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Forever New Frontiers
Economic Club of Detroit

Phil Condit, The Boeing Company

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I would like to take a few minutes and touch on each of these.

The first issue is a basic global aviation policy, which allows us to move from a highly regulated, bilateral system to an open multilateral system.

Our aviation infrastructure has not kept up with the world that has emerged over the last 54 years and especially over the last decade of development of a global market economy.
In 1946, the United Kingdom and the United States negotiated Bermuda 1, the first bilateral service agreement.

A year later, the international system of commercial aviation was formalized at the Geneva Convention.

Bermuda 2 reduced the restrictions between the U.S. and the UK in 1977, and since then many nations have negotiated "open skies" aviation agreements. In fact, more than 3,000 agreements have been negotiated.

Basically, these agreements allow airlines
from one country to fly to any airport in another country.

But this is far from ideal. Restrictions still exist on the ability to carry passengers to and from a third country or within another country. We are far from an open market.
Air transportation has been built around these bilateral agreements.

I believe it's time to move to a open rules-based system for much greater efficiency with better passenger choice.

This is, in my opinion, a huge task. We have seen the deregulation of many industries and, for the most part, experience indicates that this will be a very disruptive process.

The move to a market-based system means that the efficient carriers will prosper, while the inefficient carriers disappear.

Clearly, this means that there must be a period of transition since airlines around the world are in different places.

No carrier will want to give up the advantages that it has in the current system, and every carrier will want to shed its disadvantages.

Since the goal is a rules-based system with level playing field competition, development of the rules must occur in an international arena. This will not be an easy task because there will be debates over the rules and their application. Jobs will be created in one area and lost in another because of the change.

But we have even more to lose if aviation is either artificially limited, or not based on sound rules.

Second issue is an airport and air traffic management (ATM) system that can accommodate future growth of air transportation.

A satellite-based future airspace management system can be used to dramatically improve air transport system safety, capacity, and efficiency on a global scale.

Over the last decade, we have been dealing with air traffic congestion because of the traffic growth we talked of earlier.

If we don't make changes, significant changes soon, we are going to have aviation gridlock.

Air transportation is key to commerce. Cities with easy air access will prosper; those without will fall behind.
Our airports, and the air traffic management system must contend with significant fleet and passenger growth in the years ahead.

We have a lot of work to do on our air traffic management system. Today's system has evolved over time.

It grew from fires on hilltops to radio beacons, to VOR/DME with radar coverage and transponders.

But it is a system with significant limitations. It is essentially a system of one-lane roads With policemen directing traffic on every corner.

A satellite-based future airspace management system can dramatically improve our air transport system on a global scale.

The aviation industry can take advantage of satellite based communication, navigation and surveillance. It can provide and integrated, global system with out the gaps of the current system.

Just think of a system where the position and intent of every airplane in the system are known. Where guidance is strategic, not tactical. Where there is one global system, not hundreds of separate systems.

The technology is available, But the political issues are significant. In a global system, how do be protect national sovereignty? What is the role of controllers that needs managers?

We need to build a modern, efficient Air Traffic Management System. to increase the efficient use of limited air space. To provide new routes, new terminal approaches, new precision approaches, and free flight with an absolute requirement to always maintain and improve aviation safety and security. This system will require seamless, global interoperability. You will need to fly from Madrid to Detroit to China with one set of avionics and one set of procedures.

This can be done and needs to be done.

Third issue: safety and security improvements
are needed to build public confidence in the system.

September 11th has created an unprecedented urgency to provide security for us as a people, as a country, as a world.

Safety and security must be addressed if the aviation system is to grow. A doubling of operations -- without a significant decrease in accidents, and without fear of terrorist, -- is completely unacceptable.

The growth of the global economy -- whether from the perspective of a developing nation or an industrialized country -- demands safe and secure access to the skies. We must work together immediately to build the safest, most secure air transport system possible;

Obviously, the best defense to ensure a safe and secure flying experience is to make sure that accidents do no happen and that potential terrorists never get on an airplane.

While we must be vigilant and alert, we also must reduce the flow time or idle time of passengers traveling through airports.

That adage, "Time is money," tells the story. If you have to wait two or three hours prior to a one-hour flight, it's not worth it, and travelers will find another way.

Events of September 11th have impacted air passenger traffic, but we know that this is not forever because we have the ability to make travel safe and secure because we have creative, innovative people who want to do just that.

In fact, at Boeing, our chief technology officer has put out a call to our employees for suggestions and has so far received more than 3,000 ideas to help us with this immediate challenge.

These are the kind of things we are thinking about:

Would smart cards and bio-metrics allow faster check-in and faster security screening?

Maybe an "opt-in" system can address the conflict between security and privacy. You would make the choice between rapid processing while give up some privacy.

Could we use unmanned aircraft technology and the satellite-base air traffic management system to control a hijacked airplane? Such a system would have to be absolutely secure, but is technically feasible.

Can the communication technology for broadband connectivity increase security, as well as functionality, on airplanes?

How do we make use of real-time data in the cockpit and the cabin?

Instant communications with Air Traffic Control and security forces and status monitoring can sharply increase security.

The same technology can make the airplane
an extension of daily life…a place where you can stay
in constant contact with your family or your office while airborne?

The aviation system of the future can not only address and provides relief for congestion, it can also provide
significant security benefits. What we need to do for the future is to go beyond prevention and have a much more robust system for detection, response, and consequence management. This is a new frontier to open.

I believe we can move swiftly and succeed to meet the immediate challenges of safety and security, of congestion.

I believe we can meet the challenges of digital security and privacy and tap technology to solve our challenges.

At Boeing we are not waiting. Last week, we marked the first year anniversary of our fledgling Air Traffic Management unit that is working on many of the issues we have discussed today. This business unit was launched
with a simple but aggressive goal: to come up with a more effective way to move air traffic through increasingly crowded skies.

Its mandate: --to enhance aviation safety and security;
to increase airspace capacity and reduce delays. --and, if there is a business case, to become the preferred provider of air traffic management solutions worldwide;

I am deeply optimistic about the long term future of global air transportation. I do not see limits that cannot be addressed if we band together and work together. I do not pretend that this will be easy.

Moving to a rules-based, global aviation system will cause dislocations, but the resulting system will be significantly more efficient with better service and security for the public.

A global air traffic management system offers more capacity and dramatically increases safety.

I believe it is worth the effort to work through the issues
to have a better, safer, more secure global air transportation system for the 21st century.

On July 15, 1960, in accepting the Democratic Presidential nomination in Los Angeles, John F. Kennedy talked
about a new frontier for America.

He said as part of his speech: "The New Frontier of which I speak is not a set of promises -- it is a set of challenges."

I believe today we, too, have challenges.I also believe that we can solve our challenges through some old and tried ways by using imagination, invention, and discovery.

So where do we get inspiration? It comes from many places…from work in garages, from Detroit to Dayton to Kitty Hawk. Most of all it comes from people who have… faced fear with courage, taken risk with dreams to do the impossible, to make the world a better place.

People with the last names of Ford, Fisher, Chrysler, Durant, and Benz; Wright, Boeing, Douglas, Martin, McDonnell, Hughes, and Jeppesen; Together we must insist on
safe and secure travel and commerce worldwide.

Together we must ensure healthy, critical infrastructures.
Together we must build a great future and conquer challenges with courage and inspiration.

That's how we will open up new frontiers - forever.

Thank you.


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