ACCJ/NAJAS Business Leaders Series

Among industries affected by the coronavirus pandemic, few have felt the impact as strongly as airlines and aerospace. But despite the difficulties, the future holds promise on many fronts.

On January 27, the American Chamber of Commerce in Japan (ACCJ) and the National Association of Japan–America Societies (NAJAS) welcomed Boeing Japan K.K. President Will Shaffer for the second installment in the ACCJ/NAJAS Business Leaders Series. The event was hosted by the Japan–America Society of Dallas/Fort Worth and moderated by Dallas Morning News aviation writer Kyle Arnold.

During the event, Shaffer, who was named president of Boeing Japan in August 2019—and had been deployed to the country twice as a US Navy aviator— shared his thoughts on the challenges facing the company and the industry, as well as the opportunities he sees in the Japan market.

Long Partnership

Boeing, a corporate sustaining member of the ACCJ, has a long history of collaboration in Japan. The company first opened an office in Tokyo in 1953 and has been the top provider of commercial jetliners to Japanese airlines—including All Nippon Airways Co.,Ltd. and Japan Airlines, Co., Ltd.—as well as a major supplier of defense equipment, aircraft, and services to Japan’s Ministry of Defense (JMOD). With more than 30 research and development partners, Boeing’s investments in Japan have helped grow the local aerospace sector, creating jobs and driving innovation.

Boeing Japan also supports 30 non-profit organizations, has eight partnerships with universities, and funds an annual program for science, technology, engineering, and mathematics (STEM) education aimed at elementary and junior high schools.

“Boeing Japan also … funds an 11 annual program for science, technology, engineering, and mathematics (STEM) education aimed at elementary and junior high schools."

Shaffer sees these deep roots as key to weathering the storm of the pandemic. “We have a strong supply chain here. We currently purchase $5 billion worth of goods in Japan,” he said. “And while those [transactions] may take a dip—given the challenges of international travel for the next couple of years—we expect to continue a strong and great partnership.”

Defense Matters

While commercial air service may be what first comes to mind when thinking of Boeing, the company has strong ties to the Japanese government that are key to the nation’s defense. “We have over 300 aircraft that are currently operated by JMOD. It’s the largest fleet of F-15 and CH-47 aircraft outside the US,” Shaffer said. “On top of that, JMOD is the first international customer for our KC-46 and V-22 programs.” The CH-47 Chinook is a multi-mission helicopter, while the V-22 Osprey is a multi-role “tiltrotor” that combines the vertical takeoff capabilities of a helicopter with the speed and range of a fixed-wing airplane. The KC-46— also known as Pegasus—is a widebody tanker used for refueling military aircraft. All three can also be used for humanitarian and disaster relief purposes. The Japan Air Self-Defense Force (JASDF) is scheduled to receive its first KC-46 this year.

*The first V-22 delivered to the Japan Ground Self-Defense Force, in July 2020.*

The F-15 upgrade program, which offers next-generation technologies such as an advanced cockpit, AESA radar, a digital electronic warfare suite, the world’s fastest mission computer, and modern sensors, is a great example of how Boeing works with Japanese companies. While the fighter jet was developed by

Boeing, those deployed by the JASDF were assembled in Japan by Mitsubishi Heavy Industries, Ltd. The same applies to upgrades to the platform.

“We’ll provide them the kits and they’ll do all the installation work,” Shaffer explained. “They tend to be on many of our defense programs and are the prime provider to the Japanese government. We give them the support to be able to do that effectively. So, we have this symbiotic relationship where we work together on the commercial side, and that’s an important part of their business, but we also do a lot of work with them on their defense side, where we support them on sales, and they are the prime [partner] on our aircraft.”

State of Travel

Of course, the dip in commercial aviation is a key concern right now as the coronavirus pandemic continues to make air travel difficult. The pandemic has all but brought the Japanese government’s plans for 60 million visitors per year by 2030 to a standstill. Shaffer addressed the situation and expressed optimism on the domestic front and caution on international recovery.

When asked how Japanese travelers have reacted to the pandemic he noted that, by the end of last year, “with programs like the Go To Travel campaign, domestic traffic did rise pretty close to 50–60 percent.” However, due to the current state of emergency in reaction to the third wave of the pandemic, “you see that drop- ping off significantly.”

On the international front, “because of the challenges of coming in and out of Japan, [the traffic] is very small. It’s five to 10 percent of normal. So, I think they [passengers] are comfortable getting on a plane, but the challenge of crossing borders is still difficult.”

Shaffer is hopeful that regional travel in Asia may rebound sooner than global travel thanks to the relatively lower number of Covid-19 cases in the region.

“Japan tried last year to start opening up international corridors,” he said. “They had travel open with many Southeast Asian countries, as well as China and [South] Korea. Many restrictions were still pretty high and there were a lot of requirements. It was really only for business travel that they did that. [But] you might see travel in this region, in a bubble area, open up a little bit faster.

Getting people in and out of Japan to North America and Europe is probably going take a while longer.”

Over the long term, Shaffer sees great opportunity in Japan for international travel. He believes inbound travel will also recover. “Japan offers a lot of great tourist attractions and continues to focus on their current tourism industry as a way of continuing growth within the country.”

Peace of Mind

Even once travel restrictions are eased, helping passengers feel safe will be an important part of the industry’s rebound. Shaffer said that Boeing has done a lot of research into the travel environment, including extensive modeling on the airplane cabin, to validate the safety of air travel.

“[We] conducted tests where we looked at ways that we could actually clean the inside surfaces so that they are safe,” he explained. “We also looked at the airflow inside the aircraft. What we’ve found is that the likelihood of catching the coronavirus on the plane is relatively low, given that the air changes on the craft every two to three minutes, which is about what you see in an operating room in a hospital.”

*KHI held a ceremony in 2018 before shipping the first 777X parts to Boeing‘s factory in Everett, Washington.*

He also noted that the way in which air flows through the cabin in effect creates a separation that is important for minimizing virus spread, because the process reduces transmission.

“It’s effectively as if passengers are sitting about seven feet apart, because the air flows from the ceiling down to the floor and is then pulled out from the floor and circulated through HEPA filters, where it is mixed with outside air.” HEPA, or high- efficiency particulate air filters, are 99.9 percent effective at removing viruses, bacteria, and fungi, ensuring that very clean air is returned to the cabin.

The number of Covid-19 cases that have been traced back to air travel is very small—just one in every 27 million passengers according to the International Air Transport Association. With some 1.8 billion people having flown in 2020, that comes to well under 100.

Sustainability

The lull in air travel may have positive long-term effects and help the United States and Japan meet their environmental targets. Japanese Prime Minister Yoshihide Suga announced on October 26 that Japan will work to achieve net-zero carbon emissions by 2050, and on January 27 US President Joe Biden said the US should become a net-zero economy by 2050, calling climate change an existential threat.

Vehicles—whether on land or in the air—are a key source of CO2 emissions. But designs are becoming more efficient, and Boeing has made great strides in this area. A next step is for airlines to update their fleets to more efficient models.

“Boeing has committed to having all its airplanes able and certified to operate off 100-percent sustainable aviation fuel by 2030."

“I think one of the things this pandemic is actually driving is retirement of a lot of the older aircraft, and you’re seeing those get pulled out at a fairly fast rate across a lot of our customers,” Shaffer said. “And what will probably happen is, as the traffic comes back, you’re going to see them replace these aircraft with newer ones.”

He explained that each generation of aircraft is significantly more efficient than the previous one. The 737 MAX reduces fuel use and CO2 emissions by 14 percent compared with the 737NG that it replaces, for example. An even bigger improvement can be seen between the 787 and the airplanes it replaces—where savings in fuel consumption and CO2 emissions fall in the range of 20–25 percent.

Looking at the path ahead, he noted that Boeing President and Chief Executive Officer David Calhoun believes that one of the important ways the aviation industry is going to get to carbon neutrality is through sustainable fuels. Shaffer explained that Boeing has committed to having all its airplanes able and certified to operate off 100-percent sustainable aviation fuel by 2030. He added that, in addition to sustainable fuels, Boeing is “still looking at alternate opportunities—but many of those, we think, are probably further out.”

Those alternatives include hydrogen-powered and electric planes, although adapting these technologies to aircraft in the size class of Boeing’s passenger jets will require advancements.

Clearing Skies

With a drive to make air travel safe for passengers and the environment, and dedication to strong ties with Japanese business and government, Boeing is playing a leading role not only in seeing the industry through the turbulence of the pandemic but to a bright future. And for Shaffer, the chance to be back in Japan to guide the mission is a delight.