Another day in the books in Kuala Lumpur and a big theme was the airport-airline relationship.
A couple highlights:
The CEO of Malaysia Airlines, Tengku Dato’ Azmil Zahruddin, says they will not respond to the downturn by “nickel and diming” their customers. Hard to imagine a U.S. airline CEO saying that.
Tan Sri Bashir Ahmad, CEO of Kuala Lumpur Airport makes the point that airlines miss the mark by focusing on airport charges (which are only about 4 percent of airline costs) rather than working with airports to reduce the airlines’ cost of operations, which would be much more important. We have had the same conversation with airlines in the U.S. Airport charges are more easily quantifiable, I guess; an easier way to keep score. But airlines miss out on improving and reducing the cost of their operations by focusing on the wrong things.
Ad Rutten from Amsterdam talked about how they built a terminal to meet the stated needs of a specific low cost carrier. But passengers hated it and started booking away; it was also increasing costs in other less visible ways. The airline missed the forest for the trees.
Jim Cherry, CEO of Aéroports de Montréal, chair of ACI World and one of the smartest people I ever met talked about the airport airline relationship. He reached back to a quote from President Kennedy’s first trip to Canada in 1961 about how geography had made the countries neighbors, necessity had made them allies.
Kennedy said: “Geography has made us neighbors, History has made us friends, Economics has made us partners, And necessity has made us allies. Those who nature has so joined together, Let no man put asunder. What unites us is far greater than what divides us.”
Cherry said it was an apt description of the airport-airline relationship — though airlines are less willing to see airports as partners. As Jim put it about the relationship: “Cooperation, Not Capitulation.” That about sums it up.
The day finished with another awesome display of local culture in song and dance — and food!