Airlines Expected to Seek Help

By Kang Siew Li

TOPICS to be discussed at the upcoming 2008 World Route Development Forum (Routes KL 2008) are expected to be a departure from the usual focus on new market opportunities.

“At this year’s event, airports are anticipating that the airlines will be seeking some assistance from them in the face of record fuel prices,” Malaysia Airports Holdings Bhd (MAHB) general manager of marketing, Mohamed Sallauddin Mat Sah told Business Times in an interview.

According to Platts, a leading global provider of energy and metals information, jet fuel price stood at US$139.4 per barrel on August 22.

Routes is an annual gathering of airline and airport senior executives. This year, MAHB is hosting the event in Kuala Lumpur, which kicks off in October.

Mohamed Sallauddin cited the 2003 SARS outbreak, which caused passenger numbers to drop drastically and saw most airports throughout the world giving financial assistance to the airlines in the form of lower airport charges.

“In KLIA’s (KL International Airport) case, we gave a 50 per cent discount in landing fees to all airlines for a year,” he added, declining to reveal whether MAHB will do the same thing this time around.

In a statement issued recently, organiser The Route Development Group (RDG) said global airlines are expected to explore ways that the airports or their tourist authorities and regions can help them share the pain caused by the recent oil price increases. It believes that at least one major airport authority will be using Routes KL 2008 to announce a cost-saving initiative to support its carriers.

Mohamed Sallauddin said while the current economic conditions and high fuel price may hinder the airport operator’s drive to attract long-haul international airlines to KLIA, he believes that opportunities remain strong for regional and short-haul airlines.

“At this year’s Routes, we are targeting to attract regional carriers such as Pakistan’s budget airline Air Blue and Shaheen Air, and India’s Kingfisher Airlines.

“Kingfisher Airlines has delayed its plans to fly to Kuala Lumpur from this month till end of October, due to the high fuel price, which has forced it to re-evaluate its route operations,” he added.

MAHB will also continue to pursue British Airways to resume operations in Malaysia after pulling out from KLIA during the 1997- 98 financial crisis.

“We have been engaging in talks with British Airways since the 2005 Routes event in Copenhagen, but success on the talks will depend on the viability of operations,” said Mohamed Sallauddin.

He is also confident that Australian budget airline, Jetstar, will resume its thrice-weekly flights to Kuala Lumpur at an appropriate time. Jetstar recently announced that it will cease flying to Kuala Lumpur from September due to reallocation of its existing aircraft fleet by its parent Qantas Airways Ltd.

“It may (return) as the airline’s long-term plan is to establish a hub in Southeast Asia and Kuala Lumpur possesses the best potential hub for Jetstar,” said Mohamed Sallauddin.

Meanwhile, this year’s Routes is expected to be the biggest ever with six co-located events. They are the World Fleet Forum, the International Marketplace for the Development of Airports Forum, the Airports Catalyst For Economic Development Forum, the Fourth International Civil Aviation Organisation/ATAG World Bank Forum, the International Air Route Development Association Annual General Meeting and the Asian Tourism Conference.

Over 600 airports and 300 airlines from all over the world will converge here.

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