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00:00Asia Pacific, of course, has dominated the aviation market globally. Pre pandemic, but this year we're going to see perhaps a tidal change here because we're expecting that Asia Pacific will be coming in second to Europe because of what we're seeing with a slower recovery in the Asian meat market, as well as China's closed borders. Alex, I wanted to ask you, I mean, obviously, we talked earlier. We're seeing how Asia is now about 50 percent of where it was pre pandemic. Southeast Asia, I think is doing better. But give us give us the overall outlook for for a pack in terms of aviation. What do we look like? Well, we are looking at a recovery were probably overall and in Asia, looking at 2023, 2024, maybe later. It all depends on China because Asia is so dominated by China. We've gotta remember that Japan and Taiwan also just opened up within weeks of wear today. And it's it's really key. But if you look at Southeast Asia and that's what I'm responsible for, so that's what I can talk to more readily. You know, we're at 70 percent recovery from 2019 levels. So Southeast Asia is booming partially because of almost all the cuts. All the countries are open except for maybe Myanmar or other places that maybe we're not rushing to go to. But but, you know, I was just in Cambodia at the ASEAN summit. I went to Bali to go to the G 20 and be 20. And my planes were packed all all directions, not only with people going obviously to the summits, but also with tourists. So that's right. I know. And as the business lounges, I mean, they're packed as well. They are almost over packed. And, you know, that's one of the challenges that that we see is that, you know, the airports and the airlines are struggling to meet the demand that is out there. So the demand is pent up. That's there. But, you know, the airport lounges are aren't fully open. And, you know, we see we see lounges that are more packed than ever. And you see, you know, fewer flights. And we talked about price in the last panel, you know, and that's you know, that's a example of, you know, demand outstripping supply. And unfortunately, a lot of the airlines live let staff go, but they also put their aircraft in the mothballs. And it doesn't it takes a little while to bring those aircraft back. They're not meant to sit for any length of time, let alone years. So we've got we've got some challenges in front of us. But I'm confident that this region can meet those challenges. And of course, despite those challenges, still lots of upside, especially here in Asia. I mean, tell us a little bit about the the factors. You know, that the growth factors that's really driving the growth that we're seeing here in Southeast Asia. Well, again, since we're sitting here in Thailand, I really want to look at it, Southeast Asia. You know, you've got a market of 660 million people, mostly young. The median age is just over 30 years old. The majority of people in this region are under 35. In fact. Three hundred eighty million people reside here in Austin. And, you know, we put we throw out these numbers all the time. But figure out 80 million people means that you have a young population here in this region that's 20 percent larger than the entire population of the United States. So you've got this incredible growth factor. You've got open markets, open skies here in ASEAN and in domestic travel is coming back first, as you probably know. But intra ASEAN, intra Asia travel is the next to come. And the long haul international is the slowest to recover at the moment. But, you know, those young people will drive engagement. And you've got to remember that Southeast Asia sits next to the first and second largest populations in the world. So when China comes back online, you're going to see this region very quickly rebound and very quickly come back and surpass 2019 numbers. What's really surprising to me, certainly when you travel through Southeast Asia, you happen to talk to a passenger, U.S. passengers who obviously are are traveling for the very first time. And we still see so many of that we out throughout the region. Do you know, I got a card to the governments of Southeast Asian ASEAN as an entity has really opened up the possibility for low caste, low cost airlines to develop and to thrive. And you've seen many examples from, you know, VIX yet in Vietnam to scoot in Singapore and quite a number here in Thailand, smile and others really servicing a market that couldn't but buy prices is price sensitive, but also wants to travel and hasn't traveled before. It's it's really exciting to see it even. You know, now when I travel from Singapore, a lot of times I can't get on Singapore Airlines because they're oversold and I have to use a few scoot. And it's a very different experience, but it's great experience. And the school flights are completely full as well. So it's incredible. That's great. We're talking about bright spots. Let's talk to some of the challenges you mentioned, for example, capacity and just not getting enough flights, not getting enough planes up in the air right now. They're mothballed. We obviously have a problem with workforce as well. I mean, we experienced a pandemic. Flights were shuttered. No one could travel. So you had to lay off staff. You had to lay off pilots. You had to lay off, you know, airline attendants, an airport staff. Where are we now in terms of workforce and how do we start to get those people back? Well, we're still struggling and the airlines of the region were were were in need of more staff. Even in 2019. We've got a huge demand for pilots, for technicians and for flight attendants. A lot of them, as you said, were furloughed or laid off and went, found other ways of support themselves. And a lot of them are very happy in those other ways. They're not traveling. They're not working crazy hours and being stressed. So they're not necessarily coming back now that the demand is there. So that's a double problem, one that you don't have your skilled and experienced staff coming back. But secondly, you have to train everybody and you can't trainer everybody on a on a on a dime. So, you know, we've got flight schools and others that are training pilots, but it's not like you can, you know, put someone in today and get him out tomorrow. So it's it's going to be a challenge for the region for a little while to come. In addition to, you know, supply chains are also challenged in terms of OEMs like like ourselves. So we're not producing as quickly as we would like to in terms of our planes. How in terms of that production, how how what do we need to get that back back up and how how it's going to be done? What everybody is, is struggling with labor and and the supply chain. So I think it's coming back and assuming that we can keep the momentum and that recession doesn't doesn't doesn't slow us down some more. I think you'll be back somewhat quickly. But we're learning about supply chains and redundancy and a few other things. What are the things you mentioned, of course, is with workforces as pilots as well, we are experiencing a pilot shortage across the globe. There is now talk and I think support from from plane makers as well as the regulators to try to tease out the feasibility of having just one pilot in the cockpit rather than to. And during the break, we also mentioned about autonomous flight flights as well, which which is, you know, interesting prospect. I mean, obviously, it'll save the airlines lots of money. But at the same time, customers and passengers, I mean, there's there's some resistance to that. Now, I'm wondering how I think a lot of the psychological barriers are probably harder than the technological barriers. Boeing is an investor in a company called Whisk, which is developing autonomous air taxis to take people initially from airports to city centers. I think we're on version 6 now and I've seen it fly myself an earlier version. It's pretty incredible, but it's hard to imagine for some people to get into a flying machine that doesn't have a pilot and doesn't, you know, it takes off and lands by itself. So I think psychologically it's going to be harder. The technology is there obviously is a lot of a lot of things we'll have to work through with regulators and flight routes and making sure that drones and other things don't get in the way of a passenger moving autonomous vehicles. But, you know, the technology is there for four single pilots. Again, it's it. It's really about where the regulators and the general public feel comfortable. Do you think that that single pilot, as well as autonomous are going to be valid concurrently or do you think, first of all, we'll start with one pilot when, you know, in the cockpit that people used to that idea and then think, you know, obviously I can't predict the future, but at Boeing, we're working on both concurrently and, you know, we'll see different things. I think for for maybe a small 4 six person air taxi, maybe we start with autonomous a lot people working on similar versions with with a pilot. And, you know, for larger airplanes, I think it might take a little while before we were ready to put a hundred 100 plus people on an airplane and send them with an autonomous pilot, even a single single pilot. Yeah, well, we're certainly seeing capsules, you know, boost people into outer space as all autonomous. We had a greater Artemus launch today. So we've got a rocket that's going around the moon as we speak. So, yeah, I think you're going to see a lot of that. And that's you know, let's that's where we're going. That's where we're headed. But again, we're all used to having pilots. We're all used to to seeing a person to the last moderator's point. You know, it's nice to be greeted by an actual person. So we'll see where it goes. But, you know, that'll be up to our customers and our friends. But Boeing is is taking the technology and getting it ready for when the public and the regulators are ready to accept it. All right. And obviously, the industry has some very important goals when it comes to sustainability and the industry, aviation industry has. Large that it wants to be net carbo NASDAQ carbon neutral is exactly carbon neutral, zero, zero, zero emissions by 2050. So how do we get there? Because there's certainly a lot of concern that sustainable jet fuel. We're not quite there yet with production numbers. How do we get around that? Well, we have to do it together, obviously. If we're gonna get there, it's got to be everybody involved. And governments have a role and the manufacturers have a role and certainly the airlines have a role. But at Boeing, when we look at it and we're trying to be a catalyst for for this change, we look at it in four aspects. First and foremost, fleet renewal. I mean, we think that the our modern airplanes are somewhere between 15 and 25 percent more fuel efficient than the models that they're replacing. The second is operational efficiency. We've got technology using big data on A.I. to help airports and air airlines and then pilots fly more efficiently and just use the fuel that they're using in a way that is very specific to where they want to go. And I think that's really important. And of course, the big the big opportunity, the room is sustainable aviation fuel or renewable energies. It may not only be steam ladies, aviation fuel at Boeing, we say it's SAFF and not SAFF or but that's really the opportunity. If you use 100 percent sustainable aviation fuel to power your airplanes and that can be done today. We've we've we've shown that through real flights that would save us about 80 percent of carbon emissions. So that's really significant. The problem with SAFF is, is there's not enough of it in the world. There are not enough refineries. And we haven't we haven't really dedicated the feedstock to make it happen. And it's a biofuel. And the feedstock in Asia, in Southeast Asia especially is here and plentiful. But we need to work with governments to make it effective and to bring down the price, because right now one of the barriers is that there's not enough supplies of the demand and there is demand of everything that's supplied is used. But the prices is way too high. Even above today's higher prices for jet jet fuel is still significantly double digit percentage is higher than than jet fuel. So we'll have to work with governments to incentivize both the airlines and the producers to make safe. And we'll have to work with the energy companies to try and ensure that the south that it's that's produced here in Asia gets to gets to the airports and that you need airports to make sure the infrastructure is there. They're at Boeing. We've said that we will make sure that all of our planes are 100 percent safe, compatible by 2030, which is a really important thing. We can fly right now, but we are we're making sure that the the hoses and the infrastructure around the hoses are sustainable and compatible with both Jet A and SAFF being put in and out of planes. And many, many operators in Europe and in California are starting to use a blend of SAFF. It's usually pretty small under 5 percent to power their planes. And that's been done by regulation. That is good news. I mean, 2050 at the same time seems like it's way off. But but we know that we'll be right there and there is concern whether or not we're hitting at least that the goalposts. What is your sense of where we are in terms of, you know, 2050 and where we are? Well, we we have some some ways to go. I don't I don't I'm not an expert in sustainability. But the the issue around SAFF is is one of the key ones. Right. So 2015, a 25 percent savings on fleet renewal, 10 percent on operational efficiency help. But this the 80 percent when we get to 100 percent SAFF, that really makes a difference. And hundred percent south is is significantly off. 2015 is far enough. I think we'll hit it, but it's going to take a lot to get there and we're gonna have to work with industry and governments to get us there. What about the role of consumers? I mean, obviously, we saw on that polling people when they travel, they really want out, be so price sensitive. They want to pay as little as possible. I mean, are consumers willing or are they going to be willing to pay? Well, that's a that's a twenty thousand dollar question. Hopefully we can bring south prices down by increasing the supply to meet the demand to a price point that's compact, compatible, acceptable to the consumers. But I think there are a group of consumers, certainly the business travelers, that may be willing to pay more if they can get things like carbon offset for for their travel and more higher priced tickets. So we'll have to see on that. And that's up to our airline partners. But but, you know, we've got to get them. We've got to get the fuel availability up first. Great. We've just emerged from the pandemic. And now for us ahead. We're bracing. Most of our markets for for economic times that are gonna be turbulent again. What's your outlook for aviation during this very difficult time and especially for Boeing and Boeing's growth in the region? Well, in Southeast Asia, we're very optimistic. In Asia as a whole, we're optimistic. You know, obviously, a lot on Asia depends on China's opening versus, you know, risk of recession. Risk of economic downturn certainly hurts are our airline partners. And therefore, you know, is challenging for others as well. But, you know, we're optimistic this region. As I said, as the first, second, third largest populations in the world. And that's good. And they're the young populations and they want to travel. We've seen that prior to 2019. We're we're hopeful. And, you know, the G 20, we're hopeful the governments don't forget about the pandemic, do something to make sure that, you know, everyone says it's when, not if. But hopefully it's when. A long time from now, the next pandemic hits us. We'll be prepared and we'll be coordinated. One of the biggest challenges to travel is that every government in the world had a different policy, whether it was, you know, how what you had to do to before you came, went after you came or you know what, after you had a download. I think I have like 15 different apps for four for 10 countries in Southeast Asia. And maybe that's an exaggeration. But but, you know, it is it is challenging that we want to see governments coordinate. And that's what hopefully will come out of today's meetings at the G 20. Great. Well, that's a great note. And on. Thanks so much, Alix Steel. Thank you.

APEC Economies’ Aviation Outlook

Alexander Feldman, President, Boeing Southeast Asia discusses the future of air travel in APAC with Bloomberg’s K. Oanh Ha at the Bloomberg Business Summit at APEC. (Source: Bloomberg)