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Airlines Call for Fiscal Discipline

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Airlines Call for Fiscal Discipline T U E S DAY 3 I TUESDAY I 14 OCTOBER 2008 D A Y BRINGING YOU THE NEWS FROM THE 14TH WORLD ROUTE DEVELOPMENT FORUM IN KUALA LUMPUR It’s time for a change – crisis could provide momentum for consolidation AIRLINES CALL FOR FISCAL DISCIPLINE BY NICHOLAS IONIDES lines managing director Idris Jala. “what it did is compel the indus - ore fiscal discipline is needed “We need to innovate beyond We need to innovate try that we had to be financially Min the airline sector with fuel the normal day-to-day things we beyond the normal and commercially viable”. prices at high levels and demand do. We cannot keep doing it the day-to-day things we do He added: “The challenge now falling amid the credit crunch, way we have been doing them.” is the demand curve. Discretionary Idris Jala – according to panellists at the Idris and other panellists said in managing director, MAS travel is going to go down.” Routes Leaders’ Forum yesterday. addition to focusing more on cost As a result airlines and other “If we just continue doing control and trying to be disciplined industry players need to press for things as usual, it is untenable in with capacity growth, deeper struc - dent international affairs at Etihad, deeper structural change, such as a world where oil prices are at tural change is needed. said airlines have done well to live easing ownership restrictions to $100 a barrel,” said Malaysia Air - Vijay Poonoosamy, vice presi - in a world of high fuel prices and allow for consolidation. “Airlines that want to consoli - date should be allowed to do so,” said Hans Mitterlechner, director Malaysia of airport investment group Mac - quarie. revs up for Justin Symonds, global head of ‘wheelie’ big transportation and logistics at ABN Amro, added that “you need event to create a level playing field in the industry” in part by changing The siting of the Sepang the “ludicrous legacy” of bilateral motorsport circuit next to air services and allowing for more Kuala Lumpur’s new interna - access to capital in the industry. tional airport has already He said that with fuel priced at given a boost to passenger $100 per barrel this has been “pro - numbers. viding momentum to consolida - And this weekend the tion”, although “there needs to be airport is steeling itself a classic burning platform” before for a huge invasion of regulators look at pushing through motorcycle fans as the deep change. world MotoGP championship Association of Asia Pacific Air - comes to Sepang. lines director general Andrew On the Routes’ host Herdman added that it is not all booth they are already cele - doom and gloom, however, as the brating as hospitality girls industry will keep growing. Carace Kwan and Angeline “We still have pent-up demand Yap try their hands on one for new aircraft to come in,” he of the high speed machines said. “There will be a dip in displayed here yesterday. demand but this industry will still keep growing.” I INSIDE THIS ISSUE Distribution sponsored by: Leaders’ Forum Page 4 Embraer odd-man-out Page 12 Marketing awards Page 8 Climate change Page 18 4 Lovely Prague Page 10 Currying favour Page 22 NEWS A new chapter in Spanish aviation begins later this month when the Airport opening heralds new era for Spanish aviation country’s first private airport opens for business. And a team is at multi-modal facility connecting air, tions Manager with CQM. “Now we CQM has already attracted two Routes ready to do business with (high speed) rail and road. are open for business with a differ - airlines – Air Nostrum operating airlines of all kinds. Only a year ago, at Routes in ent philosophy to other Spanish two routes (Barcelona and Las The opening of Central Ciudad Stockholm, the airport was being airports. This will be business to Palmas) and Air Berlin which will Real (CQM) airport – it goes marketed under the name Madrid business and we intend that our operate to Palma, Majorca. operational on October 23 with South. However, opposition from customers will be partners in a The airport has a 4km runway an official ceremony four days city politicians led to the name win-win relationship.” and an ILS-Cat III rating. It will be later – marks the end of a long change. Llorens said that customers will operational 24 hours a day. It has battle to create Spain’s first The new name reflects the help shape the final structure of a 28,000 m 2 passenger terminal private airport. airport’s location at the centre of the airport, particularly in its Logis - and a 6,100 m 2 cargo terminal. The backers of the airport have the Iberian peninsula. tics and Commercial Centre. The Llorens said that he is currently overcome regulatory and political “We consider ourselves as an centre is designated as a base for talking to airlines of all types, opposition to build CQM, which will alternative gateway to Madrid,” a range of activities, from aeronau - both Europe-based and those become an aviation city and a said Luis Llorens, External Rela - tics, to commercial and hotels. from Asia. I Routes hands baton to Beijing Organisers look forward to a showcase event in another fascinating and hospitable Asian city BY ALAN PEAFORD A taste of eijing will host next year’s “With the opening of T3, things to BRoutes – the 15th World Beijing is now working come. Route Development Forum – and towards world hub status” Chinese Beijing Capital International Air - musicians Mike Howarth – entertain port (BCIA) is looking forward to chief executive, RDG welcoming delegates to the show - Routes case event. delegates in KL BCIA’s Wang Tao says the new has three sections all connected airport expansion for terminal 3 by an automated people mover will be complete by then and that will carry 8,000 people an following the success of the hour high above the airport. Olympics earlier this year, the “Passengers will have great Chinese flagship airport is ready views,” says Wang. to welcome the industry. The terminal will have direct After four years’ construction fast rail connections to Beijing the new Norman Foster-designed city centre, taking less than 20 T3 is the world’s largest airport minutes. There will also be Asia’s building – covering more than a largest car park with capacity for million square meters – and will 10,000 cars. eventually accommodate an esti - The Routes event will be at the “We will be running shuttle Look out at 13.00 today at mated 50 million passengers a new convention centre close to buses from the airport to the the Beijing stand for the official year by 2020. the airport where there are al - hotels and convention centre for handover when Zhang Zhizhong, The dragon-shaped building ready a number of five star hotels. those people that stay in the city,” GM of capital airports and Dong says Wang. Zhiyi, GM of BCIA will be invit - Routes organisers, RDG’s chief ing delegates to the next event. executive Mike Howarth says “the Speaking at the Leaders’ Forum region is a powerhouse of global air yesterday, Zhang said that air trans - PUBLISHED BY AIRLINE BUSINESS IN ASSOCIATION WITH AEROCOMM transport and, in 2009, it is likely port growth for China will continue DAILY editorial team Advertisement sales Visit us on the web: to be the world’s major through 2020 when it Geoff Thomas Robert Hancock flightglobal.com/ab growth area. With the expects to have 20% Nick Ionides Shawn Buck ©Airline Business 2008 opening of T3, Beijing is of the world’s air Alan Peaford Cory Mathews now working towards movements. I Mike Miller Got a story? world hub status and for Mike Martin Printed by Come and see us in the Routes’ delegates, the Design\production Times Offset Hospitality Lounge 1 event will be located in Amelia Clark Malaysia overlooking Networking one of the most accessi - Photography Hall 1 Ian Billinghurst ble and dynamic cities in Left: Zhang Zhizhong, the world.” GM of capital airports flightglobal.com/ab October 2008 I Airline Business Daily @ Routes I 3 NEWS Open Skies is a success, OIL TRADING VOLATILITY but more progress needed LIKELY TO Leaders from both British Airways’ CONTINUE sides of the Atlantic want Walsh pact to go further speaking The global credit crunch is at the resulting in reduced specula - BY MIKE MILLER Routes tive activity in oil trading S-EU Open Skies, which took Leaders’ although panellists at the Ueffect in April, has been a Forum Routes Leaders’ Forum resounding success, according to yesterday were in agreement officials on both sides of the At - that volatility will remain. lantic, although more advances are Justin Symonds, global necessary for the industry to realise head of transportation and true progress. logistics at ABN Amro said: Speaking at the Routes Leaders “A positive… is that some Forum yesterday, British Airways of the speculative activity CEO Willie Walsh called trans-At - is going to go out of the lantic Open Skies a “success” be - market.” cause “carriers that have wanted to Idris Jala, Malaysia Air - gain access to Heathrow have done lines’ managing director and so and the consumer has benefited a former senior executive from greater choice.” He noted that with oil giant Shell, said he the five new airlines that have en - believes there is no shortage tered previously restricted London of oil and gas today and Heathrow airport have added 22% much of the increased prices trans-Atlantic capacity since April. in recent years has been the Chief US negotiator John Byerly, plex structures to do so.
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