Table Speech

Initiation Speech

June 10, 2009

Mr. Otto F. Benz
Mr. Toshio Morohoshi

The Future of the Aviation Industry”
Mr. Otto F. Benz
General Manager for Japan,
Lufthansa German Airlines

 You certainly might have expected me to talk about the current crisis of the aviation industry. A combined loss of up to US$9 billion is only a modest forecast for the financial results of all airlines of the world in 2009, caused by the economic downturn since September 2008 and the recent Swine Flu. Therefore all airlines will have to perform a very strict capacity and cost management, find flexible employment models, but never compromising on flight safety.

 In this gloomy picture, I am still quite optimistic that there will be many opportunities and fascinating changes for the aviation industry and its customers after this crisis. And this will be the topic of my speech today.

 According to the general opinion of the aviation analysts, the industry will return to the long-term annual growth rate of 4-5% between 2010 and 2020, with Asia becoming again the driving force of mobility.

 The only airlines to survive will be those that adapt best to the shifting business environment and are able to invest in modern and energy-efficient fleets, based on long-term perspective and planning. Extended global airline alliances and consolidation will allow seamless travel for customers within systems of high quality levels and a wide range of products.

 The air transportation industry employs 32 million workers and supports US$3.5 trillion in economic activities, representing 8% of global GDP. On the other hand, it accounts for around 2% of the world’s CO2 emissions, making it the most environmentally-efficient industry.

Moreover, the industry has been making a significant contribution to facilitate human interchange and communication, such as promoting interactions between developed and developing nations as well as avoiding or solving conflicts through face-to-face talks of leaders.

 In the last four decades, fuel efficiency increased by 70% and it will improve a further 25% by 2020. To achieve the “zero emission” target, we must invest in technology to build better aircrafts and engines to be powered by non-carbon fuels, implement more efficient flight schedules, build and operate more efficient infrastructure, as well as develop positive economic instruments such as tax credits and funding of research and development.

 Over the next 25 years, bio-fuels will become a natural additive to the existing fuel and will gain increasing proportion in the fuel mix. Thereafter with a carbon-free fuel, such as solar power improvements, CO2 emission is estimated to drop by 50% by 2050 vs 2005.

 Air transport is a responsible industry. It facilitated the global village that has lifted millions out of poverty. The aviation industry will continue to play this vital role while further improving environmental performance. The sky has no limits!

“What Companies Must Do to Handle Explosive Increase of Information”
Mr. Toshio Morohoshi
President, EMC Japan K.K.

 The amount of digital information is increasing dramatically at a speed beyond our expectations. Many electric products, including TVs, IPs or mobile phones, digital cameras, PCs, internet and e-mails, are replaced by digital ones, generating vast amounts of data as a byproduct. What are the effects and consequences of this explosive digitization we are experiencing today in the whole society?

 A large part of digital information is related to our daily life. Some are generated by actions we take like “watching TV” or “making phone calls.” What we are experiencing today is a much larger amount of digital information generated behind the scenes of each individual activity, including history of credit card usage or web searches, stock dealings and images recorded on the surveillance cameras set up throughout towns. There are many business opportunities in these activity records generated behind the scenes. Companies are obliged to comply with laws to guarantee information security, protection of privacy or trade secrets. Companies are also required to store large amount of information for a long period of time or introduce and maintain high-level security for information protection, which are challenging for many companies.

 It is estimated that both generated information and copied information will expand at the annual rate of 60%, the former through business activities and the latter for the sake of information utilization and protection. We should seek ways to reduce copied information, which accounts for 75% of the total information. Various measures do exist, one being information sharing operations which allows browsing, with control mechanism to restrict information copying or transmission.

 An elaborate plan is essential to safely store information for a long period of time. Today effective company-wide IT systems should be an integral part of management, helping to eliminate inefficiencies and thereby reducing costs throughout the company and enhancing security of information. Long-term information storage will become possible by maintaining and controlling an organized IT system.

 Nobody can stop the flow of information increasing. Companies must identify skillful ways to handle the ever-growing information, on the assumption that information is a vital corporate asset for a successful strategy. We can control information expansion and achieve well-organized usage and management, by utilizing the present IT technology. Rather than the risk of information leakage, merits of effective use of information are enormous such as more dynamic corporate activities, improved customer relations, getting accurate forecasting and reviews against targets, creating new business through information analysis, corporate integration after M&A and so on.