAMONN BRENNAN Or get maybe a pint of Guinness now would more my style, Daniel, how about that?

DANIEL BAKER There you go. I'm game. I'm just looking for the invitation and the opportunity to do it.

EAMONN BRENNAN You’re always welcome, you’re always welcome.

DANIEL BAKER Well, it's been a pleasure speaking with you. I'm looking forward to that invitation, and you can know that I'll take you up on it and then we'll speak again then.

EAMONN BRENNAN Okay. Thanks Daniel. And listen, I wish FlightAware and all our colleagues in the United States, the very best to you and your worldwide customers. Hope it goes well for you. And keep in touch.

DANIEL BAKER Likewise, same to you, your family and our colleagues at Eurocontrol. Thanks again. And have a good evening.

EAMONN BRENNAN Also to you. Ciao.